Lim vs. Kou Co Ping

LIM VS KOU CO PING

Facts:

FR Cement Corporation (FRCC), owner/operator of a cement manufacturing plant, issued several withdrawal authorities for the account of cement dealers and traders, Fil-Cement Center and Tigerbilt. These withdrawal authorities state the number of bags that the dealer/trader paid for and can withdraw from the plant. Each withdrawal authority is valid for six months from its date of issuance, unless revoked by FRCC Marketing Department.

Fil-Cement Center and Tigerbilt sold the withdrawal authorities covering 50,000 bags of cement to Co for P3.15 million (P63.00 per bag). Co then sold these withdrawal authorities to Lim at the price of P64.00 per bag (total of P3.2 million). Using the withdrawal authorities, Lim withdrew the cement bags from FRCC on a staggered basis. She withdrew 2,800 bags of cement, and sold back some of the withdrawal authorities (covering 10,000 bags) to Co. Sometime in April 1999, FRCC did not allow Lim to withdraw the remaining 37,200 bags covered by the withdrawal authorities. Lim clarified the matter with Co, who explained that the plant implemented a price increase and would only release the goods once Lim pays for the price difference or agrees to receive a lesser quantity of cement. Lim objected and maintained that the withdrawal authorities she bought were not subject to price fluctuations. Lim sought legal recourse after her demands for Co to resolve the problem with the plant or for the return of her money had failed.

An Information for Estafa through Misappropriation or Conversion was filed against Co before the RTC of Pasig City. Lim also filed a complaint for specific performance and damages before the RTC of Manila.

Issue:

Whether or not Lim commit forum shopping in filing the civil case for specific performance and damages during the pendency of her appeal on the civil aspect of the criminal case for estafa

Held:

No. A single act or omission that causes damage to an offended party may give rise to two separate civil liabilities on the part of the offender  (1) civil liability ex delicto, that is, civil liability arising from the criminal offense under Article 100 of the Revised Penal Code, and (2) independent civil liability, that is, civil liability that may be pursued independently of the criminal proceedings.

The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute the criminal offense; hence, its trial is inherently intertwined with the criminal action. For this reason, the civil liability ex delicto is impliedly instituted with the criminal offense. If the action for the civil liability ex delicto is instituted prior to or subsequent to the filing of the criminal action, its proceedings are suspended until the final outcome of the criminal action. The civil liability based on delict is extinguished when the court hearing the criminal action declares that “the act or omission from which the civil liability may arise did not exist.”

On the other hand, the independent civil liabilities are separate from the criminal action and may be pursued independently, as provided in Articles 31 and 33 of the Civil Code.

In this case, the first action is clearly a civil action ex delicto, it having been instituted together with the criminal action. On the other hand, the second action, judging by the allegations contained in the complaint, is a civil action arising from a contractual obligation and for tortious conduct (abuse of rights). Thus, Civil Case No. 05-112396 involves only the obligations arising from contract and from tort, whereas the appeal in the estafa case involves only the civil obligations of Co arising from the offense charged. They present different causes of action, which, under the law, are considered "separate, distinct, and independent" from each other. Both cases can proceed to their final adjudication, subject to the prohibition on double recovery under Article 2177 of the Civil Code.

Ramiscal vs Sandiganbayan

JOSE S. RAMISCAL, JR. vs.  SANDIGANBAYAN

CALLEJO, SR., J

G.R. Nos. 140576-99 | December 13, 2004

Nature:  Petition for review on certiorari under Rule 45 of the Revised Rules of Court, of the Resolution of the Sandiganbayan

Keyword: Jurisdiction

FACTS: The Armed Forces of the Philippines Retirement and Separation Benefits System (AFP-RSBS) is a government-owned or controlled corporation. It was designed to establish a separate fund to guarantee continuous financial support to the AFP military retirement system. Under the decree, the AFP-RSBS was to be funded from three principal sources: (a) congressional appropriations and compulsory contributions from members of the AFP; (2) donations, gifts, legacies, bequests and others to the system; and (3) all earnings of the system which shall not be subject to any tax whatsoever.

