PEREZ v.

COURT OF APPEALS
GR No. 112329 January 28, 2000
By Kylie Dado
FACTS:
Primitivo Perez had been insured with the BF Lifeman
Insurance Corp since 1980 for P20K.
Sometime in Oct. 1987, Rodolfo Lalog, an agent of BF
Lifeman, visited Primitivo and convinced him to apply
for additional insurance coverage of P50K, to avail of
the ongoing promotional discount of P400 if the
premium were paid annually.
Primitivo accomplished an application form for the
additional coverage, and on that same day, Virginia,
her wife, paid P2,075 to Lalog.
Unfortunately, Lalog lost the application form so he
asked Primitivo to fill up another application form.
Lalog forwarded the application Primitivo together with
all its supporting documents to the BF Lifemans office
in Gumaca, which office was supposed to forward the
papers to the Manila office.
Nov. 25, 1987, Primitivo died in an accident (riding in a
banca which capsized during a storm)
At the time of his death, his application papers
were still with the Gumaca office.
Lalog testified that when he made a follow up,
he found them still in Gumaca so he personally
brought it to the Manila office.
It was only on Nov. 27, 1987 that said papers
were received in Manila.

Without knowing Primitivos death, BF Lifeman

approved the application and issued the corresponding
policy for P50K on Dec. 2, 1987.
Virginia went to Manila to claim the benefits. But she
was paid only P40K under the first insurance policy of
the deceased.
BF Lifeman refused to pay the claim under the
additional insurance policy coverage
BF Lifeman refunded P2,075 which Virginia had
paid.
BF Lifeman filed a complaint against Virginia seeking
the rescission and declaration of nullity of the
insurance contract in question.
Virginia averred that the deceased had fulfilled
all his prestations under the contract and all the
elements of a valid contract are present. She
filed a counterclaim.
RTC: Ruled in favor of Virginia.
Premium for the additional insurance had been
fully paid and even if the P2,075 were to be
considered merely as partial payment, the same
does not affect the validity of the policy.
Deceased had fully complied with the
requirements of BF Lifeman. He should not be
made to suffer the subsequent delay in the
transmittal of his application since these were
no longer within his control.
CA: Reversed RTCs resolution.
Insurance contract for P50K could not have been
perfected since at the time that the policy was
issued, Primitivo was already dead.

Contract of insurance had to be assented to by

both parties and so long as the application for
insurance has not been either accepted or
rejected, it is merely an offer or proposal to
make a contract.
SC: Ruled in favor of BF Lifeman.
I.
Insurance is a contract, whereby, for a stipulated
consideration, one party undertakes to compensate
the other for loss on a specified subject by specified
perils.
Consent must be manifested by the meeting of the
offer and the acceptance upon the thing and the
cause, which are to constitute the contract. The offer
must be certain and the acceptance absolute.
When Primitivo filed an application, paid P2,075 and
submitted the results of his medical examination, his
application was subject to the acceptance of BF
Lifeman. The perfection of the contract of insurance
was further conditioned upon compliance with the ff.
requisites stated in the application form:
no contract unless and until a policy is issued
and that the said policy shall not take effect until the
premium has been paid and the policy delivered to
and accepted by me/us in person while I/we, am/are in
good health.
The assent of BF Lifeman was not given. When
Primitivo died, his application was still with the
Gumaca branch. Consequently, there was absolutely
no way the acceptance of the application could have

been communicated to the applicant for the latter to

accept inasmuch as the application at the time was
already dead.
II.
The Court disagreed with Petitioners assertion, that
the condition imposed by BF Lifeman that a policy
must have been delivered to and accepted by the
insured in good health is potestative (dependent upon
the will of BF Lifeman) and is therefore null and void.
The conditions imposed by BF Lifeman that the policy
must have been delivered to and accepted by the
application while he is in good health can hardly be
considered as postestative. On the contrary, the health
of the applicant at the time of the deliver is beyond
the control or will of the insurance company. Rather, it
is a suspensive one, whereby the acquisition of rights
depends upon the happening of an event which
constitutes the condition.
There was no fulfillment of the condition as the
applicant was already dead at the time of the policy
was issued, hence there is no perfected contract.
Delay does not constitute acceptance despite of the
payment of the first premium. The corporation may
not be penalized for the delay in the processing of the
application of papers. The processing of the papers
normally takes 2 weeks up to 1 month. Thus the Court
held that the delay could not be deemed unreasonable
so as to constitute gross negligence.