G.R. No.

228402, August 26, 2020

LOYOLA LIFE PLANS INCORPORATED (NOW LOYOLA PLANS CONSOLIDATED

INC.) AND ANGELITA D. LUMIQUED, PETITIONERS, V. ATR PROFESSIONAL
LIFE ASSURANCE CORPORATION (NOW ASIAN LIFE AND GENERAL ASSURANCE
CORPORATION), RESPONDENT.

G.R. No. 222912

ATR PROFESSIONAL LIFE ASSURANCE CORPORATION (NOW ASIAN LIFE AND

GENERAL ASSURANCE CORPORATION), PETITIONER, V. LOYOLA LIFE PLANS
INCORPORATED (NOW LOYOLA PLANS CONSOLIDATED INC.) AND ANGELITA
D. LUMIQUED, RESPONDENTS.

DECISION

CARANDANG, J.:

Before this Court are two consolidated Petitions for Review on Certiorari1 under Rule 45
of the Rules of Court, assailing the Decision 2 dated February 4, 2016 and the
Resolution3 dated November 17, 2016 of the Court of Appeals (CA) in CA-G.R. CV No.
97528.

Antecedents

Loyola Life Plans, Inc. (Loyola) is a pre-need company engaged in the business of
insuring the lives of its plan holders through its Timeplans (pension contracts) and
Lifeplans (memorial service contracts), which are covered by insurance benefits
provided by several insurance companies including GE Life Insurance Company,
Incorporated (GE Life), later known as ATR Professional Life Assurance Corporation
(ATR).4 On June 8, 1999, Loyola applied with ATR for a Group Creditors Life Insurance
plan, with Group Yearly Renewable Term Life and Accidental Death Benefit as
supplementary benefits.5 They entered into a Group Creditors Life Insurance
Agreement, effective on June 15, 1999, under Master Policy No. GCL-878. 6

On April 28, 2000, Dwight L. Lumiqued (Dwight), husband of Angelita Lumiqued

(Angelita), purchased a Timeplan from Loyola payable in 120 monthly installments in
the amount of P5,040.00 per month. To pay for the first monthly premium, Dwight
issued two Metrobank checks in the amounts of P2,824.75 and P600.00 under Check
Nos. 1200011493 and 1200114994, respectively. He also paid in cash P1,615.25.
Simultaneous with the payment of the first monthly premium, Dwight executed
Timeplan Application No. OT-003810717 for which Timeplan Contract No.
GGG4300047858 was issued.9 He was then issued an Official Receipt, 10 which expressly
states:

This Receipt is valid for downpayment only. Checks and other similar forms shall be
valid only when cleared by the Bank.11cralawlawlibrary
Belen Edith C. Ganit (Ganit), Loyola's Sales Operation Assistant, deposited on the same
day the two Metrobank checks while the cash payment was deposited to the account of
Loyola on May 2, 2000.12

On May 1, 2000, Dwight died due to multiple stab wounds. 13

Thereafter, Angelita filed a claim to recover the proceeds of the insurance benefits
through Loyola's broker, Network Unlimited, Inc. However, in a letter 14 dated April 17,
2001, ATR denied the claim on the ground that the initial installment payment was not
completed.15 Loyola asked for a reconsideration, insisting that the Timeplan Dwight
obtained was already in full force and effect upon payment of the premium on April 28,
2000.16

On October 16, 2001, ATR, through its Vice President of Legal and Compliance, denied
Angelita's claim, reiterating its position that payment of the premium had not been
completed.17 ATR also invalidated Dwight's application as his signature appearing
therein was allegedly forged.18 To bar Angelita from further pursuing any claim for the
insurance benefits, ATR instituted a complaint19 to declare the individual insurance
coverage of Dwight under Master Policy No. GCL-878 void and of no effect at the time
of his death on May 1, 2000. ATR also prayed for the payment of attorney's fees,
litigation expenses, and costs of suit. 20