On December 18, 1997, Luwalhati R. Antonino, then a member of the House of Representatives representing the First District of the Province of South Cotabato, filed a "Complaint-Affidavit" with the Office of the Ombudsman for Mindanao. She alleged that anomalous real estate transactions involving the Magsaysay Park at General Santos City and questionable payments of transfer taxes prejudicial to the government had been entertained into between certain parties. She then requested the Ombudsman to investigate Ramiscal, Jr. (President of the AFP-RSBS), together with twenty-seven (27) other persons for conspiracy in misappropriating AFP-RSBS funds and in defrauding the government millions of pesos in capital gains and documentary stamp taxes.

On January 28, 1999, after the requisite preliminary investigation, Special Prosecutor Joy C. Rubillar-Arao filed twenty-four (24) separate Informations with the Sandiganbayan against the petitioner and several other accused. The filing of the Informations was duly approved by then Ombudsman Aniano A. Desierto. The first twelve (12) Informations were for violation of Section 3(e) of Rep. Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act. The petitioner filed an Urgent Motion to Dismiss the Informations and to defer the Issuance of Warrant of Arrest, alleging want of jurisdiction. Meanwhile, pending resolution of the aforementioned motions, the law firm of Albano & Associates filed a "Notice of Appearance" as private prosecutors in all the aforementioned cases for the Association of Generals and Flag Officers, Inc. (AGFOI) on March 9, 1999. The notice of appearance was apparently made conformably to the letter-request of Retired Commodore Ismael Aparri and Retired Brig. Gen. Pedro Navarro, who are members thereof. In its comment, the law firm contended that its clients, Commodore Aparri and Brig. Gen. Navarro, were members of the AGFOI and contributors of AFP-RSBS.

ISSUE: Whether or not AGFOI as represented by Albano & Associates are private injured parties entitled to intervene as the private prosecutor in the subject cases.

RULING: We agree with the contention of the petitioner that the AGFOI, and even Commodore Aparri and Brig. Gen. Navarro, are not the offended parties envisaged in Section 16, Rule 110, in relation to Section 1, Rule 111 of the Revised Rules of Criminal Procedure.

Under Section 5, Rule 110  of the Rules, all criminal actions covered by a complaint or information shall be prosecuted under the direct supervision and control of the public prosecutor. Thus, even if the felonies or delictual acts of the accused result in damage or injury to another, the civil action for the recovery of civil liability based on the said criminal acts is impliedly instituted and the offended party has not waived the civil action, reserved the right to institute it separately or instituted the civil action prior to the criminal action, the prosecution of the action inclusive of the civil action remains under the control and supervision of the public prosecutor. The prosecution of offenses is a public function. Under Section 16, Rule 110 of the Rules of Criminal Procedure, the offended party may intervene in the criminal action personally or by counsel, who will act as private prosecutor for the protection of his interests and in the interest of the speedy and inexpensive administration of justice. A separate action for the purpose would only prove to be costly, burdensome and time-consuming for both parties and further delay the final disposition of the case. The multiplicity of suits must be avoided. With the implied institution of the civil action in the criminal action, the two actions are merged into one composite proceeding, with the criminal action predominating the civil. The prime purpose of the criminal action is to punish the offender in order to deter him and others from committing the same or similar offense, to isolate him from society, reform and rehabilitate him or, in general, to maintain social order.

On the other hand, the sole purpose of the civil action is for the resolution, reparation or indemnification of the private offended party for the damage or injury he sustained by reason of the delictual or felonious act of the accused.50 Under Article 104 of the Revised Penal Code, the following are the civil liabilities of the accused:

ART. 104. What is included in civil liability. – The civil liability established in Articles 100, 101, 102 and 103 of this Code includes:

1. Restitution;

2. Reparation of the damage caused;

3. Indemnification for consequential damages.

Thus, when the offended party, through counsel, has asserted his right to intervene in the proceedings, it is error to consider his appearance merely as a matter of tolerance.

