Insurance Case Digest: Gallardo v. Morales (1960)

G.R. No. L-12189 April 29, 1960
Lessons Applicable: Definition and Coverage of Life Insurance (Insurance)

Laws Applicable: Rule 39, section 12, subdivision (k) of the Rules of Court (old law)

FACTS:

CFI: Hermenegilda S. Morales to pay P7,000 to a creditor Francisca Gallardo
writ of execution was issued and delivered to the Sheriff who garnished and levied execution on the sum of P7,000 out of the P30,000 due from the Capital Insurance & Surety Co. Inc., to Morales as beneficiary whose husband Luis Morales died by assassination.
Morales asked the sheriff to quash and lift said garnishment or levy on execution invoking Rule 39, section 12, subdivision (k) of the Rules of Court but it was denied.

All moneys, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance, if the annual premiums paid do not exceed five hundred pesos, and if they exceed that sum a like exemption shall exist which shall bear the same proportion to the moneys, benefits, privileges, and annuities so accruing or growing out of such insurance that said five hundred pesos bears to the whole annual premiums paid.

Morales appealed maintaining that it was a life insurance for it insured her husband for injuries and/or death as a result of murder or assault or attempt thereat

ISSUE: W/N the insurance is a life insurance and not an accident insurance

HELD: NO. order appealed from is reversed, and the garnishment in dispute hereby set aside and quashed

If it were an ordinary life insurance policy, taking into account that the insured, Luis G. Morales, was 38 years of age and the amount of the policy was for P50,000.00 the annual premium would have been around P1,206

the period for the policy was stipulated for one year, and considerations as to age, health, occupation and other personal circumstances were not taken into account in an accident insurance policy
Annex "1" of the opposition, shows that the Capital Insurance and Surety Company Inc. is a non-life insurance company and that the only authority granted to it to transact business covers fire, marine, surety, fidelity, accident, motor car, and miscellaneous insurance, except life insurance
Accident vs Life Insurance Policy

accident policy - merely insures the person from injury and or death resulting from murder, assault, or an attempt thereat

life insurance policy - what is insured is the life of the subject for a definite number of years

investment contract
contract by which the insurer, for a stipulated sum, engages to pay a certain amount of money if another dies within the time limited by the policy
contract for insurance for one year in consideration of an advanced premium, with the right of assured to continue it from year to year upon payment of a premium as stipulated
includes accident insurance, since life is insured under either contract
includes all policies of insurance in which payment of insurance money is contingent upon loss of life

applies to ordinary life insurance contracts, as well as to those which, although intended primarily to indemnify for risks arising from accident, likewise, insure against loss of life due, either to accidental causes, or to the willful and criminal act of another, which, as such, is not strictly accidental in nature
statutes of this nature seek to enable the head of the family to secure his widow and children from becoming a burden upon the community and, accordingly, should merit a liberal interpretation

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