In Loyola's Answer with Compulsory Counterclaim, 21 which was adopted in toto by

Angelita,22 Loyola argued that: (1) Dwight's signature appearing in his Timeplan
application was not forged;23 and (2) Dwight paid in full the first installment of the
insurance premium in the amount of P5,040.00 on April 28, 2000, prior to his
death.24 Loyola added that ATR cannot escape paying the proceeds under the Group
Creditors Life Insurance in the amount of P599,760.00, Group Yearly Renewable Term
Life in the amount of P604,800,00, and the Accidental Death Benefit in the amount of
P604,800.00 by insisting that Dwight was murdered. Loyola pointed out that ATR failed
to give any evidence to support its claim that Dwight was murdered and not a victim of
homicide.25 Thus, Loyola and Angelita prayed that ATR be directed to comply with its
obligations under the Group Creditors Life Insurance Agreement by paying
P1,809,360.00 in actual damages. In addition, Loyola and Angelita prayed that
judgment be rendered ordering ATR to pay moral damages, and exemplary damages.
Attorney's fees, litigation expenses, and costs of suit were also prayed for. 26
cralawred

Ruling of the Regional Trial Court

On July 7, 2011, the RTC rendered its Decision, 27 the dispositive portion of which reads:

WHEREFORE, the Court renders judgment:

1. DISMISSING the Complaint of plaintiff;

2. HOLDING plaintiff ATR Professional Life Insurance Corporation, now the Asian Life
and General Assurance Corporation, liable for defendants' counterclaim. Plaintiff is
ordered to: ChanRoblesVirtualawlibrary

a. Pay to defendant Angelita Lumiqued actual damages in the amount of P1,809,360;

b. Pay to defendants Loyola Plans Inc. and Angelita Lumiqued moral damages in the
amount of P100,000;
c. Pay to the defendants exemplary damages in the amount of P100,000;
d. Pay to the defendants attorney's fees in the amount of P100,000;
e. Pay to the defendants the costs of suit.
SO ORDERED.28 (Emphasis omitted)

The RTC held that Dwight timely paid the premium of the policy. Since the agreement
and the official receipt state that the insurance coverage of a planholder shall take
effect on the date of initial payment and/or down payment on the Timeplan, the RTC
ruled that the date of receipt by the agent of Loyola of the down payment on April 28,
2000 is also the date of payment of the premium. 29 The RTC also found that ATR's
allegation of forgery was a mere afterthought. 30 The RTC noted that it was only on
September 22, 2001, or almost 18 months after the death of the Dwight, that the
genuineness of his signature was assailed for the first time. 31

The RTC computed the actual damages as follows:

Group Creditors Life   Insurance P599.760.00

(outstanding balance net
of the first installment
paid)
Group Yearly Renewable 604,800.00 (the gross
Term Life contract price)
Accidental Death Benefit 604,800.00 (the gross
contract price)            
TOTAL P1,809,360.0032

The RTC also awarded P100,000.00 as moral damages for ATR's bad faith and
P100,000.00 as exemplary damages for not honoring its obligation. Attorney's fees in
the amount of P100,000.00 was also found to be reasonable. 33 cralawred

Ruling of the Court of Appeals

On February 4, 2016, the CA rendered its Decision, 34 the dispositive portion of which
reads:

WHEREFORE, premises considered, the instant Appeal is hereby DENIED. The

assailed Decision dated 7 July 2011 of the Regional Trial Court, Branch 136, Makati City
in Civil Case No. Q-01-1665 is hereby AFFIRMED with MODIFICATION by holding
appellant liable to pay the heirs or beneficiaries listed in the insurance policy Plan
Benefit in the amount of P992,000.00. Actual damages awarded in the aggregate
amount of P1,809,360.00 including the damages for moral and exemplary as well as
attorney's fees each in the sum of P100,000.00 are hereby DELETED.
SO ORDERED.35 (Emphasis in the original)

The CA held that the partial payment of the premium rendered the policy in full force
and effect. This is expressly provided in the terms of the policy. 36 The CA declared that
the assumption of risk by ATR started from the moment of the initial down payment on
the premium through the payment of checks and the cash received by Loyola's agent,
as reflected in the Official Receipt issued to Dwight on April 28, 2000.37

The CA explained that, though delivery of the checks does not immediately effect
payment, it simply suspends the action arising from the original obligation until
payment is accompanied either actually or presumptively. The payment of the premium
on the policy thus became an independent obligation, the non-fulfillment of which would
entitle the insurer to recover. The CA opined that the insurer could just deduct the
premium due and unpaid upon the satisfaction of the loss under the policy. It does not
have a right to cancel the policy. It could place the insured in default in case of such
and give the latter personal notice to that effect.38

