Sy v. Permanent Plans, Inc.

[SEC-SICD * CASE NO. 4395. April 25, 1996.] MARIBEL S. SY , plaintiff, vs . PERMANENT PLANS, INC. (Formerly: PERMANENT PENSION PLANS, INC.) , defendant . PERMANENT PLANS, INC. , third-party plaintiff, vs. EDUARDO S. MADRID, FLORENCIO ILANDAG, ADORACION M. CESAR, and Others, Inc. , third-party defendants . D E C I S I O N Plaintiff MARIBEL S. SY [MARIBEL for short] seeks to collect from the defendant Permanent Plans, Inc. [PPI for short] the sum of P1,950,000.00 based on MARIBEL'S claim that it represents the total proceeds of a pension plan with a subscribed maturity value of P500,000.00 which her deceased husband FRANCISCO T. SY [FRANCISCO for short] applied for and paid as quarterly premium the sum of P5,496.00 with his RCBC Check No. TC006799 dated August 14, 1990, payable to cash to PPI'S agent Third Party Defendant ADORACION M. CESAR [CESAR for short] as shown by Temporary Receipt No. 6226 of PPI issued by CESAR in the name of FRANCISCO on August 16, 1990, for the sum of P5,496.00. Defendant PPI denied any liability for plaintiff's action asserting that CESAR was not PPI's agent in 1990 and that PPI did not issue any pension plan in favor of FRANCISCO because PPI did not receive any application for a pension plan from, and did not receive any sum of money paid by, FRANCISCO, and claiming further under its Third Party Complaint that PPI and Third Party Defendant OTHERS INC. [OTHERS for short] entered into a General Agency Agreement whereby the former appointed the latter as its General Agent in Metro Manila and Leyte, and to accomplish and pursue the objectives of said agreement. Third Party Defendant EDUARDO S. MADRID [MADRID for short] obtained from defendant ten (10) booklets of Temporary Receipt bearing Nos. 6221 to 6230 and 6231 to 6240 for the exclusive use of third party defendant OTHERS and organized his branch office in Tacloban City through its Branch Manager Third Party Defendant FLORENCIO ILANDAG [ILANDAG for short] and therefore said Third Party Defendants MADRID, ILANDAG, CESAR and OTHERS should be held responsible for the consequences of the issuance of Temporary Receipt No. 6226 dated August 16, 1990 in the name of FRANCISCO and the receipt of the amount of P5,496.00 acknowledged in said receipt. Third Party Defendant MADRID denies liability for the claims of the plaintiff stating that he is no longer the President of OTHERS since February 8, 1991. Third Party Defendant CESAR denies any liability for plaintiff's complaint because she issued Temporary Receipt No. 6226 merely upon request of her sister ILANDAG without having seen FRANCISCO's RCBC Check No. TC006799 and without having received the sum of P5,496.00 which she wrote in the receipt. Third Party Defendants OTHERS and ILANDAG did not file their answer to the Third Party Complaint. Plaintiff MARIBEL testified that she had known CESAR for more than five (5) years prior to August ( illegible portion in SEC files ) 1990 because CESAR use to talk to MARIBEL when CESAR visits them in their house (T.s.n., Hearing of June 16, 1993, p. 9, and hearing of July 21, 1993, p. 10); that MARIBEL had know CESAR's occupation because CESAR told MARIBEL and her sister MARILOU UY SIA that she was the agent of PPI (T.s.n., Hearing of June 16, 1993, pp. 9 and 11) and CESAR showed MARIBEL an ID issued by PPI in CESAR's name (T.s.n., Hearing of July 21, 1993, pp. 10-12); that CESAR convinced her sister Marilou Uy Sia to buy the Pension Plan Agreement No. 90-08-2928 (Exhibit "J" of plaintiff) from PPI which insured the life of Marilou Uy Sia under and subject to the terms of the Group/Term Insurance Policy No. 0159 issued by FORTUNE LIFE & GENERAL INSURANCES CO., INC. (Exhibit "J-4" of plaintiff) and that MARIBEL was present on July 26, 1990 when CESAR convinced Marilou Uy Sia to buy a pension plan and issued