PARTIES IN INSURANCE CONTRACT – INSURER
AND INSURED
Great Pacific Life Assurance Corp. vs. Court of Appeals,
316 SCRA 677
FACTS:
A contract of group life insurance was executed
between petitioner Great Pacific Life Assurance Corporation
(hereinafter Grepalife) and Development Bank of the
Philippines (hereinafter DBP). Grepalife agreed to insure the
lives of eligible housing loan mortgagors of DBP. On
November 11, 1983, Dr. Wilfredo Leuterio, a physician and
a housing debtor of DBP applied for membership in the
group life insurance plan. In his application form, Dr.
Leuterio answered that he had never consulted a physician
for a heart condition, high blood pressure, cancer, diabetes,
lung, kidney or stomach disorder or any other physical
impairment, and that he was in good health.
On November 15, 1983, Grepalife approved the insurance
coverage of Dr. Leuterio, to the extent of his DBP mortgage
indebtedness amounting to (P86,200.00) pesos.
On August 6, 1984, Dr. Leuterio died due to
massive cerebral hemorrhage. Consequently, DBP
submitted a death claim to Grepalife. Grepalife denied the
claim alleging that Dr. Leuterio was not physically healthy
when he applied for an insurance coverage on November 15,
1983. Grepalife insisted that Dr. Leuterio did not disclose he
had been suffering from hypertension, which caused his
death. Allegedly, such non-disclosure constituted
concealment that justified the denial of the claim.
On October 20, 1986, the widow of the late Dr.
Leuterio , filed a complaint with the Regional Trial Court,
against Grepalife for Specific Performance with Damages.
During the trial, Dr. Hernando Mejia, who issued the death
certificate, was called to testify. Dr. Mejias findings, based
partly from the information given by the respondent widow,
stated that Dr. Leuterio complained of headaches
presumably due to high blood pressure. The inference was
not conclusive because Dr. Leuterio was not autopsied,
hence, other causes were not ruled out.
On February 22, 1988, the trial court rendered a
decision in favor of respondent widow which was sustained
by the Court appeals on May 17 1993. Hence, the present
petition. Petitioners argue that “the lower court erred in
holding defendant-appellant liable to DBP, which is not a
party to the case, for payment of the proceeds of a mortgage
redemption insurance on the life of Wilfredo Leuterio,
borrowers, instead of dismissing the case against
GREPALIFE for lack of cause of action.”
ISSUE:
Whether the Court of Appeals erred in holding
petitioner liable to DBP as beneficiary in a group life
insurance contract from a complaint filed by the widow of
the decedent/mortgagor?
RULING:
Petitioner alleges that the complaint was instituted
by the widow of Dr. Leuterio, not the real party in interest,
hence the trial court acquired no jurisdiction over the case. It
argues that when the Court of Appeals affirmed the trial
courts judgment, Grepalife was held liable to pay the
proceeds of insurance contract in favor of DBP, the
indispensable party who was not joined in the suit. To
resolve the issue, we must consider the insurable interest in
mortgaged properties and the parties to this type of contract.
The rationale of a group insurance policy of mortgagors,
otherwise known as the mortgage redemption insurance, is a
device for the protection of both the mortgagee and the
mortgagor. On the part of the mortgagee, it has to enter into
such form of contract so that in the event of the unexpected
demise of the mortgagor during the subsistence of the
mortgage contract, the proceeds from such insurance will be
applied to the payment of the mortgage debt, thereby
relieving the heirs of the mortgagor from paying the
obligation. In a similar vein, ample protection is given to the
mortgagor under such a concept so that in the event of death;
the mortgage obligation will be extinguished by the
application of the insurance proceeds to the mortgage
indebtedness.
Consequently, where the mortgagor pays the
insurance premium under the group insurance policy,
making the loss payable to the mortgagee, the insurance is
on the mortgagor’s interest, and the mortgagor continues to
be a party to the contract. In this type of policy insurance,
the mortgagee is simply an appointee of the insurance fund,
such loss-payable clause does not make the mortgagee a
party to the contract. Section 8 of the Insurance Code
provides: “Unless the policy provides, where a mortgagor
of property effects insurance in his own name providing that
the loss shall be payable to the mortgagee, or assigns a policy
of insurance to a mortgagee, the insurance is deemed to be
upon the interest of the mortgagor, who does not cease to be
a party to the original contract, and any act of his, prior to
the loss, which would otherwise avoid the insurance, will
have the same effect, although the property is in the hands of
the mortgagee, but any act which, under the contract of
insurance, is to be performed by the mortgagor, may be
performed by the mortgagee therein named, with the same
effect as if it had been performed by the mortgagor.”’