The CA also did not find any merit to ATR's claim that Dwight's application was forged.
The testimony confirming the genuineness of Dwight's signature by the Philippine
National Police handwriting examiner Mely Feliciano Sora was given full
credence.39 Likewise, the CA believed Jacobo Gumiran's (Gumiran) statement that he
personally witnessed Dwight affix his signature in the application and even admitted
receiving the down payment. 40

The CA deleted the award of actual damages in the amount of P1,809,360.00, stating
that the Timeplan contract specifically provides payment of P992,000.00 as plan benefit
only. The CA did not find sufficient evidence to prove that the policy in question falls
within the categories of Group Creditors Life Insurance and Group Yearly Renewable
Term Life or that the death of Dwight was accidental in order for him to be entitled to
P1,809,360.00.41

The moral and exemplary damages awarded were deleted as the CA found that ATR did
not commit any fraudulent act nor employ bad faith. The CA also removed the award of
attorney's fees as the RTC decision did not state the reason why it was awarded. 42

On March 16, 2016, ATR filed its petition for review on certiorari docketed as G.R. No.
222912,43 claiming that it is not liable to pay the heirs of Dwight because: (1) Dwight
did not complete the monthly premium payment prior to his death because the cash
payment of P1,615.25 was only deposited on May 2, 2000; 44 (2) the Timeplan
application of Dwight is forged;45 and (3) murder is not among the risks covered by the
Group Creditors Life Insurance Agreement.46

In its Comment47 , Loyola pointed out that ATR's petition is premature because the CA
had not yet resolved Loyola's Motion for Reconsideration48 to the Decision of the CA.
Loyola proposed that the case be remanded to the CA for the final disposition of the
Motion for Reconsideration.49

Thereafter, in a Resolution50 dated November 17, 2016, the CA denied the Motion for
(Partial) Reconsideration Loyola filed.

Meanwhile, in the petition filed on January 11, 2017 docketed as G.R. No. 228402,
Loyola emphasized that the records, including documentary evidence and pleadings
submitted by ATR, recognize that the policy in question is entitled to the Group
Creditors Life Insurance and the Group Yearly Renewable Term Life benefits Loyola
obtained under Master Policy No. GCL-878.51 Loyola also highlighted that the amount of
P1,809,360 was stipulated by the parties and that the specific amount of loss need not
be proven.52 Loyola further argued that the CA erred in deleting the award of moral and
exemplary damages despite the trial court's finding of bad faith on the part of ATR and
its failure to honor its obligation.53 Contrary to the ruling of the CA, Loyola averred that
the award of attorney's fees is justified because it was clearly stated in the RTC decision
that ATR filed an unfounded suit.54

On January 18, 2017, the Court issued a Resolution ordering that G.R. No. 228402 and
G.R. No. 222912 be consolidated as both cases assail the same Decision of the CA in
CA-G.R. CV No. 97528.

In its Comment55 in G.R. No. 228402, ATR insisted that the amount paid by Dwight
should be treated only as a deposit and not a premium payment because the cash
payment of P1,615.25 was deposited on May 2, 2000, making the first installment not
fully paid.56 Because the downpayment in the amount of P5,040.00 was not fully paid
on its due date, April 28, 2000, ATR reiterated its position that the policy is not valid
and binding.57 ATR also maintained that it is not liable because "[m]urder or provoked
assault; or any attempt thereat" are among the exclusions of the policy. 58 Moreover,
ATR insisted that it has substantially proven that Dwight's Timeplan application was
forged.59

In its Reply,60 Loyola essentially restated its substantive arguments to support its

position.

Issues

The issues to be resolved are:

1. Whether Dwight's Timeplan application was forged;

2. Whether an insurance contract was perfected between Dwight and ATR on April
28, 2000 when Dwight paid Loyola's agent, Gumiran, cash in the amount of
P1,615.25 and two checks amounting to P2,824.75, and P600.00, thus entitling
his heirs to the proceeds of the policy following his death on May 1, 2000;
3. Whether the cause of Dwight's death is a risk covered by the Timeplan contract;
4. Whether Dwight's Timeplan contract is entitled to the Group Creditors Life
Insurance and the Group Yearly Renewable Term Life benefits obtained by
Loyola; and
5. Whether the CA correctly deleted the award of moral damages, exemplary
damages, and attorney's fees.
 Ruling of the Court

ATR failed to sufficiently establish

that Dwight's Timeplan application
was forged.

