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30 Lalican vs. Insular Life Assurance

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  Lalican vs. Insular Life Assurance Company, 597 SCRA 159, August   25, 2009   Case Title : VIOLETA R. LALICAN, petitioner, vs. THE INSULAR LIFE ASSURANCE COMPANY LIMITED, AS REPRESENTED BY THE PRESIDENT VICENTE R. AVILON, respondent. Case Nature : PETITION for review on certiorari of the decision and orders of the Regional Trial Court of Gapan City, Br. 34. Syllabi Class  :Insurance Law|Statutory Construction SO ORDERED. Chico-Nazario (Acting Chairperson), ** Corona, ***  Carpio-Morales ****  and  Peralta, JJ. , concur. Judgment affirmed with modification.   Note .  —   Youth and immaturity are generally badges of truth and sincerity. (  People vs. Batiancila , 513 SCRA 434 [2007])  ——  o0o  ——   G.R. No. 183526. August 25, 2009. *    VIOLETA R. LALICAN, petitioner, vs.  THE INSULAR LIFE ASSURANCE COMPANY LIMITED, AS REPRESENTED BY THE PRESIDENT VICENTE R. AVILON, respondent.   Judgment; Final and Executory; A judgment becomes “final and executory” by operation of law; Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period.  —A judgment becomes “final and executory” by operation of law. Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period. As a consequence, no court (not even this Court) can exercise appellate jurisdiction to review a case or modify a decision that has become final. When a final judgment is executory, it becomes immutable and unalterable. It may no longer be modified in any respect either by the court, which rendered it or even by this Court. The doctrine is founded on considerations of public policy and sound  _______________ **  As per Special Order No. 678 dated August 3, 2009. ***  Additional member as per August 17, 2009 raffle. ****  Additional member as per Special Order No. 679 dated August 3, 2009. * THIRD DIVISION.  160   160 SUPREME COURT REPORTS ANNOTATED  Lalican vs. Insular Life Assurance Company   practice that, at the risk of occasional errors, judgments must become final at some definite point in time. Same; Nunc Pro Tunc Entries; The only recognized exceptions to the doctrine of immutability and unalterability are the correction of clerical errors, the so called nunc pro tunc entries, which cause no prejudice to any party, and void judgments.  —  The only recognized exceptions to the doctrine of immutability and unalterability are the correction of clerical errors, the so-called nunc pro tunc  entries, which cause no prejudice to any party, and void  judgments. The instant case does not fall under any of these exceptions. Mercantile Law; Insurance Law; Insurable Interest; An insurable interest is that interest which a person is deemed to have in the subject matter insured, where he has a relation or connection with or concern in it, such that the person will derive pecuniary benefit or advantage from the preservation of the subject matter insured and will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the event insured against.  —   An insurable interest is one of the most basic and essential requirements in an insurance contract. In general, an insurable interest is that interest which a person is deemed to have in the subject matter insured, where he has a relation or connection with or concern in it, such that the person will derive pecuniary benefit or advantage from the preservation of the subject matter insured and will suffer pecuniary loss or damage from its destruction, termination, or injury by the happening of the event insured against. The existence of an insurable interest gives a person the legal right to insure the subject matter of the policy of insurance. Section 10 of the Insurance Code indeed provides that every person has an insurable interest in his own life. Section 19 of the same code also states that an interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs. Insurance Law; Statutory Construction; Cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of the insured and strictly as against the insurer company, yet, contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms, which the parties themselves have used.  —   Violeta did not adduce any evidence that Eulogio might have failed to fully understand the import and meaning of the provisions of his Policy Contract and/or  Application 161   VOL. 597, AUGUST 25, 2009 161  Lalican vs. Insular Life Assurance Company   for Reinstatement, both of which he voluntarily signed. While it is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of  the insured and strictly as against the insurer company, yet, contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms, which the parties themselves have used. If such terms are clear and unambiguous, they must be taken and understood in their plain, ordinary and popular sense. PETITION for review on certiorari of the decision and orders of the Regional Trial Court of