J. J.B.L. Reyes
Facts:
Andres and his wife applied for a policy for Php 5,000. Premiums were paid semi-annually, and the amount of P165.15 was paid for two semesters. The third wasn’t. The company to Andres advising them that the policy lapsed and reinstatement was in 60 days. The policy was allowed to lapse.
Andres and his wife applied for reinstatement. He mailed 100. There was a balance of 65 pesos.
The company assented on the condition that he pay the 65 pesos. He paid.
The wife passed away. The insurance company, however, didn’t pay indemnity. They enclosed a Death Claim Discharge but the plaintiff refused to sign. The company returned Php 165. Andres returned it as well.
Andres filed a complaint in the CFI against Crown Life Insurance Company for the recovery of the amount of P5,000, as the face value of a joint 20-year endowment insurance policy. Andres presented his death claim as survivor-beneficiary. Payment having been denied, this case was instituted.
The court rendered decision absolving the defendant from any liability on the ground that the policy having lapsed, it was not reinstated at the time the plaintiff’s wife died. Not satisfied with the decision, plaintiff appealed to the Court of Appeals, but the appeal was later certified to this Court.
Held: No. Petition dismissed.
Ratio:
The subsequent reinstatement of the policy was provided for in the contract itself in the following terms:
If this policy lapses, it may be reinstated upon application made within three years from the date of lapse, and upon production of evidence of the good health of the injured, and such other evidence of insurability at the date of application for reinstatement as would then satisfy the Company to issue a new Policy on the same terms as this Policy, and upon payment of all overdue premiums and other indebtedness in respect of this Policy, together with interest at six per cent, compounded annually, and provided also that no change has taken place in such good health and insurability subsequent to the date of such application and before this Policy is reinstated.
As stated by the lower court, the conditions set forth in the policy for reinstatement are the following: (a) application shall be made within three years from the date of lapse; (b) there should be a production of evidence of the good health of the insured: (c) if the rate of premium depends upon the age of the Beneficiary, there should likewise be a production of evidence of his or her good health; (d) there should be presented such other evidence of insurability at the date of application for reinstatement; (e) there should be no change which has taken place in such good health and insurability subsequent to the date of such application and before the policy is reinstated; and (f) all overdue premiums and other indebtedness in respect of the policy, together with interest at six per cent, compounded annually, should first be paid.
The plaintiff-appellant did not comply with the last condition; for he only paid P100 before his wife’s death; and, despite the Company’s reminders, he only remitted the balance 2 days after his wife died. The company had the right to treat the contract as lapsed and refuse payment of the policy.
Appellant, however, contends that the condition regarding payment of the premium was waived by the insurance Company by its letters to appellant:
If you can not pay the full amount immediately, send as large an amount as possible and advise us how soon you expect to be able to pay the balance. Every consideration will be given to your request consistent with the company’s regulations
If you are unable to cover this amount in full, send us as big an amount as you are able and we will work out an adjustment most beneficial to you.
Nothing in these expressions that would indicate an intention on the insurer’s part to waive the full payment of the overdue premium. A waiver must be clear and positive, and intent to waive shown clearly and convincingly. The statements to the insured were so vague and indefinite as to require further negotiations between the parties, for their criteria might differ as to what would be the most beneficial arrangement.
Upon the other hand, the subsequent letters of the insurance Company indicated that the Company insisted on the full payment of the premium before the policy was reinstated.
“We may now reinstate your policy if you will kindly remit to us the balance of P65.15 due on your semi-annual premium for November, 1950. Please send us this amount by return mail and upon its receipt we will in turn send the Certificate of Reinstatement of your policy, thus rendering it once again in full force and effect.”
The company did not consider the partial payment as sufficient consideration for the reinstatement. Appellant’s failure to remit the balance before the death of his wife operated to deprive him of any right to waive the policy and recover the face value.
James McGuire vs. The Manufacturer’s Life Insurance Co- The stipulation in a life insurance policy giving the insured the privilege to reinstate it upon written application does not give the insured absolute right to such reinstatement by the mere filing of an application. The Company has the right to deny the reinstatement if it is not satisfied as to the insurability of the insured and if the latter does no pay all overdue premium and all other indebtedness to the Company. After the death of the insured the insurance Company cannot be compelled to entertain an application for reinstatement of the policy because the conditions precedent to reinstatement can no longer be determined and satisfied.
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