It is well-settled that allegations of forgery, like all other allegations, must be proved by
clear, positive, and convincing evidence by the party alleging it. It should not be
presumed but must be established by comparing the alleged forged signature with the
genuine signatures. Although handwriting experts are often offered as witnesses, they
are not indispensable because judges must exercise independent judgment in
determining the authenticity or genuineness of the signatures in question. 61

In this case, to prove forgery, ATR relied on the Report 62 of retired Chief Document
Examiner of the National Bureau of Investigation, Atty. Desiderio A. Pagui (Atty. Pagui),
who concluded that:

FINDINGS-CONCLUSION:

The questioned signature "Dwight L. Lumiqued" in carbon-original appears inherent

defect in line quality which comparing scientifically with standard signatures, assuming
that they are authentic copies of the originals, which though the latter are
undoubtedly clear copies reflecting free flowing execution of the writing strokes reveals
inconsistency in line qualities with the former. As consequence, while the original of
questioned document is preferably the most desired to be examined, the
available signatures would show significant differences in handwriting characteristics
between said questioned and standard signatures. Using those that are available as
aforesaid, the questioned and standard signatures could have not been affixed by one
and the same person.63 (Emphasis supplied)

Noticeably, the language used by Atty. Pagui in his findings is not definitive and cannot
be considered a reliable examination of the genuineness of Dwight's signature. While it
concludes that the questioned and standard signatures could not have been affixed by
one and the same person, this conclusion is made on the assumption that the standard
signatures provided by ATR are authentic copies of the originals. Moreover, only the
carbon-original copy of Dwight's questioned document was examined, not the original
questioned document bearing his signature. Atty. Pagui admitted that the original copy
of the document where the questioned signature appears is "preferably the most
desired to be examined." Even Mely Feliciano Sora, Chief of the Questioned Document
Examination Division of the Philippine National Police Crime Laboratory, opined that it is
impossible to conduct a reliable handwriting examination of Dwight's signature
appearing on the Timeplan Application. According the her, the Application is a mere
carbon original wherein the minute details are not clear. 64 Moreover, it must be stressed
that ATR hired Atty. Pagui to prepare the report. Thus, the CA was correct in not giving
credence to Atty. Pagui's testimony because his report is susceptible to bias and
prejudice.65 Given the unreliable quality of the available sample signatures of Dwight in
the records, the Court is inclined to refuse conducting an independent examination of
the genuineness of his signature in the disputed Timeplan application.
Nevertheless, the Court finds Gumiran's admission that he personally witnessed Dwight
affix his signature in the application sufficient to rebut the allegation of forgery.
Between the unreliable findings of Atty. Pagui and the sworn statement of Gumiran, the
Court is inclined to give more credence to the latter.

The Court also agrees with the observation of the lower courts that the allegation of
forgery is a mere afterthought. It was only on September 22, 2001, or almost 18
months after the death of Dwight, that ATR belatedly assailed for the first time the
genuineness of his signature. ATR's timing in raising the allegation of forgery is
suspicious and questionable.66 Thus, the Court is convinced that the signature of Dwight
appearing in his Timeplan application is genuine.

Dwight timely paid the initial monthly

premium for the Timeplan on April
28, 2000 to Loyola who is an agent of
ATR. Hence, an insurance contract was
perfected.

A contract of insurance is defined as an agreement whereby one undertakes for a

consideration to indemnify another against loss, damage, or liability arising from an
unknown or contingent event.67 An insurance contract exists where the following
elements concur: (1) the insured has an insurable interest; (2) the insured is subject to
a risk of loss by the happening of the designated peril; (3) the insurer assumes the
risk; (4) 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 (5) in consideration of the
insurer's promise, the insured pays a premium. 68 In the case of Perez v. Court of
Appeals,69 the Court held that assent is given when the insurer issues a corresponding
policy to the applicant. The Court declared that "[i]t is only when the applicant pays the
premium and receives and accepts the policy while he is in good health that the
contract of insurance is deemed to have been perfected."70

The fact that Dwight was only able to make an initial payment of the insurance
premium and that Loyola failed to immediately remit cash portion of the initial payment
to ATR should not affect the validity of the perfected insurance contract.

Furthermore, ATR agreed to insure all present and future planholders of Loyola. The
pertinent provisions in Master Policy No. GCL-878 on payment of premium and
effectivity of policy read:

DATE OF EFFECTIVITY OF INDIVIDUAL

INSURANCE

The insurance coverage of all present and future eligible PLANHOLDER shall become
effective on the latest of the following dates.