Temporary Receipt No. 6223 on July 26, 1990 (T.s.n., pp. 17-18, Hearing of June 16, 1993). That on August 14, 1990, CESAR came to MARIBEL'S house and convinced her husband FRANCISCO to buy a pension plan (T.s.n., p. 22, Hearing of June 16, 1993): that CESAR told FRANCISCO that he "has to pay P5,496.00, 4 times a year, for fourteen (14) years" on a principal sum of P500,000.00 (T.s.n.. p. 24 Hearing of June 16, 1993); that her husband FRANCISCO filled up and signed the application form consisting of three (3) copies on August 14, 1990 (T.s.n., pp. 24-25, Hearing of June 16, 1993; p. 16, Hearing of July 21, 1993); that CESAR received the payment from FRANCISCO under RCBC Check No. TC006799 bearing the entries; "August 14, 1990, the word Cash, the figure P5,496.00 and words Five thousand Four Hundred Ninety Six only" which were written by MARIBEL herself upon request of FRANCISCO, including the words " Permanent Insurance " (T.s.n. pp. 27-29, Hearing of June 16, 1993, Exhibit "A"); that CESAR signed and issued in her presence Temporary Receipt No. 6226 bearing August 16, 1990 in the name of FRANCISCO (T.s.n., pp. 31-33, Hearing of June 16, 1993. Exhibit "B"); and that CESAR gave no copy of the filled up application (T.s.n. pp. 25-26, Hearing of June 16, 1993); and no policy was issued (T.s.n., p. 35, Hearing of June 16, 1993) to her husband FRANCISCO and that her husband FRANCISCO died on October 31, 1990 (T.s.n., p. 7, Hearing of June 16, 1993, Exhibit "C"). That after the death of her husband, MARIBEL discovered from her husband's wallet the receipt, Temporary Receipt No. 6226, Exhibit "B" (T.s.n. p. 64, Hearing of July 21, 1993); that MARIBEL told her mother about the receipt whereupon they consulted Atty. Edwin Y. Chua who wrote PPI on January 31, 1991, inquiring on the status of the pension plan of FRANCISCO to which PPI replied on March 5, 1991 through Atty. Cesar L. Villanueva, that PPI "have not issued, much less approved, any pension plan in favor or Mr. Francisco Sy" (T.s.n., pp. 38-42, Hearing of June 16, 1993, Exhibits "K" AND "L"); that then MARIBEL sought one Oliva Sawaan to make representation with the Securities and Exchange Commission [SEC] which wrote on June 8, 1992, through Director Eugenio E. Reyes a letter addressed to PPI (T.s.n., pp. 42-44, Hearing of June 16, 1993, Exhibit "E"); that PPI requested MARIBEL to submit certain requirements which the latter complied except the required application signed by FRANCISCO which was not submitted (T.s.n., pp. 47-55, Hearing of June 16, 1993); that on October 27, 1992, there was a conference held through the representatives of MARIBEL and PPI before Atty. Elizabeth G. Martin, Chief of the Securities Trading and Regulation Division of the SEC (Exhibit "G") which conference was reset to October 29, 1992 but on said date the conference was not held because MARIBEL'S representative cancelled it as they would not agree to any settlement if the amount is only up to P100,000.00 (T.s.n., pp. 13 & 15 Hearing of August 25, 1993; Exhibit "G"); that Federico Guelleno, uncle of MARIBEL, consulted Atty. Jabar B. Dimaampo of the law firm TINGA, FUENTES & ASSOCIATES who wrote PPI on January 12, 1993, demanding payment of the proceeds of FRANCISCO'S pension plan which PPI rejected in its letter of February 8, 1993, through its Conservation Manager, on the ground that PPI had not received any application, for any payment from FRANCISCO, and consequently, PPI had not issued any Plan Agreement in favor of FRANCISCO (T.s.n., pp. 68-69, Exhibits "2" and "2-A") and then MARIBEL filed personally her complaint prepared by Atty. Rey S. Acasio before consulting Atty. Elviro Q. Quintain (T.s.n., pp. 70-71, Hearing of July 21, 1993). Defendant PPI presented its evidence through the testimony of RONALD RICATO and CARLOS G. MUNAR who testified that PPI is a corporation