Case Digest (G.R. No. 207526)
Facts:
In The Insular Assurance Co., Ltd. v. The Heirs of Jose H. Alvarez and Union Bank of the Philippines v. The Heirs of Jose H. Alvarez (G.R. Nos. 207526 & 210156, October 3, 2018), the late Jose H. Alvarez and his wife Adelina owned a residential lot (TCT No. C-315023) in Caloocan City. On June 18, 1997, Alvarez obtained a ₱648,000 housing loan from Union Bank of the Philippines, secured by a promissory note, a real estate mortgage, and a Group Mortgage Redemption Insurance with Insular Life as insurer and UnionBank as beneficiary. Alvarez died on April 17, 1998, prompting UnionBank to file a death claim in May 1998. Insular Life denied the claim, asserting that Alvarez was over the age limit at the time of loan approval. UnionBank then foreclosed extrajudicially on October 4, 1999, purchased the lot at auction, and obtained title. On February 14, 2001, Alvarez’s heirs filed, first, for nullity of contract and damages, and later amended to a complaint for specific performance agaiCase Digest (G.R. No. 207526)
Facts:
- Parties and Subject Matter
- Petitioners The Insular Life Assurance Co., Ltd. (Insular Life) and Union Bank of the Philippines (UnionBank) – insurer and mortgagee, respectively – sought review of a Court of Appeals (CA) decision affirming the Regional Trial Court (RTC) ruling in favor of respondents, the Heirs of Jose H. Alvarez.
- Respondents are heirs of Jose H. Alvarez, mortgagor under a P648,000 housing loan from UnionBank secured by:
- A promissory note and real estate mortgage over TCT No. C-315023 (lot in Caloocan City).
- A Group Mortgage Redemption Insurance policy issued by Insular Life with UnionBank as beneficiary.
- Claim Denial and Foreclosure
- Alvarez died on April 17, 1998. UnionBank filed a death claim with Insular Life under the mortgage redemption policy, submitting birth, marriage, and death certificates, physician’s and claimant’s statements, and account records.
- Insular Life denied the claim, alleging Alvarez misrepresented his age (claimed 55 but was over 60 at loan approval), rendering him ineligible. Unpaid loan amortizations prompted UnionBank to foreclose the mortgage extrajudicially on October 4, 1999, purchasing the property itself.
- Trial and Appeals
- On February 14, 2001, the Heirs of Alvarez filed for nullity of contract and damages against UnionBank and later amended to include Insular Life, converting relief to specific performance and policy compliance.
- RTC (January 29, 2007) ruled for the heirs, finding no fraudulent intent by Alvarez, ordering:
- Insular Life to pay insurance proceeds as loan payment.
- Nullification of the foreclosure and release of the mortgage encumbrance.
- UnionBank to reconvey title to Alvarez’s estate.
- Joint payment of P50,000 attorney’s fees and suit costs.
- CA (May 21, 2013 Decision; November 6, 2013 Resolution) denied Insular Life’s and UnionBank’s appeals and motions for reconsideration.
- SC consolidated Insular Life’s Petition (G.R. No. 207526) and UnionBank’s Petition (G.R. No. 210156) for review under Rule 45.
Issues:
- Whether Insular Life is obliged to pay the Group Mortgage Redemption Insurance proceeds given the alleged misrepresentation of Alvarez’s age at loan approval.
- Whether UnionBank was correct in proceeding with the extrajudicial foreclosure following Insular Life’s denial of the claim.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)