1. the date the contract of agreement with the CREDITOR is legally

perfected; or
2. the date of the initial payment and/or down payment;
3. the date written application is accomplishment (sic); or
 4. the date of approval by the COMPANY of evidence of insurability, if
required; or
5. the date the COMPANY received the corresponding premium. 71

xxxx

PAYMENT OF PREMIUMS

The initial premium for each benefit provided in the Policy shall be stated in the
SCHEDULE OF PREMIUM RATES provision applicable to said benefit. All premium on this
Policy are payable in advance directly to the Home Office of the Company or to a duly
authorized Agent of the Company.

Payment of premiums whether monthly, quarterly, semi-annually, or annually are

payable as they become due according to the mode of premium payment. Any change
in the mode of premium payments may be affected only at the beginning of any Policy
year. No premium payment shall maintain this Policy in force beyond the date when the
next premium becomes due, except as provided in the Grace Period provision herein. 72

xxxx

EFFECTIVE DATE

The coverage of insurable PLANHOLDER shall take effect on the date of initial

payment and/or down payment on the selected plan (as shown in the Binding
Deposit Receipt). However, the Company reserves the right to require a PLANHOLDER
to submit Evidence of Insurability even the coverage does not exceed the Non-Medical
Limit.

REPORTING OF INSURED PLANHOLDERS

xxxx

Applications for insurance must be submitted to GE LIFE within seven (7) working days
from the date of initial/ first payment of the Plan holders together with the list of
Certificate issued. Effective Date shall coincide with the date of first payment if
complied with. However, GE LIFE will not be held liable for Certificates issued not
reported for coverage within the said 7-working day period. 73 (Emphasis supplied)

Noticeably, the date of effectivity of individual insurance provision contains conflicting

terms that are susceptible to different interpretations. While the policy states that it
shall become effective on the "latest" of a list of dates, the use of the conjunction "or"
suggests that there are options and that any of the options chosen can give rise to the
effectivity of the individual insurance. Meanwhile, in the clause pertaining to the
"EFFECTIVE DATE" of the policy, it clearly states that "[t]he coverage of insurable
PLANHOLDER shall take effect on the date of initial payment and/or down payment on
the selected plan (as shown in the Binding Deposit Receipt)."74
The contract between ATR and Loyola is a contract of adhesion as it was prepared
solely by ATR for Loyola and its planholders to conform to. Any ambiguity in a contract
of adhesion is construed strictly against the party that prepared it. In this case, the
obscure provision pertaining to the date of effectivity of the policy coverage should be
resolved in favor of Angelita. Thus, the happening of any of the instances enumerated
should suffice in giving rise to the effectivity of the individual insurance. This
interpretation is more consistent with the other provisions of the policy such as the
clause on the "EFFECTIVE DATE" of the policy.

ATR argues that the date of receipt of payment of premium is the date when the cash
was actually deposited in the bank. The Court finds this proposition contrary to logic
and unreasonable.

Here, it is undisputed that at 10:34 am on April 28, 2000, Loyola's Sales Operation
Assistant deposited the two Metrobank checks at Metrobank Solano, Nueva Viscaya
branch. However, instead of immediately depositing the cash payment of P1,615.25,
Loyola used the money and waited until May 2, 2000, the next banking day which fell
on a Tuesday, to deposit the remainder of the initial payment of Dwight. 75 By then,
Dwight had already passed away due to the multiple stab wounds he sustained on May
1, 2000. Loyola admitted that the delay in the deposit of the P1,615.25 cash was due to
its district office's immediate need for cash. 76

It is important to clarify that Loyola is an agent of ATR. In a contract of agency, "a

person binds himself to render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter."77 Therefore, a
planholder's payment made to Loyola has the same legal effect as payment made to
ATR, even if Loyola failed to immediately deposit the cash payment to its account.