organized and licensed as dealer in pre-need plans (T.s.n., pp. 7-9, Hearing of August 25, 1994, Exhibit "8"); that PPI had established 23 branches all over the Philippines (T.s.n., p. 10, Hearing of August 25, 1994); and that all applications for pension plans secured by advisors or agents in these branches are all brought to the Central Office in Metro Manila for processing and approval by the Processing Section of Division of PPI and there are no pension plans approved in the provinces (T.s.n., pp. 11-27-28, Hearing of August 25, 1994); That an application for a pension plan, undergoes first the underwriting requirements by the insurance company ( T.s.n., p. 7-8, Hearing of January 30, 1995); that after the insuring company approves the application, it is then processed by the Processing Section which finally approves the application if the papers are complete and the premium has been paid (T.s.n. p. 11 , Hearing of August 25, 1994.); that upon approval of the application, the Pension Plan Agreement is prepared for the signature of the Vice-President for Finance and final approval by the President of PPI (T.s.n., p. 8, Hearing of January 30, 1995); that the pension plan agreement is effective only upon its issuance by the signature of the President which is indicated on the plan and which is the same date the plan is issued (T.s.n., pp. 15-16, Hearing of August 25, 1994; p. 9, Hearing of January 30, 1995, Exhibits "10", "10-A" and "10-B"); and that the "Plan Agreement shall become valid and binding with the COMPANY only when its corporate Dry Seal is affixed on the left-lower portion of this Plan Agreement and the Contract Price has been CHECKWRITTEN on the left margin of the Plan Agreement (Exhibit "10-C"). That the foregoing procedure is confirmed by the pension plan agreement of Marilou Uy Sia which reveals (1) that on July 14, 1990, Marilou Uy Sia applied in Tacloban City for pension plan with a subscribed maturity value of P100,000.00 (Exhibit "3", Application Form No. 29595); (2) that Marilou Uy Sia paid the sum of P1,456.44 as her quarterly payment under Temporary Receipt No. 6223 dated July 26, 1990 (Exhibit "5") Temporary Receipt No. 6223); (3) that on August 3, 1990, Plan Agreement No. 90-08-2928 was issued in the name of Marilou Uy Sia (Exhibits "J", "J-1", "J-2" and "J-3" of plaintiff; Exhibit "10" of the defendant); (4) that on August 3, 1990, PPI issued its Official Receipt No. A8673 (Exhibit "J-6 of the plaintiff); (5) that the effectivity of Plan Agreement No. 90-08-2928 was August 3, 1990 (Exhibit "10-A", Effective dated, 03 August 1990); (6) that Group/Term Insurance Policy No. 0159, issued by Fortune Life & General Insurance Co., Inc. under Certificate No. 2928, which insures the life of Marilou Uy Sia was made effective also on August 3, 1990 (Exhibit "4", Group/Term Insurance Policy No. 0159); and (7) that the "PLAN Agreement shall become valid and binding with the COMPANY only when its corporate Seal is affixed on the left-lower portion of this Plan Agreement and the Contract Price has been CHECKWRITTEN on the left margin of the Plan Agreement" (Exhibit "10-C", bottom of Plan Agreement). LexLib That PPI and OTHERS entered into a General Agency Contract whereby PPI appointed OTHERS as its general agent in Manila and Leyte (T.s.n., pp. 30-31, Hearing of August 25, 1994, Exhibit "14" ); that OTHERS was able to procure five (5) plan holders, and one of them was Marilou Uy Sia (T.s.n., p. 14, Hearing of April 18, 1994); that the General Agency Contract between PPI and OTHERS was terminated in August, 1991 (T.s.n., p. 15, Hearing of January 30, 1995; Exhibits "15"); that all pension plan agreements approved and issued by PPI are reported monthly to the SEC (T.s.n., p. 12, Hearing of August 25, 1994); and that PPI reported to the SEC the plan agreement issued in favor of Marilou