BPI vs. Posadas GR No.

34583, October 22, 1931 husband and the other half to the wife, exclusively; (2)if the premiums were
paid partly with paraphernal and partly conjugal funds, the proceeds are
FACTS: likewise in like proportion paraphernal in part and conjugal in part; and (3)the
proceeds of a life-insurance policy payable to the insured's estate as the
Rosario and Adolphe were married in January 1914. The wife was actually
beneficiary, if delivered to the testamentary administrator of the former as part
residing and living in Germany when Adolphe died in December 1927. The
of the assets of said estate under probate administration, are subject to the
latter while in Germany, executed a will in March 1926, pursuant with its law
inheritance tax according to the law on the matter, if they belong to the assured
wherein plaintiff was named his universal heir. The deceased possessed not
exclusively, and it is immaterial that the insured was domiciled in these Islands
only real property situated in the Philippines but also personal property
or outside.
consisting of shares of stocks in 19 domestic corporations. Included in the
personal property is a life insurance policy issued at Manila on January 1913
for the sum of $10,000 by the Sun Life Assurance Company of Canada,
Manila Branch. In the insurance policy, the estate of the deceased was Hence, the defendant was ordered to return to the plaintiff one-half of the tax
named the beneficiary without any qualification. collected upon the amount of P20,150, being the proceeds of the insurance
policy on the life of the late Adolphe Oscar Schuetze, after deducting the
The plaintiff-appellant, the Bank of the Philippine Islands, was appointed proportional part corresponding to the first premium.
administrator of the late Adolphe Oscar Schuetze's testamentary estate by an
order, entered by the Court of First Instance of Manila. The Sun Life
Assurance Company of Canada, whose main office is in Montreal,Canada,
paid Rosario Gelano Vda. de Schuetze upon her arrival at Manila, the sum of
P20,150, which was the amount of the insurance policy on the life of said
deceased, payable to the latter's estate. On the same date Rosario Gelano
Vda. de Schuetze delivered the money to said Bank of the Philippine Islands,
as administrator of the deceased's estate, which entered it in the inventory of
the testamentary estate, and then returned the money to said widow. The
appellee alleges that it is a fundamental principle that a life-insurance policy
belongs exclusively to the beneficiary upon the death of the person insured.

BPI, as administrator of the estate of deceased Adolphe Schuetze, appealed

to CFI Manila absolving defendant, Collector of Internal Revenue, from the
complaint filed against him in recovering the inheritance tax amounting to
P1209 paid by the plaintiff, Rosario Gelano Vda de Schuetze, under protest,
and sum of P20,150 representing the proceeds of the insurance policy of the
deceased. Notwithstanding various demands made by plaintiff, Posadas
refused to refund such amount.

ISSUE: WON the plaintiff is entitled to the proceeds of the insurance.

HELD:

SC ruled that(1)the proceeds of a life-insurance policy payable to the

insured's estate, on which the premiums were paid by the conjugal
partnership, constitute community property, and belong one-half to the