In the case of Bank of the Philippine Islands v. Laingo,78 the Court held that the Bank of
the Philippine Islands (BPI) acted as agent of FGU Insurance with respect to the
insurance feature of its commercial product, a savings account which offered insurance
coverage for free for every deposit account opened. The controversy in Laingo involved
the alleged non-compliance with the requirement of submitting a written notice of
insurance claim to FGU Insurance within three calendar months from the death of the
insured. The beneficiary of the policy contended that BPI did not notify her of the
attached insurance policy yet allowed her to withdraw from the savings account after
the death of the insured. In ruling that it was incumbent upon BPI, as agent of FGU
Insurance, to give proper notice of the existence of the insurance coverage and the
stipulation in the insurance contract for filing a claim, the Court observed that the
account holder directly communicated with BPI as the agent of FGU Insurance. BPI
facilitated the processing of the deposit account, collection of necessary documents,
and the endorsement for the approval of the insurance coverage without any other
action on the part of the account holder. FGU Insurance did not interact directly with
the account holder and all communications were coursed through BPI. 79

While the facts and issue surrounding the case of Laingo is different from the case at
bar, the ruling of the Court still finds applications to the present case. The relationship
between BPI and FGU Insurance in the  Laingo case is similar to the arrangement
between Loyola and ATR in the present case. Loyola offered its Timeplan product with a
life insurance feature to entice customers to invest their money. Loyola secured Master
Policy No. GCL-878 from ATR to insure all of its future planholders. Customers who
intend to avail the Timeplan of Loyola do not transact with ATR and merely submit all
the requirements, including the payment of premiums, to Loyola. As such, it is apparent
that Loyola acted as agent of ATR with respect to the insurance feature of its Timeplan
product. The collective conduct of Loyola, as an agent of ATR, in accepting from Dwight
the initial payment, issuing the corresponding Official Receipt, 80 and delivering the pre-
signed Timeplan contract reveal that a contract of insurance was perfected. The acts of
Loyola, as an agent of ATR, binds the latter.

The effectivity of the Timeplan cannot be left to the will of Loyola and ATR. This
arrangement will leave Dwight in a helpless position where the implementation of the
contract is put on hold and made dependent upon the will of Loyola and ATR despite
having complied with his contractual obligations. Moreover, the Official
Receipt81 Gumiran issued to Dwight clearly states:

This Receipt is valid for down payment only. Checks and other similar forms shall be
valid only when cleared by the Bank.82 cralawlawlibrary

As far as Dwight is concerned, his payment to Gumiran is considered his payment to

Loyola and ATR for the initial monthly installment of the Timeplan even if the cash
portion of his payment was not immediately deposited to Loyola's account.

Furthermore, upon payment of the premium, Dwight was issued a copy of the Timeplan
contract that was pre-signed by Jesusa Puyat-Concepcion, President and Chief
Executive Officer of Loyola, and Francisco D. Cauilan, Area Manager of
Loyola.83 Dwight's receipt of the Timeplan contract, while he was in good health,
signifies that the contract was perfected. The delivery of the corresponding Timeplan
contract signifies the perfection of the contract between him and Loyola.

More importantly, it must be clarified that, while the first monthly installment due from
Dwight is P5,040.00, the insurance premium payable to ATR is only a fraction of said
installment payment. The breakdown of the cost allocation of the installment values
made on the plan of Dwight indicates that the insurance premium payable to ATR is
only P447.55. Pursuant to the Certification of Distribution of Monthly Installments 84 as
of April 28, 2000 Loyola issued, the breakdown of the initial payment is as follows:

Installment Amount 1st Month 5,040

      Filing fee       50.40
      Documentary stamp       252.00
      10% VAT       403.20
      Commission/ Overrides       2,166.66
      Collection fee       0.00
      Bonuses       140.11
       Other expenses (GAE)       504.00
      Insurance cost       447.55
      Trust fund deposit       1,008.00
      Total Expenses       4,971.92
      Remainder of Installment       68.0885

Here, it is readily apparent that the amount Loyola received from Dwight is more than
enough to cover the P447.55 insurance cost. The cash payment of P1,615.25 alone was
more than sufficient to pay for the insurance cost payable to ATR yet the employees of
Loyola opted to delay depositing it and used it for other purposes not intended by the
parties. The insurance coverage of Dwight should not be adversely affected by Loyola's
delay.

The cause of Dwight's death is a risk

covered by the Timeplan contract.

