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BANK OF PHILIPPINE ISLANDS v. YOLANDA LAINGO

FACTS:

In 1999, Rheozel Laingo opened a "Platinum 2-in-1 Savings and Insurance" account with Bank of the Philippine Islands (BPI). The account included an insurance policy with FGU Insurance Corporation. Rheozel died in September 2000, and his mother, Yolanda Laingo, instructed their personal secretary to inquire about the savings account to use the money for Rheozel's burial expenses. BPI accommodated Laingo's request and allowed her to withdraw P995,000 from Rheozel's account. Two years later, Rheozel's sister found the insurance certificate and Laingo subsequently requested BPI and FGU Insurance to process her claim as the beneficiary. FGU Insurance denied the claim, stating that it should have been filed within three months from Rheozel's death. Laingo filed a complaint against BPI and FGU Insurance. The trial court dismissed the case, ruling that the prescriptive period starts from the death of the insured. Laingo appealed, and the Court of Appeals reversed the ruling, holding that Laingo cannot be bound by the 90-day stipulation as she was not a party to the insurance contract. Petitioners filed a motion for reconsideration, which was denied. Hence, this petition. The main issue is whether Laingo is bound by the three-month deadline for filing the claim.

ISSUES:

  1. Whether the insurance contract is clear and unambiguous, leaving no room for construction.

  2. Whether the lack of knowledge of the insurance coverage by the beneficiary exempts her from complying with the deadline for filing an insurance claim.

RULING:

  1. The insurance contract is deemed ambiguous because it does not indicate how the beneficiary is to be informed of the three-month claim period, thus making it impossible for the beneficiary to fulfill the condition set forth in the contract. Therefore, it cannot be upheld that the contract is clear and unambiguous.

  2. The lack of knowledge of the insurance coverage by the beneficiary excuses her failure to file the notice of insurance claim within the specified period. The responsibility lies with the bank and insurance company for not notifying the beneficiary of the attached insurance policy.

PRINCIPLES:

  • An agency relationship is established when an agent acts on behalf of the principal, and the acts of the agent have the same legal effect and consequence as if the principal had been the one acting.

  • The agent is bound to carry out the agency and bears liability for damages caused by non-performance.

  • The agent must act in accordance with the instructions of the principal, and in the absence thereof, must act as a good father of a family would in similar circumstances.

  • The relationship between principal and agent is fiduciary, requiring trust and confidence, and the agent has a duty to act in good faith for the advancement of the principal's interests.

  • An agent has the duty to inform the beneficiary of the existence of an insurance contract and the accompanying terms and conditions of the insurance policy in order for the beneficiary to properly claim the benefit.

  • An insurance company has the duty to communicate with the beneficiary upon receipt of notice of the death of the insured.

  • Notice to the agent is notice to the principal.

  • Failure of the agent to notify the beneficiary of the existence of an insurance policy relieves the beneficiary of any burden of loss.