Title
Loyola Life Plans, Inc. vs. ATR Professional Life Assurance Corp.
Case
G.R. No. 228402
Decision Date
Aug 26, 2020
Loyola Life Plans insured Dwight Lumiqued under ATR’s policy. After his death, ATR denied claims, alleging unpaid premiums and forgery. Courts ruled in favor of Lumiqued’s widow, reinstating full benefits and awarding damages due to ATR’s bad faith.

Case Summary (G.R. No. 206310-11)

Petitioners

• G.R. No. 228402: Loyola Life Plans, Inc. and Angelita D. Lumiqued challenge the CA’s deletion of insurance proceeds and damages awards.
• G.R. No. 222912: ATR Professional Life Assurance Corporation contests liability on grounds of incomplete premium payment, forgery, and death exclusion.

Respondent

• ATR Professional Life Assurance Corporation (now Asian Life and General Assurance Corporation).

Key Dates

• June 8, 1999: Loyola applies for group insurance with ATR.
• June 15, 1999: Master Policy No. GCL-878 takes effect.
• April 28, 2000: Dwight pays P5,040 downpayment (two checks and cash) and executes the Timeplan application.
• May 1, 2000: Dwight dies.
• July 7, 2011: RTC decision in favor of Loyola and Angelita.
• February 4, 2016: CA decision deletes actual and moral damages but affirms contract effectivity.
• November 17, 2016: CA denies Loyola’s motion for partial reconsideration.
• August 26, 2020: Supreme Court decision.

Applicable Law

• 1987 Philippine Constitution – applied to decisions after 1990.
• Insurance Code, Sec. 2(a) – definition of insurance contract.
• Civil Code of the Philippines:
– Art. 1868 (agency),
– Art. 2208 (attorney’s fees),
– Art. 2232–2234 (moral and exemplary damages).
• Jurisprudence: Perez v. Court of Appeals (contract perfection), Nacar v. Gallery Frames (interest rates).

Antecedents

  1. Loyola, as ATR’s creditor‐policyholder, obtained group coverage with supplementary benefits (Group Creditors Life, Group Yearly Renewable Term Life, Accidental Death).
  2. Dwight purchased a Timeplan on April 28, 2000, paying P2,824.75 and P600 by check and P1,615.25 in cash. Loyola’s agent issued an official receipt valid for downpayment only.
  3. Agent deposited checks the same day; cash deposit occurred May 2, 2000.
  4. Dwight died on May 1, 2000. Angelita filed a claim which ATR denied for incomplete payment and alleged forgery; ATR then sued to annul coverage.
  5. Loyola counterclaimed to enforce payment of P1,809,360 (aggregate proceeds) plus moral, exemplary damages, attorney’s fees, and costs.

Issues Presented

  1. Was Dwight’s Timeplan application forged?
  2. Was the insurance contract perfected on April 28, 2000?
  3. Is Dwight’s cause of death covered under the policy?
  4. Is the contract entitled to Group Creditors Life and Group Yearly Renewable Term benefits?
  5. Were moral damages, exemplary damages, and attorney’s fees properly awarded?

Ruling on Forgery Allegation

ATR’s forgery claim failed for lack of clear, convincing proof. The NBI examiner’s report was inconclusive (based on carbon copy and unauthenticated standards). The agent, Gumiran, swore he witnessed Dwight sign the application. The late‐raised allegation (18 months after death) suggested bad faith. The signature was deemed genuine.

Perfection of Insurance Contract

Upon payment of the initial premium to Loyola as ATR’s agent and issuance of the pre-signed Timeplan contract, the insurance contract was perfected. Under the Insurance Code and Civil Code Art. 1868, payment to an agent binds the insurer. Ambiguities in the “date of effectivity” clause in the adhesion contract were construed against ATR, favoring coverage from the initial payment date.

Coverage of Death Risk

The exclusion for “murder or provoked assault” did not apply because no final criminal judgment found the death to be murder or provoked assault. The investigatory report indicated a familial stabbing but did not establish legal murder. The risk remained covered.

Entitlement to Insurance Benefits

Master Policy GCL-878 expressly provided:

  • Group Creditors Life Insurance – unpaid contract balance
  • Group Yearly Renewable Term Life – original contract price
  • Accidental Death Benefit – original contract price
    The certified outstanding balances and gross contract amounts totaled P1,809,360. ATR never disputed the inclusion of these benefits under the policy; the CA erred in deleting them.

Moral and Exemplary Damages

ATR’s unjust refusal and delay in honoring a valid claim exhibited bad faith, warranting moral damages of P50,000 for Angelita. Its oppressive conduct just

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