The insured private respondent did not cede to the
mortgagee all his rights or interests in the insurance, the
policy stating that: In the event of the debtor’s death before
his indebtedness with the Creditor [DBP] shall have been
fully paid, an amount to pay the outstanding indebtedness
shall first be paid to the creditor and the balance of sum
assured, if there is any, shall then be paid to the
beneficiary/ies designated by the debtor.
INTERPRETATION OF INSURANCE CONTRACTS
Rizal Surety & Insurance Company vs. CA, 336 SCRA 12
FACTS:
Rizal Surety & Insurance Company issued a fire
insurance policy in favor of Transworld Knitting Mills, Inc.
The subject policy stated that Rizal Surety is “responsible in
case of loss whilst contained and/or stored during the
currency of this Policy in the premises occupied by them
forming part of the buildings situated within own Compound
xxx.” The policy also described therein the four-span
building covered by the same. On Jan. 12, 1981, fire broke
out in the compound, razing the middle portion of its four-
span building and partly gutting the left and right sections
thereof. A two-storey building (behind said four-span
building) was also destroyed by the fire.
ISSUE:
Whether or not Rizal Surety is liable for loss of the
two-storey building considering that the fire insurance
policy sued upon covered only the contents of the four-span
building
RULING:
Yes. Both the trial court and the CA found that the
so-called “annex” as not an annex building but an integral
and inseparable part of the four-span building described in
the policy and consequently, the machines and spare parts
stored therein were covered by the fire insurance in dispute.
So also, considering that the two-storey building
aforementioned was already existing when subject fire
insurance policy contract was entered into on Jan. 12, 1981,
having been constructed sometime in 1978, petitioner should
have specifically excluded the said two-storey building from
the coverage of the fire insurance if minded to exclude the
same but if did not, and instead, went on to provide that such
fire insurance policy covers the products, raw materials and
supplies stored within the premises of Transworld which was
an integral part of the four-span building occupied by
Transworld, knowing fully well the existence of such
building adjoining and intercommunicating with the right
section of the four-span building. Also, in case of doubt in
the stipulation as to the coverage of the fire insurance policy,
under Art. 1377 of the New Civil Code, the doubt should be
resolved against the Rizal Surety, whose layer or managers
drafted the fire insurance policy contract under scrutiny.
In Landicho vs. Government Service Insurance
System, the Court ruled that “the terms in an insurance
policy, which are ambiguous, equivocal or uncertain x x x
are to be construed strictly and most strongly against the
insurer, and liberally in favor of the insured so as to effect
the dominant purpose of indemnity or payment to the
insured, especially where forfeiture is involved, and the
reason for this is that the insured usually has no voice in the
selection or arrangement of the words employed and that the
language of the contract is selected with great care and
deliberation by experts and legal advisers employed by, and
acting exclusively in the interest of, the insurance company.”
Pan Malayan Insurance Corporation vs. CA, GR No.
81026
FACTS:
Canlubang Automotive Resources Corporation
[CANLUBANG] insured a Mitsubishi Colt Lancer car with
plate No. DDZ-431 to petitioner Pan Malayan Insurance
Company (PANMALAY). On May 26, 1985, due to the
"carelessness, recklessness, and imprudence" of the
unknown driver of a pick-up with plate no. PCR-220, the
insured car was hit and suffered damages in the amount of
P42,052.00; that PANMALAY defrayed the cost of repair of
the insured car and, therefore, was subrogated to the rights
of CANLUBANG against the driver of the pick-up and his
employer, Erlinda Fabie; and that, despite repeated demands,
defendants, failed and refused to pay the claim of
PANMALAY. The contention of the petitioner was that the
damage caused to the insured car was settled under the "own
damage" coverage of the insurance policy, and that the
driver of the insured car was, at the time of the accident, an
authorized driver duly licensed to drive the vehicle. On the
other hand, private respondent argued that under the "own
damage" clause of the insurance policy, petitioner was
precluded to subrogate under Article 2207 of the Civil Code,
since indemnification thereunder was made on the
assumption that there was no wrongdoer or no third party at
fault.
The RTC dismissed the complaint for no cause of action and
affirmed by CA.
ISSUE:
Whether or not the interpretation of own damage
is covered with the insurance policy and thus subrogation is
allowed as provided in Art. 2207 of the Civil Code.
