Like us on Facebook

Please wait..10 Seconds Cancel

Insurance Case Digest: Gercio v. Sun Life Assurance Co. of Canada (1925)

G.R. No. 23703           September 28, 1925
Lessons Applicable: 
  • Blood relationship (Insurance)
  • Revocable Designation (Insurance)
  • January 29, 1910: Sun Life Assurance Co. of Canada issued a 20-year endowment insurance policy on the life of Hilario Gercio
    • insurance company agreed to insure the life of Gercio for the sum of P2,000, to be paid him on February 1, 1930, or if the insured should die before said date, then to his wife, Mrs. Andrea Zialcita, should she survive him; otherwise to the executors, administrators, or assigns of the insured
    • policy did not include any provision reserving to the insured the right to change the beneficiary
  • End of 1919: she was convicted of the crime of adultery
  • September 4, 1920: a decree of divorce was issued 
  • March 4, 1922: Gercio formally notified the Sun Life that he had revoked his donation in favor of Andrea Zialcita, and that he had designated in her stead his present wife, Adela Garcia de Gercio, as the beneficiary of the policy
    • Sun Life refused
      • Gercio filed a petition for mandamus to compel Sun Life 
  • Trial Court: favored Gercio
ISSUE: W/N Gercio has the right to change the beneficiary of the policy

HELD: NO. Dismissed.
  • The wife has an insurable interest in the life of her husband. 
  • The beneficiary has an absolute vested interest in the policy from the date of its issuance and delivery. So when a policy of life insurance is taken out by the husband in which the wife is named as beneficiary, she has a subsisting interest in the policy
    • applies to a policy to which there are attached the incidents of a loan value, cash surrender value, an automatic extension by premiums paid, and to an endowment policy, as well as to an ordinary life insurance policy. 
  • If the husband wishes to retain to himself the control and ownership of the policy he may so provide in the policy. 
    • But if the policy contains no provision authorizing a change of beneficiary without the beneficiary's consent, the insured cannot make such change. 
  • Accordingly, it is held that a life insurance policy of a husband made payable to the wife as beneficiary, is the separate property of the beneficiary and beyond the control of the husband.
  • effect produced by the divorce, the Philippine Divorce Law, Act No. 2710, merely provides in section 9 that the decree of divorce shall dissolve the community property as soon as such decree becomes final
    • absence of a statute to the contrary, that if a policy is taken out upon a husband's life the wife is named as beneficiary therein, a subsequent divorce does not destroy her rights under the policy
  • Neither the husband, nor the wife, nor both together had power to destroy the vested interest of the children in the policy.
Separate Opinion:
  • Johnson, Concurring Opinion: 
    • I agree with the majority of the court, that the judgment of the lower court should be revoked, but for a different reason. In my judgment, the action is premature and should have been dismissed.