G.R. No. L-13023 - Insular Life Assurance Co., Ltd. vs. Vda. De Ferdez

The defendant, The Insular Life Assurance Company, Ltd., issued life insurance policy No. 98321 on June 1, 1944, for the sum of P5,000.00.

The policy was issued in favor of Juan D. Fernandez, with the beneficiaries designated as Teresa Duat Vda. de Fernandez and Maria Teresa Fernandez (mother and sister of the insured).

The insured, Juan D. Fernandez, paid a premium of P265.00, covering the period from June 1, 1944 to June 1, 1945.

On November 2, 1944, Juan D. Fernandez died while incarcerated at the Penitenciaria de Muntinglupa during the Japanese occupation.

Despite the fact that his death occurred amidst war conditions, the policy was still in force and had reached its maturity upon his death.

The insured’s death thereby triggered the maturity clause of the life insurance policy, making the proceeds immediately due, independent of subsequent procedural filings.

In August 1952, the beneficiaries, through their lawyer, initially demanded payment of the policy amount from the insurer.

In response, the insurer indicated willingness to settle the claim based on the Ballantyne scale adjustment and offered P200.00 instead of the full face value.

On July 19, 1954, the beneficiaries' lawyer renewed their claim, insisting on the full amount of P5,000.00, and submitted supporting documents such as the death certificate and an autopsy report.

On July 21, 1954, the insurer reaffirmed its position to pay only the equivalent value adjusted according to the Ballantyne schedule.

Prior to April 1944, the insured resided in Manila; however, his mother and sisters later moved to Hagan, Isabela, which contributed to the delay in discovery and filing.

The insured had recently engaged in a business partnership with Pablo Gabriel, using a part of the Insular Life Building as an office.

During the Japanese occupation, both the insured and his partner encountered disruptions—including their arrests and Pablo Gabriel’s subsequent illness—which led to a delay in the beneficiaries becoming aware of the policy’s existence.

The physical documents, including the original policy, were retrieved from the office by Pablo Gabriel after his release, only later coming to the attention of the beneficiaries.

The insurer admitted that the insured, Juan D. Fernandez, died on November 2, 1944, and that the policy was in force at the time of death.

It was also admitted that the operations of the insurer’s office continued during the Japanese occupation until January 9, 1945, when the battle for liberation began.

These undisputed facts set the stage for the ensuing litigation regarding the adjustment of the policy’s amount due to conditions prevailing during the wartime period.

Whether the maturity of the life insurance policy is determined by the occurrence of the insured’s death or by the subsequent filing of the proof of death.
Whether the delay in filing proof of death has any bearing on the insurer’s obligation to pay the full face value of the policy.
Whether the payment of the policy proceeds should be adjusted according to the Ballantyne schedule due to the effects of currency devaluation during the Japanese occupation.
Whether the insurer’s offer to settle based on an adjusted (or lesser) amount under the Ballantyne scale is legally tenable in light of the full policy amount of P5,000.00.