RULING:
YES. It is a basic rule in the interpretation of
contracts that the terms of a contract are to be construed
according to the sense and meaning of the terms which the
parties thereto have used. PANMALAY contends that the
coverage of insured risks under the above section,
specifically Section III-1(a), is comprehensive enough to
include damage to the insured vehicle arising from collision
or overturning due to the fault or negligence of a third party.
CANLUBANG is apparently of the same understanding.
Considering that the very parties to the policy were not
shown to be in disagreement regarding the meaning and
coverage of Section III-1, thus such interpretation which is
beneficial to the insured must be given weight. The Court,
furthermore, finds it noteworthy that the meaning advanced
by PANMALAY regarding the coverage of Section III- 1(a)
of the policy is undeniably more beneficial to
CANLUBANG than that insisted upon by respondents
herein. By arguing that this section covers losses or damages
due not only to malicious, but also to negligent acts of third
parties, PANMALAY in effect advocates for a more
comprehensive coverage of insured risks.

In effect, PANMALAY is subrogated in behalf of
Canlubang as Article 2207 of the Civil Code, provides: If
the plaintiff's property has been insured, and he has received
indemnity from the insurance company for the injury or loss
arising out of the wrong or breach of contract complained of,
the insurance company shall be subrogated to the rights of
the insured against the wrongdoer or the person who has
violated the contract. The right of subrogation is not
dependent upon, nor does it grow out of, any privity of
contract or upon written assignment of claim. It accrues
simply upon payment of the insurance claim by the insurer
as such payment by the insurer to the assured operates as an
equitable assignment to the former of all remedies which the
latter may have against the third party whose negligence or
wrongful act caused the loss.
CHARACTERISTICS OF INSURANCE CONTRACT
Malayan Insurance v. Arnaldo & Pinca, GR No. L-67835
Topic: Aleatory as a characteristic of an Insurance Contract
FACTS:
Petitioner (MICO) issued to respondent Pinca, on
June 7, 1981, a Fire Insurance Policy on her property for the
amount of 100,000, effective for one year starting July 22,
1981. MICO allegedly cancelled the policy for non-payment
of the premium and sent notice to Pinca. On Dec. 24, 1981,
the payment for such premium for Pinca was received by
Adora, agent of MICO. Adora remitted this to MICO; this
was returned by MICO to Adora on the ground that the
policy had been cancelled earlier. It is to be noted that
Pinca’s property was completely burned on Jan. 18, 1982.
MICO argued that there was no payment of premium and
that the Policy had been cancelled before the occurrence of
the loss, relying on Sec. 77 of the Insurance Code: “x x
Notwithstanding any agreement to the contrary, no policy or
contract of insurance is valid and binding unless and until
the premium thereof has been paid x x”
ISSUE:
WON the Policy had indeed been cancelled for the
non-payment of the premium
RULING:
The contention of MICO must fail.
The provision cited is not applicable because the
payment of premium was in fact eventually made in this
case. The premium invoice issued to Pinca at the time of the
delivery of the Policy was stamped “Payment Received.”
This is important because it suggests and understanding
between MICO and the insured that such payment could be
made later. In any event, it is not denied that his payment
was actually made by Pinca to Adora, who remitted the same
to Mico. Furthermore, MICO’s acknowledgement of Adora
as its agent defeats its contention that he wa not authorized
to receive the premium payment on its behalf. It is not
disputed that premium was paid by Pinca to Adora on Dec.
24, 1981 and it would seem from MICO’s theory that the
Policy would have become effective only upon payment and
so would have been valid from Dec. 24, 1981 but only up to
July 22, 1982. IOW, in would have run for only 8 months
although the premium paid was for one whole year. Hence,
we do not share MICO’s view that there was no existing
insurance at the time of the loss sustained by Pinca.
For peace of mind and as a hedge against possible
loss, many people now secure fire insurance. This is an
aleatory contract. By such insurance, the insured in effect
wagers that his house will be burned, with the insurer
assuring him against the loss, for a fee. If the house does
burn, the insured, while losing his house, wins the wager.
The prize is the recompense to be given by the insurer to
make good the loss the insured has sustained. It would be a
pity then if, having lost his house, the insured were also to
lose payment he expects to recover for such loss. In the
instant case, the respondent has been sustained by the
Insurance Commission in her claim for compensation for her
burned property.