ATR argues that the cause of Dwight's death is an excluded risk because he was
murdered. The Exclusions Clause of Master Policy No. GCL-878 states:

No benefit shall be payable for any loss resulting from or caused directly or indirectly,
wholly or partially, by:
xxxx

10. Murder or provoked assault; or any attempt thereat; or

x x x x86 cralawlawlibrary

Noticeably, the records are bereft of any circumstance showing that the fatal stabbing
of Dwight is a product of the crime of murder. The Investigation Report of ATR states:

Since the coverage was only 3 days from the effective date, I went to Nueva Vizcaya to
have this case investigated. I found out, however, that the insured died actually on May
1, 2000 at about 2:30 in the morning. He was stabbed to death by his brother in
law Joemar Tallud after trying to pacify Joemar and his wife Angelita
quarelling (sic) over real property inheritances. A case was already filed against
Joemar Tallud at the Regional Trial Court in Bayombong, Nueva Vizcaya. 87 (Emphasis
supplied)

From the foregoing, it is clear that, though Dwight died as a result of stab wounds
inflicted by his brother-in-law Joemar Tallud (Joemar), nothing in the Investigation
Report suggests that he was murdered or that he died due to a provoked assault as
understood in criminal law. The act of Joemar cannot be equated to murder or provoked
assault without a final judgment from the court finding Joemar guilty beyond
reasonable doubt. The conclusion of ATR, unsupported by any competent evidence, fails
to persuade the Court that the cause of Dwight's death comes within the purview of the
exclusion clause of Master Policy No. GCL-878. Hence, ATR is not exempted from
liability.

Dwight's Timeplan contract entitles

him to the Group Creditors Life
Insurance and the Group Yearly Renewable Term Life benefits
obtained by Loyola.

The CA committed serious error in deleting the award of actual damages comprising the
insurance benefits from the Group Creditors Life Insurance amounting to P599.760.00
and Group Yearly Renewable Term Life amounting to P604,800.00. The evidence on
record and the pleadings submitted by ATR all show that Loyola obtained a Group
Creditors Life Insurance from ATR, with supplementary Group Yearly Renewable Term
Life and Accidental Death benefits, for its present and future planholders. 88

The cover page of Master Policy No. GCL-878, where the dry seal of GE Life and the
signature of its president & chief executive officer Eulogio A. Mendoza appear,
specifically states:

MASTER POLICY NO. : GCL-878

POLICYHOLDER/ : LOYOLA TIMEPLAN
CREDITOR
PLAN OF INSURANCE : GROUP CREDITORS LIFE INSURANCE
SUPPLEMENTARY : GROUP YEARLY RENEWABLE TERM LIFE
BENEFITS ACCIDENTAL DEATH BENEFIT
POLICY EFFECTIVE DATE : JUNE 15, 1999
PREMIUM DUE DATE : JUNE 15, 1999 & EVERY YEAR THEREAFTER
POLICY ANNIVERSARIES : JUNE 15, 2000 & EVERY YEAR
THEREAFTER89 (Emphasis supplied)

Master Policy No. GCL-878 enumerates the amount of insurance for each benefit as
follows:

AMOUNT OF INSURANCE
Group Creditorss Life - equal to the outstanding and unpaid balance of the
Insurance gross contract price.
Group Yearly Renewable - equal to the original amount of gross contract price.
Accidental Death Benefit - equal to the original amount of gross contract
price.90 [Emphasis and underscoring in the original]

Throughout the text of Master Policy No. GCL-878, the listed benefits have been
consistently mentioned and is deemed to cover all present and future eligible
planholders of Loyola.91 Even the Claims Committee Action Sheet reflecting ATR's denial
of Angelita's claim confirm that Master Policy No. GCL-878 includes said benefits. 92 ATR
never denied the inclusion of Dwight's Timeplan in Master Policy No. GCL-878. Thus,
the RTC was correct in including the proceeds from those benefits in computing the
award of actual damages in the amount of P1,809,360 in favor of Angelita computed as
follows:

  

Group P599.760.00
Creditors (outstanding
Life balance net of
Insurance the first
  installment
  paid)
Group 604,800.00
Yearly (the gross
Renewable contract price)
Term Life  
Accidental 604,800.00
Death (the gross
Benefit contract price)       
TOTAL P1,809,360.00

The CA committed error in deleting

the award of moral damages, exemplary damages,
and attorney's fees.

Moral Damages

The RTC awarded moral damages to Loyola and Angelita after finding that ATR acted in
bad faith in bringing a baseless suit against Loyola and Angelita. 93 However, the CA
deleted the award in its decision. The Court finds that an award of moral damages in
the amount of P50,000.00 is commensurate to the anxiety and inconvenience Angelita
suffered for ATR's callous treatment of her claim for death benefits. Indeed, ATR
reneged on its obligation to pay the proceeds from the policy Angelita is entitled to
receive and intentionally delayed the procedure to claim through its unsubstantiated
assertion that Dwight was murdered. It also did not escape the Court's attention that
ATR belatedly assailed the genuineness of the Timeplan application of Dwight 18
months after his death. For the Court, these acts collectively show the intention of ATR
to unduly prolong the process of claiming the benefits, thus justifying the award of
moral damages in favor of Angelita.