Gapan City, Br. 34. The facts are stated in the opinion of the Court. Feliciano V. Buenaventura for petitioner. Law Firm Tanjuatco & Partners  for respondent. CHICO-NAZARIO, **   J. : Challenged in this Petition for Review on Certiorari 1  under Rule 45 of the Rules of Court are the Decision 2  dated 30 August 2007 and the Orders dated 10 April 2008 3  and 3 July 2008 4 of the Regional Trial Court (RTC) of Gapan City, Branch 34, in Civil Case No. 2177. In its assailed Decision, the RTC dismissed the claim for death benefits filed by petitioner Violeta R. Lalican (Violeta) against respondent Insular Life Assurance Company Limited (Insular Life); while in its questioned Orders dated 10 April 2008 and 3 July 2008, re-  _______________ ** Per Special Order No. 681 dated 3 August 2009, signed by Chief Justice Reynato S. Puno, designating  Associate Justice Minita V. Chico-Nazario as Acting Chairperson to replace Associate Justice Consuelo  Ynares-Santiago, who is on official leave. 1  Rollo , pp. 22-35. 2 Penned by Judge Celso O. Baguio; Rollo , pp. 7-15. 3  Rollo , pp. 16-17. 4  Id ., at pp. 18-19. The date of promulgation of the assailed second Order was erroneously stated in the Petition as 9 July 2008. 162   162 SUPREME COURT REPORTS ANNOTATED  Lalican vs. Insular Life Assurance Company   spectively, the RTC declared the finality of the aforesaid Decision and denied petitioner’s Notice of Appeal.  The factual and procedural antecedents of the case, as culled from the records, are as follows:  Violeta is the widow of the deceased Eulogio C. Lalican (Eulogio). During his lifetime, Eulogio applied for an insurance policy with Insular Life. On 24 April 1997, Insular Life, through Josephine Malaluan (Malaluan), its agent in Gapan City, issued in favor of Eulogio Policy No. 9011992, 5  which contained a 20- Year Endowment Variable Income Package Flexi Plan worth P500,000.00, 6  with two  riders valued at P500,000.00 each. 7 Thus, the value of the policy amounted to P1,500,000.00. Violeta was named as the primary beneficiary. Under the terms of Policy No. 9011992, Eulogio was to pay the premiums on a quarterly basis in the amount of P8,062.00, payable every 24 April, 24 July, 24 October and 24 January of each year, until the end of the 20-year period of the policy.  According to the Policy Contract, there was a grace period of 31 days for the payment of each premium subsequent to the first. If any premium was not paid on or before the due date, the policy would be in default, and if the pre-  _______________ 5 Records, Folder 1, p. 57. 6  An endowment policy  is one under the terms of which the insurer binds himself to pay a fixed sum to the insured if the latter survives for a specified period (maturity date stated in the policy), or, if he dies within such period, to some other person indicated. (De Leon, T HE I NSURANCE C ODE OF THE P HILIPPINES  A  NNOTATED  [2002 ed.], p. 438). Under Section 180 of the Insurance Code, endowment contracts shall be considered life insurance contracts for purposes of said code. 7  A rider  is a printed or typed stipulation contained on a slip of paper attached to the policy and forming an integral part thereof. (De Leon, T HE I NSURANCE C ODE OF THE P HILIPPINES  A  NNOTATED  [2002 ed.], p. 186). 163   VOL. 597, AUGUST 25, 2009 163  Lalican vs. Insular Life Assurance Company   mium remained unpaid until the end of the grace period, the policy would automatically lapse and become void. 8  Eulogio paid the premiums due on 24 July 1997 and 24 October 1997. However, he failed to pay the premium due on 24 January 1998, even after the lapse of the grace period of 31 days. Policy No. 9011992, therefore, lapsed and became void. Eulogio submitted to the Cabanatuan District Office of Insular Life, through Malaluan, on 26 May 1998, an Application for Reinstatement 9  of Policy No. 9011992, together with the amount of P8,062.00 to pay for the premium due on 24 January 1998. In a letter 10  dated 17 July 1998, Insular Life notified Eulogio that his  Application for Reinstatement could not be fully processed because, although he already deposited P8,062.00 as payment for the 24 January 1998 premium, he left unpaid the overdue interest thereon amounting to P322.48. Thus, Insular Life instructed Eulogio to pay the amount of interest and to file another application for reinstatement. Eulogio was likewise advised by Malaluan to pay the premiums that subsequently became due on 24 April 1998 and 24 July 1998, plus interest. On 17 Sep tember 1998, Eulogio went to Malaluan’s house and submitted a second  Application for Reinstatement 11  of Policy No. 9011992, including the amount of P17,500.00, representing payments for the overdue interest on the premium for 24 January 1998, and the premiums which became due on 24 April 1998 and 24 July 1998. As Malaluan was away on a business errand, her husband received Eulogio’s
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