Under Section 16, Rule 110 of the Revised Rules of Criminal Procedure, the offended party may also be a private individual whose person, right, house, liberty or property was actually or directly injured by the same punishable act or omission of the accused, or that corporate entity which is damaged or injured by the delictual acts complained of. Such party must be one who has a legal right; a substantial interest in the subject matter of the action as will entitle him to recourse under the substantive law, to recourse if the evidence is sufficient or that he has the legal right to the demand and the accused will be protected by the satisfaction of his civil liabilities. Such interest must not be a mere expectancy, subordinate or inconsequential. The interest of the party must be personal; and not one based on a desire to vindicate the constitutional right of some third and unrelated party.

Philamcare Health Services Inc. vs CA, 379 SCRA 356

PHILAMCARE HEALTH SYSTEMS, INC. V CA (TRINOS)

379 SCRA 357; YNARES-SANTIAGO; March 18, 2002

NATURE

Petition for review of CA decision

FACTS

- Ernani TRINOS, deceased husband of respondent Julita, applied for a health care coverage with Philamcare Health Systems, Inc. In the standard application form, he answered no to the question:

“Have you or any of your family members ever consulted or been treated for high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer? (If Yes, give details).”

- The application was approved for period of one year; upon termination, it was extended for another

2 years. Amount of coverage was increased to a maximum sum of P75T per disability.

- During this period, Ernani suffered a HEART ATTACK and was confined at the Manila Medical Center (MMC) for one month. While her husband was in the hospital, Julita tried to claim the hospitalization benefits.    

- Petitioner treated the Health Care Agreement (HCA) as void since there was a concealment regarding Ernani’s medical history. Doctors at the MMC allegedly discovered at the time of his confinement, he was hypertensive, diabetic and asthmatic. Julita then paid the hospitalization expenses herself, amounting to about P76T.

- After her husband died, Julita instituted action for damages against Philamcare and its Pres. After trial, the lower court ruled in her favor and ordered Philamcare to reimburse medical and hospital coverage amounting to P76T plus interest, until fully paid; pay moral damages of P10T; pay exemplary damages of P10T; atty’s fees of P20T.

- CA affirmed the decision of the trial court but deleted all awards for damages and absolved petitioner Reverente.

Petitioner’s Claims

(1) Agreement grants “living benefits” such as medical check-ups and hospitalization which a member may immediately enjoy so long as he is alive upon effectivity of the agreement until its expiration.

(2) Only medical and hospitalization benefits are given under the agreement without any indemnification, unlike in an insurance contract where the insured is indemnified for his loss.

(3) HCAs are only for a period of one year; therefore, incontestability clause does not apply, as it

requires effectivity period of at least 2 yrs.

(4) It is not an insurance company, governed by Insurance Commission, but a Health Maintenance Organization under the authority of DOH.

(5) Trinos concealed a material fact in his application.

(6) Julita was not the legal wife since at the time of their marriage, the deceased was previously married to another woman who was still alive.*

ISSUES

1. WON a health care agreement is an insurance contract (If so, “incontestability clause” under the Insurance Code is applicable)

2. WON the HCA can be invalidated on the basis of alleged concealment

HELD YES

Ratio Every person has an insurable interest in the life and health of himself2. The health care agreement was in the nature of non-life insurance, which is primarily a contract of indemnity. Once the member incurs hospital, medical or any other expense arising from sickness, injury or other stipulated contingent, the health care provider must pay for the same to the extent agreed upon under the contract.

Reasoning

- A contract of insurance3 is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.

- An insurance contract exists where the following elements concur:

(a) The insured has an insurable interest;

(b) The insured is subject to a risk of loss by the happening of the peril;

(c) The insurer assumes the risk;

(d) Such assumption of risk is part of a general scheme to distribute actual losses among a large group of persons bearing a similar risk; and

(e) In consideration of the insurer’s promise, the insured pays a premium.

2. NO

Ratio Where matters of opinion or judgment are called for, answers made in good faith and without intent to deceive will not avoid a policy even though they are untrue; since in such case the insurer is not justified in relying upon such statement, but is obligated to make further inquiry.

Reasoning

- The fraudulent intent on the part of the insured must be established to warrant rescission of the insurance contract. The right to rescind should be exercised previous to the commencement of an action on the contract. No rescission was made. Besides, the cancellation of health care agreements as in insurance policies requires:

(a) Prior notice of cancellation to insured;

(b) Notice must be based on the occurrence after effective date of the policy of one or more of the grounds mentioned;

(c) Must be in writing, mailed or delivered to the insured at the address shown in the policy;

(d) Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of insured, to furnish facts on which cancellation is based.