Uy Sia in its report for the month of August, 1990 (T.s.n., p. 13, Hearing of August 25, 1994, Exhibits "9" and "9-A"). That PPI suffered damages in the form of litigation expenses in total amount of P12,750.00 and P25,000.00 as and for attorney's fees as well as moral damages. Defendant also presented as part of its evidence the testimony of ILANDAG and CESAR. ILANDAG testified that it was on August 13, 1990, at around 6:00 P.M. when she, together with her sister CONSUELO S. MERCADO (CONSUELO for short) who was the agent for FRANCISCO (T.s.n., p. 18, Hearing of April 18, 1994) and her sister's fiancee DONAVAN CONSUNJI (CONSUNJI for short) who is a good friend of FRANCISCO, CONSUNJI being the Manager of Pambato Forwarders which hires the truck of "TATS TRUCKING", the trade name of the trucking business of FRANCISCO, (T.s.n., pp. 18-19, Hearing of April 18, 1994) went to the house of FRANCISCO for the purpose of convincing him to invest in a permanent pension plan (T.s.n., pp. 19-20, Hearing of April 18, 1994); that FRANCISCO filled up the application form and issued his RCBC Check No. TC006799 payable to cash on that same evening of August 13, 1990 because he does not keep cash in his house and instructed ILANDAG to "tell Consuelo and Donavan" to "just encash it tomorrow", August 14, 1990, which was the date of the check (T.s.n., pp. 20-21, Hearing of April 18, 1994); that ILANDAG received the filled up application and also the check of FRANCISCO but "during that night we did not issue any temporary to him" (T.s.n., p. 12, Hearing of April 18, 1994); that FRANCISCO applied for pension plan with a subscribed maturity value of P100,000.00 and the amount of P5,496.00 paid by FRANCISCO was the annual premium of P100,000.00 pension plan (T.s.n., p. 25, Hearing of April 18, 1994); and that on the said evening of August 13, 1990, when ILANDAG and her companions were conferring with FRANCISCO, MARIBEL was at a distance at the sala taking care of her child and was not even introduced to ILANDAG and her companions as FRANCISCO'S wife (T.s.n., p. 39, Hearing of April 18, 1994). That on the following day, CONSUELO encashed the check from the bank and gave the money to ILANDAG who paid CONSUELO her commission of 40% of the total amount (35% plus addition bonus of 5%) "since it was paid in cash for the whole annual period" (T.s.n., pp. 23-24, Hearing of April 18. 1994); that on August 16, 1990, ILANDAG requested her sister CESAR, as the designated cashier of OTHERS in Tacloban City, to issue Temporary Receipt No. 6226 in the name of FRANCISCO for the amount of P5,496.00 (T.s.n., p. 15, Hearing of April 12, 1994); and that CESAR gave the receipt she issued to her sister ILANDAG who gave it to the couple CONSUELO and CONSUNJI who handed the receipt to FRANCISCO (T.s.n., pp. 27-28, 48, Hearing of April 18, 1994). That ILANDAG mailed VIA AIR MAIL the application of FRANCISCO with a covering letter addressed to MADRID of OTHERS at its office in Makati, Metro Manila, but up to the time of the death of FRANCISCO on October 31, 1990 the application did not reach MADRID (T.s.n., pp. 28-30, Hearing of April 18, 1994); that ILANDAG did not remit to MADRID the money she received out of what FRANCISCO paid but she kept it to herself (T.s.n., pp. 51, 55, 56, Hearing of April 18, 1994); that ILANDAG, together with her husband and baby, came to Manila after the death of FRANCISCO after all souls day purposely to follow-up the application of FRANCISCO but Madrid informed Ilandag that the application of Francisco did not reach OTHERS and so MADRID instructed ILANDAG to refund the amount paid to MARIBEL who refused to accept the refund because of the advise of her uncle FEDERICO GUILLENO (T.s.n., pp. 30, 34, 37-38, Hearing of April 18, 1994). That ILANDAG closed the branch office of OTHERS in Tacloban City and transferred