Facts:

This case involves petitioners Ofelia Fauni Reyes and Noel Fauni Reyes who filed a petition for review on certiorari against the Insular Life Assurance Company, Ltd. The case arose from events that began on September 9 and 16, 1998, when Joseph Fauni Reyes, the deceased husband of Ofelia and the father of Noel, took out two life insurance policies from the respondent, Insular Life. The policies had a combined face value of P8,000,000.00, with the petitioners designated as beneficiaries. On October 19, 1998, a charred body was discovered in the trunk of a burnt BMW car, owned by Joseph, in Ternate, Cavite. Believing that the remains belonged to Joseph, the petitioners filed a claim for death benefits under the insurance policies. However, the claim was denied by Insular Life on September 30, 1999, citing misrepresentation and concealment of material facts in the life insurance applications. Subsequently, on October 6, 1999, Insular Life initiated a complaint for rescission of the

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Facts:

Background and Policy Issuance

• Joseph Fauni Reyes took out two life insurance policies from Insular Life Assurance Company, Ltd. on September 9 and September 16, 1998.
• The policies issued were Insurance Policy Nos. A001440747 and A001440758, with a total face value of ₱8,000,000.00, and the petitioners (Ofelia Fauni Reyes and Noel Fauni Reyes) were designated as the beneficiaries.
• The policies were obtained as a financial tool, with Joseph being the insured party and the petitioners being the intended recipients of the death benefits.

Alleged Death and Claim for Benefits

• On October 19, 1998, a charred body was discovered inside the trunk of Joseph’s burnt BMW car in Ternate, Cavite.
• Believing the charred body to belong to Joseph, the petitioners filed a claim for death benefits under the life insurance policies.
• Insular Life, however, denied the claim in a letter dated September 30, 1999, alleging that there was misrepresentation and concealment of material facts in the submitted life insurance applications.

Insular Life’s Allegations and the Complaint

• On October 6, 1999, Insular Life instituted a complaint for rescission of the insurance contracts and for damages before the Regional Trial Court (RTC) of Makati, Branch 57.
• In its complaint, Insular Life raised several allegations:
• That Joseph’s death was not established by a preponderance of the evidence, relying on the fact that a charred body was insufficient to confirm death.
• That Joseph was aware of a threat to his life prior to the incident, with evidence including:
• A sworn statement from Ofelia alleging that Joseph noticed a trailing car two months before the incident.
• An incident involving a suspicious man visiting Joseph’s auto supply a month prior to his alleged demise.
• That Joseph engaged in a wagering scheme by taking out numerous life insurance policies while knowing of a danger to his life and without disclosing the existence of these policies to Insular Life.
• That Joseph misrepresented his annual income, stating it was ₱800,000.00 whereas his income tax return showed only ₱38,453.00.

Proceedings Before the RTC

• On March 8, 2006, the RTC dismissed Insular Life’s complaint for rescission for lack of sufficient evidence.
• In arriving at its decision, the RTC:
• Gave probative value to the testimonies of National Bureau of Investigation (NBI) officials regarding the identity of the charred body as Joseph’s.
• Noted that Insular Life failed to present sufficient evidence that Joseph was aware of the threat to his life or that he had other life insurance policies in force on September 16, 1998.
• Relied on the admission by Mr. Jose Odena, the lay underwriter for Insular Life, that the soliciting agent had filled out the information on Joseph’s annual income in the Agent’s Confidential Report.
• The RTC subsequently ordered Insular Life to pay the petitioners:
• The total face value of the policies (₱8,000,000.00).
• Moral damages amounting to ₱100,000.00.
• Exemplary damages of ₱50,000.00.
• Attorney’s fees totaling ₱100,000.00.

Appeal and Execution Pending Appeal

• Insular Life filed a notice of appeal with the RTC on March 28, 2006.
• On March 31, 2006, the petitioners moved for the execution of the RTC decision pending appeal, invoking Ofelia’s advanced age (she was 69 years old at the time) as a ground for urgency.
• After the posting of bond, the RTC issued a writ of execution on June 8, 2006, allowing the petitioners to enforce the RTC decision while the appeal was pending.

Proceedings Before the Court of Appeals (CA)

• Insular Life sought certiorari before the CA to nullify the writ of execution pending appeal.
• The CA ruled in favor of Insular Life, annulling the writ, on the basis that:
• The old-age exception was applicable only to Ofelia and did not extend to Noel.
• Thus, the condition of “old age” could not serve as a sufficient ground for execution pending appeal for both petitioners.
• The petitioners’ subsequent motion to reconsider the CA decision, filed on September 28, 2007, was unsuccessful.

Main Case Resolution and Subsequent Proceedings

• On November 28, 2008, while the issue of execution pending appeal was in dispute, the CA issued a decision on the merits, affirming in toto the RTC judgment awarding the petitioners the relief sought.
• The CA also rejected Insular Life’s later motion for reconsideration in a resolution dated September 18, 2009.
• Insular Life then filed a petition for review on certiorari before the Supreme Court in G.R. No. 189605, challenging the CA’s November 28, 2008 decision and the subsequent resolution.
• The Supreme Court eventually denied Insular Life’s petition with finality in a resolution dated March 15, 2010, and subsequently entered judgment on May 12, 2010.
• With the entry of the final judgment in the main case, the controversy regarding the execution pending appeal became moot and academic.

Petition for Review on Execution Pending Appeal

• On October 30, 2007, the petitioners filed a separate petition before the Supreme Court (G.R. No. 180098) to challenge the CA’s annulment of the writ of execution pending appeal.
• The issue, however, was rendered academic in view of the final and executory nature of the judgment in G.R. No. 189605, leaving no live controversy regarding the entitlement to execution pending appeal.

Issue:

• Whether the petitioners are entitled to the execution of the RTC judgment pending appeal, particularly considering the allegation of their vulnerability due to age.
• Whether the condition of “old age” as presented by Ofelia constitutes a sufficient ground to allow for discretionary execution pending appeal, especially when the issue applies only to one beneficiary and not both.
• Whether the entry of a final and executory judgment in the main case (G.R. No. 189605) extinguishes the justiciable controversy over the issuance of a writ of execution pending appeal.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)