- These conditions have not been met. When the terms of insurance contract contain limitations on liability, courts should construe them in such a way as to preclude insurer from non-compliance of obligation. Being a contract of adhesion, terms of an insurance contract are to be construed strictly against the party which prepared it – the insurer.

- Also, Philamcare had 12 months from the date of issuance of the Agreement within which to contest the membership of the patient if he had previous ailment of asthma, and six months from the issuance

of the agreement if the patient was sick of diabetes or hypertension.

* The health care agreement is in the nature of a contract of indemnity. Hence, payment should be

made to the party who incurred the expenses. It is clear that respondent paid all the hospital and medical bills; thus, she is entitled to reimbursement.

Disposition Petition DENIED.

White Gold Marine Services vs. Pioneer Insurance, GR No. 154514, 28 July 2005

WHITE GOLD MARINE SERVICES v. PIONEER INSURANCE

464 SCRA 448; QUISUMBING; July 28, 2005

NATURE

This petition for review assails the Decision of the Court of Appeals, affirming the Decision of the Insurance Commission. Both decisions held that there was no violation of the Insurance Code and the respondents do not need license as insurer and insurance agent/broker.

FACTS

- White Gold procured a protection and indemnity coverage for its vessels from Steamship Mutual through Pioneer Insurance. Subsequently, White Gold was issued a Certificate of Entry and Acceptance. 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 filed a case against White Gold for collection of sum of money to recover

the latter’s unpaid balance. White Gold on the other hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual violated Sections 186 and 187 of the Insurance Code, while Pioneer violated Sections 299, 300 and 301 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 affirmed 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.

ISSUES

1. WON Steamship Mutual, a P & I Club, is engaged in the insurance business in the Philippines

2. WON Pioneer needs a license as an insurance agent/broker for Steamship Mutual

HELD

1.        YES

- 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. 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.

- In particular, a marine insurance undertakes to indemnify the assured against marine losses, such as the losses incident to a marine adventure. Section 99 of the Insurance Code enumerates the coverage of marine insurance.

- Relatedly, a mutual insurance company is a cooperative enterprise where the members are both

the insurer and insured. In it, the members all contribute, by a system of premiums or assessments, to the creation of a fund from which all losses and liabilities are paid, and where the profits are divided among themselves, in proportion to their interest. Additionally, mutual insurance associations, or clubs, provide three types of coverage, namely, protection and indemnity, war risks, and defense costs.

- A P & I Club is “a form of insurance against third party liability, where the third party is anyone other than the P & I Club and the members.” By definition then, Steamship Mutual as a P & I Club is a mutual insurance association engaged in the marine insurance business.

- The records reveal Steamship Mutual is doing business in the country albeit without the requisite certificate of authority mandated by Section 187 of the Insurance Code. It maintains a resident agent in the Philippines to solicit insurance and to collect payments in its behalf. We note that Steamship Mutual even renewed its P & I Club cover until it was cancelled due to non-payment of the calls. Thus, to continue doing business here, Steamship Mutual or through its agent Pioneer, must secure a license from the Insurance Commission.

- Since a contract of insurance involves public interest, regulation by the State is necessary. Thus, no insurer or insurance company is allowed to engage in the insurance business without a license or a certificate of authority from the Insurance Commission.

2. YES

- SEC. 299 . . .

- No person shall act as an insurance agent or as an insurance broker in the solicitation or procurement of applications for insurance, or receive for services in obtaining insurance, any commission or other compensation from any insurance company doing business in the Philippines or any agent thereof, without first procuring a license so to act from the Commissioner, which must be renewed annually on the first day of January, or within six months thereafter.