CONTRACT IS CONSIDERED A RISK-
DISTRIBUTING DEVICE
Tibay vs. CA, GR No. 119655
Topic: Contract is considered a risk-distributing device
FACTS:
In January 22 1987, the Petitioners obtained a fire
insurance policy for their 2-storey from the Private
Respondent Fortune Life Insurance Co. The said policy
covers the period from January 23, 1987 until January 23,
1988 or one year for P600, 000 and at the agreed premium
of P2, 983.50. On January 23 or the next day, petitioner
made a partial payment of the premium with P600.
Unfortunately, on March 8 1987, the said building was
burned to the ground. It was only two days after the fire that
Petitioner Violeta advanced the full payment of the policy
premium which was accepted by the insurer. On this same
day, petitioner likewise filed the claim that was then referred
to the insurer's adjuster. Investigation of the cause of fire
commenced and the petitioner submitted the required proof
of loss.
Despite that, the private respondent Fortune refused to pay
the insurance claim saying it as not liable due to the non-
payment by petitioner of the full amount of the premium as
stated in the policy.
The petitioner then brought the matter to the Insurance
Commission but nothing good came out. Hence this case
filed.
The trial court rule in favor of the petitioner. Upon appeal,
the Court of Appeals reversed the lower court's decision and
held that Fortune is not liable but ordered it to return the
premium paid with interest to the petitioner. Hence, this
petition for review.
ISSUE:
 WON a fire insurance policy be valid, binding and
enforceable upon mere partial payment of premium
RULING:
NO. Insurance is a contract whereby one
undertakes for a consideration to indemnify another against
loss, damage or liability arising from an unknown or
contingent event. The consideration is the premium, which
must be paid at the time, way and manner as stated in the
policy, and if not so paid as in this case, the policy is
therefore forfeited by its own terms. In this case, clearly, the
Policy provides for payment of premium in full. Since the
petitioner only made partial payment with the remaining
balance paid only after the fire or peril insured against has
occurred, the insurance contract therefore did not take effect
barring the insured from claiming or collecting from the loss
of her building. Accordingly, where the premium has only
been partially paid and the balance paid only after the peril
insured against has occurred, the insurance contract did not
take effect and the insured cannot collect at all on the policy.
This is fully supported by Sec. 77 of the Insurance Code
which provides SEC. 77. An insurer is entitled to payment
of the premium as soon as the thing insured is exposed to the
peril insured against. Notwithstanding any agreement to the
contrary, no policy or contract of insurance issued by an
insurance company is valid and binding unless and until the
premium thereof has been paid, except in the case of a life
or an industrial life policy whenever the grace period
provision applies
Furthermore, the court explained that in the desire
to safeguard the interest of the assured, it must not be ignored
that the contract of insurance is primarily a risk-distributing
device, a mechanism by which all members of a group
exposed to a particular risk contribute premiums to an
insurer. From these contributory funds are paid whatever
losses occur due to exposure to the peril insured against.
Each party therefore takes a risk: the insurer, that of being
compelled upon the happening of the contingency to pay the
entire sum agreed upon, and the insured, that of parting with
the amount required as premium, without receiving anything
therefor in case the contingency does not happen. To ensure
payment for these losses, the law mandates all insurance
companies to maintain a legal reserve fund in favor of those
claiming under their policies. It should be understood that
the integrity of this fund cannot be secured and maintained
if by judicial fiat partial offerings of premiums were to be
construed as a legal nexus between the applicant and the
insurer despite an express agreement to the contrary.
Interpreting the contract of insurance stringently
against the insurer but liberally in favor of the insured
despite clearly defined obligations of the parties to the policy
can be carried out to extremes that there is the danger that
we may, so to speak, kill the goose that lays the golden egg.
We are well aware of insurance companies falling into the
despicable habit of collecting premiums promptly yet
resorting to all kinds of excuses to deny or delay payment of
just insurance claims. But, in this case, the law is manifestly
on the side of the insurer. For as long as the current Insurance
Code remains unchanged and partial payment of premiums
is not mentioned at all as among the exceptions provided in
Secs. 77 and 78, no policy of insurance can ever pretend to
be efficacious or effective until premium has been fully paid.
Fieldmen’s Insurance v CA, GR No. L-24833
Topic: Characteristics of Insurance (Perfect Good Faith)
FACTS:
Benjamin Sambat, agent of Fieldmen’s Insurance,
convinced Federico Songco, a man of scant education and
owner of a private jeepney, to apply for a common carrier’s
liability insurance policy. While the vehicle was driven by
Rodolfo, Federico’s son, a road mishap occurred and killed
and injured many, including Federico and Rodolfo.