Exemplary Damages

Article 2232 of the Civil Code provides that in a contractual or quasi-contractual

relationship, exemplary damages may be awarded only if the defendant had acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner.94 Article 2234 of the
Civil Code further requires that, to be entitled to exemplary damages, the claimant
must show that he is entitled to moral, temperate, or compensatory damages. 95

ATR undertook to insure Loyola's planholders upon the fulfillment of any of the
instances enumerated in the "Date of Effectivity of Individual Insurance" clause of
Master Policy No. GCL-878. Considering that ATR refused to honor the insurance
coverage of Dwight's Timeplan, and unduly prolonged the procedure for claiming the
benefits under the policy, the Court finds that the award of exemplary damages in the
amount of P50,000.00 in favor of Angelita reasonable.

Attorney's Fees

The instances when attorney's fees may be awarded are enumerated in Article 2208 of
the Civil Code which reads:

Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
xxxx
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiffs plainly valid, just and demandable claim;
xxxx
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable. 96
cralawlawlibrary

The RTC was correct in awarding attorney's fees because exemplary damages were
awarded and due to the length of the proceedings. In addition, the Court finds the civil
action initiated by ATR unfounded and that its continued refusal to honor the insurance
claim of Angelita under Master Policy No. GCL-878 justifies the award of attorney's fees
in the amount of P50,000.00 in her favor.

Similarly, the Court finds that an award of attorney's fees in the amount of P50,000.00
in favor of Loyola and Angelita is proper due to the unfounded suit ATR filed against it
and the length of the proceedings.

Interest

Lastly, award of interest in accordance with the Court's ruling in the case
of Nacar v.  Gallery Frames97 is proper. In Nacar, the Court modified the imposable
interest rates on the basis of Bangko Sentral ng Pilipinas Monetary Board Circular No.
799, which took effect on July 1, 2013, thus:

xxxx

II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is imposed,
as follows:

1. When the obligation is breached, and it consists in the payment of a sum of

money, i.e., a loan or forbearance of money, the interest due should be that which may
have been stipulated in writing. Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 6% per annum to be computed from default,  i.e., from judicial or
extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an
interest on the amount of damages awarded may be imposed at the  discretion of the
court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established
with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin to run
only from the date the judgment of the court is made (at which time the quantification
of damages may be deemed to have been reasonably ascertained). The actual base for
the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 6%  per annum from such finality until its satisfaction,
this interim period being deemed to be by then an equivalent to a forbearance of credit.

And in addition to the above, judgments that have become final and executory prior to
July 1, 2013, shall not be disturbed and shall continue to be implemented applying the
rate of interest fixed therein.98 (Emphasis and italics in the original; citations omitted)

Applying the guidelines in Nacar to the present case, 12% interest rate per annum shall
be imposed on the principal amount due from the time of judicial demand, i.e., from
the time of the filing of the complaint, until June 30, 2013. Thereafter, from July 1,
2013, until full satisfaction of the monetary award, the interest rate shall be 6% per
annum.

WHEREFORE, premises considered, the Decision dated February 4, 2016 and the

Resolution dated November 17, 2016 of the Court of Appeals in CA-G.R. CV No. 97528
are MODIFIED. ATR Professional Life Insurance Corporation, now Asian Life and
General Assurance Corporation, is ORDERED to:

a. Pay Angelita Lumiqued actual damages in the amount of P1,809,360.00;

b. Pay Angelita Lumiqued moral damages in the amount of P50,000.00;
c. Pay Angelita Lumiqued exemplary damages in the amount of P50,000.00; and
d. Pay Loyola Plans Inc. and Angelita Lumiqued attorney's fees in the amount of
P50,000.00 each.

In addition, ATR Professional Life Insurance Corporation, now Asian Life and General
Assurance Corporation, is DIRECTED to pay interest of twelve percent (12%) per
annum on the monetary award computed from the time of the filing of the complaint
until June 30, 2013 and six percent (6%) per annum from July 1, 2013 until full
satisfaction thereof.

SO ORDERED.