Disposition The petition is PARTIALLY GRANTED. The Decision dated July 30, 2002 of the Court of Appeals affirming the Decision dated May 3, 2000 of the Insurance Commission is hereby REVERSED AND

SET ASIDE. The Steamship Mutual Underwriting Association (Bermuda) Ltd., and Pioneer Insurance and Surety Corporation are ORDERED to obtain licenses and to secure proper authorizations to do business as insurer and insurance agent, respectively. The petitioner’s prayer for the revocation of Pioneer’s Certificate of Authority and removal of its directors and officers, is DENIED.

Filipinas-Compania de Seguros de Nava vs Mandanas, 17 SCRA 210 (1966)

FILIPINAS LIFE ASSURANCE v. NAVA

17 SCRA 210; BAUTISTA ANGELO; May 20, 1966

NATURE

Petition for review of a decision of the Court of Appeals

FACTS

- Before the war, Nava entered into a contract of insurance with Insular Life Assurance Co., Ltd. (face value of P5k), and 17 separate contracts of life insurance with Filipinas Life Assurance Co. (total face value of P90k). Each and everyone of the 18 policies issued by defendants to plaintiff contains a loan clause of the following tenor:

Policy loans. After three full years' premiums have been paid upon this Policy, if no premium payment is in default, the Company, subject to its then existing rules, will advance on proper assignment and delivery of this Policy and on the sole security thereof a sum equal to, or at the option of the owner less than, the cash value specified in the Schedule of Policy Values, less any existing indebtedness on or secured by this Policy and any unpaid balance of the premium for the current policy-year; provided interest at six per centum per annum on the whole amount of the loan is paid in advance to the end of the current policy-year. At the end of the current policy-year interest at the same rate for one year in advance will be due and payable, and annually thereafter, and if not so paid will be added to the principal and bear the same rate of interest. Failure to repay any such loan or interest shall not avoid this

Policy unless the total indebtedness shall equal or exceed the full amount of the loan value available hereunder. Any indebtedness on this Policy shall first be deducted from any money payable or in anysettlement under this Policy.

- Nava had so far paid to Insular a total of P2,574; and to Filipinas Life, a total of P32,072.60.

- April 28, 1948: Nava applied to the companies for a P5k loan in line with the loan clause, but they refused to grant it because certain regulations issued by the Insurance Commissioner required the insurance companies to withhold the payments on premiums made during the Japanese occupation because the same shall be subject to future adjustments " as soon as debtor-creditor relationship is established" and because of such process of "withholding" plaintiff was not entitled to borrow any amount until such adjustment has been made.

- Sept 30, 1948: Nava called the attention of the insurance companies to the SC decision (Haw Pia v. China Banking Corporation) establishing and recognizing the relationship of debtor and creditor with respect to payments in fiat currency made during the Japanese occupation on pre-war obligations.

- Companies still refused saying that the SC decision was not applicable to transactions undertaken during

Japanese occupation when they relate to life insurance policies.

- Feb 4, 1949: Nava was again refused even if the total amount of the cash surrender values of the 18 policies reached the sum of P9,468.29.

- Feb 10, 1949: Nava brought case to the CFI Manila praying for the rescission of the abovementioned 18 policies and for the refund to him of all the premiums so far paid by him to defendants in the amount of P31,633.80, plus 6% interest thereon as damages

- Nov 28, 1951: companies passed a resolution which was approved by the Insurance Commissioner, giving full credit to all premium payments made by their policyholders in fiat currency during the Japanese occupation on account of pre-war policies for which reason they filed an amended answer offering to pay plaintiff the amount of P9,468.29 which represents the aggregate cash surrender values of all the policies in question as of February 10, 1949, but apparently this offer was refused.

- CFI: (1) rescinded the insurance contracts; (2) ordered defendant Filipinas Life Assurance Co. to pay plaintiff the amount of P32,072.60; and (3) ordered defendant Insular Life Assurance Co., Ltd. to pay plaintiff the amount of P2,574.00

- CA affirmed.