According to Fieldmen’s Insurance, it is not liable because
the jeepney was not a common carrier although the insurance
policy was for common carrier’s liability and so did not fall
within its terms.
ISSUE:
WON Fieldmen’s Insurance liable?
RULING:
Yes. After Fieldmen’s Insurance had led the insured
Federico Songco to believe that he could qualify under the
common carrier liability insurance policy and to enter into
contract of insurance paying the premiums due, it could not,
thereafter, in any litigation arising out of such representation,
be permitted to change its stand to the detriment of the heirs
of the insured. As estoppel is primarily based on the doctrine
good faith and the avoidance of harm that will befall the
innocent party due to its injurious reliance, the failure to
apply it in this case would result in a gross travesty of justice.
CONTRACT OF INDEMNITY (EXCEPT LIFE AND
ACCIDENT INSURANCE WHERE THE RESULT IS
DEATH)
White Gold Marine Services Inc. v. Pioneer Insurance and
Surety Corp., GR No. 154514
FACTS:
White Gold Marine Services, Inc. (White Gold)
procured a protection and indemnity coverage for its vessels
from The Steamship Mutual Underwriting Association
(Bermuda) Limited (Steamship Mutual) through Pioneer
Insurance and Surety Corporation (Pioneer). Subsequently,
White Gold was issued a Certicate of Entry and Acceptance.
3 Pioneer also issued receipts evidencing payments for the
coverage. When White Gold failed to fully pay its accounts,
Steamship Mutual refused to renew the coverage. Steamship
Mutual thereafter led a case against White Gold for
collection of sum of money to recover the latter's unpaid
balance. White Gold on the other hand, led a complaint
before the Insurance Commission claiming that Steamship
Mutual violated Sections 186 4 and 187 5 of the Insurance
Code, while Pioneer violated Sections 299, 6 300 7 and 301
8 in relation to Sections 302 and 303, thereof. The Insurance
Commission dismissed the complaint. It said that there was
no need for Steamship Mutual to secure a license because it
was not engaged in the insurance business. It explained that
Steamship Mutual was a Protection and Indemnity Club (P
& I Club). Likewise, Pioneer need not obtain another license
as insurance agent and/or a broker for Steamship Mutual
because Steamship Mutual was not engaged in the insurance
business. Moreover, Pioneer was already licensed, hence, a
separate license solely as agent/broker of Steamship Mutual
was already superfluous. The Court of Appeals armed the
decision of the Insurance Commissioner. In its decision, the
appellate court distinguished between P & I Clubs vis-à-vis
conventional insurance. The appellate court also held that
Pioneer merely acted as a collection agent of Steamship
Mutual.
ISSUE:
Whether or not petitioner shall indemnify as there
is a contract of insurance.
RULING:
YES. Basically, an insurance contract is a contract
of indemnity. In it, one undertakes for a consideration to
indemnify another against loss, damage or liability arising
from an unknown or contingent event. The test to determine
if a contract is an insurance contract or not, depends on the
nature of the promise, the act required to be performed, and
the exact nature of the agreement in the light of the
occurrence, contingency, or circumstances under which the
performance becomes requisite. It is not by what it is called.
PERSONAL CONTRACT
Insular Life vs. Ebrado, GR No. L-44059
FACTS:
On September 1, 1968, Buenaventura Cristor
Ebrado was issued by The Life Assurance Co., Ltd on a
whole-life for P5,882.00 with a rider for Accidental Death
of the same amount. Buenaventura Ebrado designated
Carpinoa T. Ebrado as the revocable beneficiary in his
policy. On October 21, 1969: Buenaventura was hit by a
falling branch and died. As the policy was in force, The
Insular Life Assurance Co., Ltd. was liable to pay the
coverage. Carponia T. Ebrado filed with the insurer a claim
for the proceeds of the Policy as the designated beneficiary
therein, although she admits that she and the insured
Buenaventura C. Ebrado were merely living as husband and
wife without the benefit of marriage. Pascuala Vda. de
Ebrado also filed her claim as the widow of the deceased
insured. She asserts that she is the one entitled to the
insurance proceeds, not the common-law wife, Carponia T.
Ebrado. In doubt as to whom the insurance proceeds shall
be paid, The Insular Life Assurance Co., Ltd. commenced an
action for Interpleader before the Court of First Instance. It
was agreed upon and stipulated therein by the parties that the
deceased insured was married to Pascuala Ebrado with
whom she has six legitimate children; that during his
lifetime, the deceased insured was living with his common-
law wife, Carponia Ebrado, with whom he has two children.
