G.R. No. 54216 July 19, 1989
THE PHILIPPINE AMERICAN INSURANCE COMPANY, petitioner, vs. HONORABLE GREGORIO G. PINEDA in his capacity as Judge of the Court of First Instance of Rizal, and RODOLFO C. DIMAYUGA, respondents.

FACTS

On January 15, 1968, private respondent Rodolfo Dimayuga procured an ordinary life insurance policy from petitioner Philippine American Insurance Company. He designated his wife and children as irrevocable beneficiaries. The policy’s Beneficiary Designation Indorsement explicitly stated the designation was irrevocable and could not be surrendered, assigned, or amended without the consent of said beneficiaries. On February 22, 1980, Dimayuga filed a petition with the Court of First Instance of Rizal to amend the designation from irrevocable to revocable. The petitioner insurance company opposed the petition.
The respondent judge, Hon. Gregorio Pineda, granted Dimayuga’s petition in an Order dated March 19, 1980, allowing the change. The insurance company’s motion for reconsideration was denied on June 10, 1980. The insurer elevated the case to the Supreme Court, arguing the change required the beneficiaries’ consent, which was not validly obtained, as the wife was deceased and the children were all minors.

ISSUE

Whether the designation of irrevocable beneficiaries in a life insurance policy can be changed to revocable without the consent of all such beneficiaries.

RULING

The Supreme Court ruled in the negative, nullifying the respondent judge’s orders. The legal logic is anchored on the applicable Insurance Act (Act No. 2427) and the specific contractual terms. Under the law, an irrevocable beneficiary acquires a vested interest in the policy, which cannot be divested without his or her consent. This principle was affirmed in Gercio v. Sun Life and Go v. Redfern. The policy endorsement itself contractually bound the insured, prohibiting any change without the beneficiaries’ consent.
The Court rejected the lower court’s premise that it could authorize the change for a just and reasonable ground, holding that neither the law nor the contract provided for such an exception. The alleged acquiescence of the six minor children was legally ineffective, as minors cannot validly give consent. Furthermore, their father, the insured, could not act on their behalf due to a conflict of interest, as his desire to change the designation was adverse to their vested rights. The contract, containing all essential requisites and violating no law or public policy, constituted the binding law between the parties. By ordering the amendment, the lower court effectively made a new contract for the parties, an act in excess of its authority. Consequently, the change from irrevocable to revocable was invalid without the beneficiaries’ consent.