ISSUES

1. WON CA erred in ruling that as a consequence of the decision in the Haw Pia case petitioners violated the loan clause contained in the insurance policies thereby entitling respondent to their rescission

2. WON CA erred in ruling that by virtue of Article 1295 of the old Civil Code petitioners should refund to defendant all the premiums paid on his insurance policies as a consequence of their rescission

3. WON CA erred in not ruling that, even if respondent is entitled to the rescission of said insurance policies, he can only recover their cash surrender value at the time the complaint was filed

HELD

1.       NO.

- Even assuming the validity of the Insurance Commissioner’s regulations, the fact however is that such requirement has already lost its legal effect and value when our Supreme Court rendered its decision in the Haw Pia case wherein it was declared, among others, that all payments made in fiat currency during the Japanese occupation in relation with any contractual obligation executed before the war were valid to all intents and purposes, and yet petitioners apparently did not give any importance to such decision for in their opinion it does not have any application to transactions which have any relation to payment of premiums on life insurance policies.

- It cannot be denied that a life insurance policy involves a contractual obligation wherein the insured becomes duty bound to pay the premiums agreed upon, lest he runs the risk of having his insurance policy lapse if he fails to pay such premiums.

- The fact that if the insured had paid in full the premiums corresponding to the first 3 years of the life of his policy he cannot be considered delinquent that would cause the lapse of his policy if the same contains an automatic premium payment clause cannot divest such policy of its contractual nature, for the result of such failure would only be for him to pay later the premium plus the corresponding interest depending upon the condition of the policy. But certainly it does not cease to be a contractual liability insofar as the payment of that premium is concerned for whether he likes it or not that premium has to be paid lest he allows the lapse of his policy. Consequently, the payment of premiums on the life insurance policies made by Nava before and during the war up to the time he applied for the loan in question with petitioners should be considered likewise as valid payments upon the theory that such insurance policies are in the nature of a contractual obligation within the meaning of the civil law. In effect, therefore, those payments were made by a debtor to a creditor within the meaning of the requirement of the regulations of the Insurance Commissioner and as such they can offer no excuse to petitioners for refusing to grant the loan as contemplated in the loan clause embodied in the policies in question.

- It is clear from the foregoing that the petitioners violated the loan clause embodied in each of the 18 life insurance policies issued to respondent to rescind all said policies under Section 69 of the Insurance Act, which provides: "The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind."

- "The general rule is that a breach of the agreement to make the loan does not entitle the insured to rescind the contract," is not controlling in this jurisdiction. Firstly, it was not shown that the insurance laws in the states where said ruling prevails contain a provision identical to Section 69 of our Insurance Law we quoted above, and secondly, the rule cited by Vance is not a rule uniformly followed by all states in the US, for on this matter there is a marked divergence of opinion.

2. NO

- Considering that our Insurance Law does not contain an express provision as to what the court should do in cases of rescission of an insurance policy under Section 69, the provision that should apply is that embodied in Article 1225 of the old Civil Code, as postulated in Article 16 of the same Code, which provides that on matters which are not governed by special laws the provisions of said Code shall supplement its deficiency. And said Article 1295 provides:

ART. 1295. Rescission makes necessary the return of the things which were the subject-matter of the contract, with their fruits, and of the price paid, with interest thereon. ...xxx

- Said the petitioners: "Recovery of the full amount of the premium after the insurer has sustained for sometime the risk of the insurance and the insured has enjoyed the benefit of protection is obviously unjust and is so recognized by the better authorities." The ruling above quoted merely represents the minority rule in the US, the majority rule being that the insured can recover all premiums paid, in some cases with interest in case of wrongful cancellation, repudiation, termination or rescission of the contract of life insurance.

- Contention that because respondent cannot restore to petitioners the "value of the benefit of protection"

which he might have received under the 18 life insurance policies in question he is not entitled to rescind them under the provision of Article 1295 of the old Civil Code, is untenable because said article only contemplates a transaction whether material things are involved, and do not refer to intangible ones which cannot be the subject of restoration, for to interpret it otherwise would be to defeat the law itself with the result that rescission can never be had under Section 69 of our Insurance Law.

- It cannot be denied that petitioners had in turn already derived material benefits from the use of premiums paid to them by respondent before, during and after the last war from which they must have realized huge profits, and in this light alone petitioners cannot claim prejudice or unfairness if they are ordered to refund the premiums paid by respondents.

3. NO.

- Issue is corollary to preceding issue. No need to refute.

Disposition Decision appealed from is AFFIRMED. Costs against petitioners