The trial court disqualified Carponia (common
law wife) because of adultery. It held that it is patent from
the last paragraph of Art. 739 of the Civil Code that a
criminal conviction for adultery or concubinage is not
essential in order to establish the disqualification mentioned
therein. Neither is it also necessary that a finding of such
guilt or commission of those acts be made in a separate
independent action brought for the purpose. The guilt of the
donee (beneficiary) may be proved by preponderance of
evidence in the same proceeding (the action brought to
declare the nullity of the donation). It is, however, essential
that such adultery or concubinage exists at the time
defendant Carponia T. Ebrado was made beneficiary in the
policy in question for the disqualification and incapacity to
exist and that it is only necessary that such fact be established
by preponderance of evidence in the trial. Since it is agreed
in their stipulation that the deceased insured and defendant
Carponia T. Ebrado were living together as husband and
wife without being legally married and that the marriage of
the insured with the other defendant Pascuala Vda. de
Ebrado was valid and still existing at the time the insurance
in question was purchased. There is no question that
defendant Carponia T. Ebrado is disqualified from becoming
the beneficiary of the policy in question and as such she is
not entitled to the proceeds of the insurance upon the death
of the insured.
ISSUE:
W/N Carponia is disqualified for violating the
Civil Code which supplements the silent Insurance Code.
RULING:
YES. The new Insurance Code (PD No. 612, as
amended) does not contain any specific provision grossly
resolutory of the prime question at hand. Section 50 of the
Insurance Act which provides that "the insurance shall be
applied exclusively to the proper interest of the person in
whose name it is made". The word "interest" highly suggests
that the provision refers only to the "insured" and not to the
beneficiary, since a contract of insurance is personal in
character. Otherwise, the prohibitory laws against illicit
relationships especially on property and descent will be
rendered nugatory, as the same could easily be circumvented
by modes of insurance. Rather, the general rules of civil law
should be applied to resolve this void in the Insurance Law.
Article 2011 of the New Civil Code states: "The contract of
insurance is governed by special laws. Matters not expressly
provided for in such special laws shall be regulated by this
Code." When not otherwise specifically provided for by the
Insurance Law, the contract of life insurance is governed by
the general rules of the civil law regulating contracts. And
under Article 2012 of the same Code, "any person who is
forbidden from receiving any donation under Article 739
cannot be named beneficiary of a life insurance policy by the
person who cannot make a donation to him. Common-law
spouses are, definitely, barred from receiving donations
from each other. In essence, a life insurance policy is no
different from a civil donation insofar as the beneficiary is
concerned. Both are founded upon the same consideration:
liberality. A beneficiary is like a donee, because from the
premiums of the policy which the insured pays out of
liberality, the beneficiary will receive the proceeds or profits
of said insurance. As a consequence, the proscription in
Article 739 of the new Civil Code should equally operate in
life insurance contracts. The mandate of Article 2012 cannot
be laid aside: any person who cannot receive a donation
cannot be named as beneficiary in the life insurance policy
of the person who cannot make the donation.

While it is not yet proven that she is guilty of

adultery, We do not think that a "conviction" for adultery or
concubinage is exacted before the disabilities mentioned in
Article 739 may effectuate.
Article 739 of the new Civil Code provides: The following
donations shall be void:
⎯ Those made between persons who were guilty of adultery
or concubinage at the time of donation;
⎯ Those made between persons found guilty of the same
criminal offense, in consideration thereof;
⎯ Those made to a public officer or his wife, descendants or
ascendants by reason of his office.

In the case referred to in No. 1, the action for declaration of

nullity may be brought by the spouse of the donor or donee;
and the guilt of the donee may be proved by preponderance
of evidence in the same action. The requisite proof of
common-law relationship between the insured and the
beneficiary has been conveniently supplied by the
stipulations between the parties in the pre-trial conference of
the case. It case agreed upon and stipulated therein that the
deceased insured Buenaventura C. Ebrado was married to
Pascuala Ebrado with whom she has six legitimate children;
that during his lifetime, the deceased insured was living with
his common-law wife, Carponia Ebrado, with whom he has
two children. These stipulations are nothing less than
judicial admissions which, as a consequence, no longer
require proof and cannot be contradicted. On the basis of
these admissions, a judgment may be validly rendered
without going through the rigors of a trial for the sole
purpose of proving the illicit liaison between the insured and
the beneficiary. (there is preponderance of evidence when
they admitted those facts during pre trial (interpleader).