G.R. No. 181132 , June 5, 2009
HEIRS OF LORETO C. MARAMAG, represented by surviving spouse VICENTA PANGILINAN MARAMAG, Petitioners, vs. EVA VERNA DE GUZMAN MARAMAG, ODESSA DE GUZMAN MARAMAG, KARL BRIAN DE GUZMAN MARAMAG, TRISHA ANGELIE MARAMAG, THE INSULAR LIFE ASSURANCE COMPANY, LTD., and GREAT PACIFIC LIFE ASSURANCE CORPORATION, Respondents.

FACTS

Petitioners, the legitimate wife and children of the deceased Loreto C. Maramag, filed a petition with the Regional Trial Court (RTC) for revocation and/or reduction of insurance proceeds from policies with Insular Life and Grepalife. They alleged that respondent Eva was Loreto’s concubine and a suspect in his killing, thus disqualified from receiving proceeds. They further contended that the illegitimate children (Odessa, Karl Brian, and Trisha Angelie) were entitled only to one-half of the legitime of legitimate children, making the proceeds inofficious and subject to reduction to protect the petitioners’ legitimes. Insular Life admitted Loreto misrepresented Eva as his legitimate wife and the children as legitimate, and upon discovering this, disqualified Eva as a beneficiary and divided the proceeds among the three children. It released Odessa’s share and withheld the minors’ shares pending guardianship. Grepalife alleged Eva was not a designated beneficiary and had denied the claims of the children due to a misrepresentation in Loreto’s application regarding his age. The RTC initially dismissed the case against the three illegitimate children, ruling the insurance proceeds belonged exclusively to the named beneficiaries under the Insurance Code, and that the rules on donations or testamentary succession did not apply. However, it allowed the case to proceed against Eva, Insular, and Grepalife, citing Article 739 of the Civil Code which voids donations to a concubine. Upon motions for reconsideration, the RTC dismissed the entire case, ruling that where the designated beneficiaries (the illegitimate children) are not disqualified, the proceeds belong to them exclusively and not to the estate, and thus petitioners had no cause of action. Petitioners appealed to the Court of Appeals (CA), which dismissed the appeal for lack of jurisdiction, holding that the RTC’s order was a final dismissal, and petitioners should have filed a petition for review under Rule 41, not an ordinary appeal.

ISSUE

Whether the Court of Appeals correctly dismissed the petitioners’ appeal for lack of jurisdiction.

RULING

No, the Court of Appeals erred in dismissing the appeal. The Supreme Court held that the RTC’s order of dismissal was not a final judgment but an interlocutory order. An order dismissing a complaint for failure to state a cause of action is final if it denies the plaintiff’s cause of action and concludes the proceedings. However, in this case, the RTC’s dismissal was based on its determination that, given the facts and the law (particularly Section 53 of the Insurance Code), the petitioners had no cause of action against any of the respondents. This was a final adjudication on the merits, terminating the case. Therefore, it was a final order appealable via an ordinary appeal under Rule 41 of the Rules of Court. The petitioners correctly filed a notice of appeal. The CA should not have dismissed the appeal and instead should have resolved it on its merits. The Supreme Court thus remanded the case to the CA for proper proceedings.