her residence to Manila in February, 1991 (T.s.n., p. 34, Hearing of April 18, 1994); that ILANDAG lost six big boxes at the pier when they arrived in Manila and all her personal effects and all the documents of Permanent Pension Plans were intact there (T.s.n., pp. 48-49, Hearing of April 18, 1994); that MARIBEL'S mother together with her uncle, a woman and a daughter came to ILANDAG'S residence in Cubao, Quezon City and requested ILANDAG to issue a certification that FRANCISCO was officially insured which ILANDAG did not issue because "first of all there was no insurance to speak of and second he (FRANCISCO) was not given any approved pension plan" (T.s.n., p. 35-36, Hearing of April 18, 1994); that when ILANDAG went to Tacloban in September, 1992, her sister CESAR requested her to call up MARIBEL because she came to CESAR and asked her to be a witness and requested her to issue a certification (T.s.n., p. 37, Hearing of April 18, 1994); and that ILANDAG called up MARIBEL and asked her to just accept the offer to refund the money but MARIBEL refused and told her again that it was the desire of her uncle (T.s.n., p. 38, Hearing of April 18, 1994); that later on a certain Mrs. Basilan came on an errand sent by MARIBEL to request ILANDAG to issue a certification "that. Francisco is officially insured with Permanent Pension Plans" but ILANDAG replied "that I cannot give her the certification that she wanted because first of all there is no insurance to speak of. Second, he was not given any Pension Plan by the Permanent Pension Plan . . . (T.s.n., pp. 40-41, Hearing of April 18, 1994). CESAR testified that she is the sister of ILANDAG who was the Branch Manager of OTHERS in Tacloban City (Par. 4.1, Exhibit "6", affirmed by CESAR, t.s.n. p. 13, Hearing of April 12, 1994), and who designated CESAR as Cashier of OTHERS at its Branch Office in Tacloban City (T.s.n., p. 20, Hearing of April 12, 1994); that CESAR received, and signed Temporary Receipt No. 6223 acknowledging, the payment made by Marilou Uy Sia on July 26, 1990 at the office of OTHERS (T.s.n., pp. 28-30, hearing of April 12, 1994); that ILANDAG operates a trading business under the firm name and style of "Northpoint Trading" with address at corner Veternos and del Pilar Streets, Tacloban City, where OTHERS established its branch agency (Par. 4.2, Exhibit "6-A", affirmed by CESAR, t.s.n. p. 13, Hearing of April 12, 1994); that CESAR applied for, and was authorized as, the Cashier of OTHERS in Tacloban City (Par. 4.5, Exhibit "6-A", affirmed by CESAR, t.s.n. p. 13, Hearing of April 12, 1994); that since her designation as Cashier of OTHERS, CESAR's sister ILANDAG and CONSUELO, who are agents of OTHERS, requested her to issue Temporary Receipt of PPI when they received money from their customers for a pension plan of PPI (Par. 4.6, Exhibit "6-A", affirmed by CESAR, t.s.n., p. 13, Hearing of April 12, 1994); that CESAR signed Temporary Receipt No. 6226 when her sister ILANDAG requested her to do so but CESAR did not actually receive the money paid, nor did CESAR see any application form of PPI accomplished, by FRANCISCO that is why CESAR did not indicate the application number nor the kind of payment, whether in check or in cash, that was made (Par. 4.7, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994). That CESAR had not met personally FRANCISCO and his wife MARIBEL during FRANCISCO'S lifetime because the first time CESAR met MARIBEL is already sometime in 1992 when MARIBEL came to CESAR'S house together with other companions to tell CESAR that she was included in a case because she signed a receipt (Par. 4.8, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994); that CESAR does not know MARIBEL'S house and have never visited MARIBEL at her house (T.s.n., pp. 14-15, Hearing of April 12, 1994); that CESAR was not the agent of OTHERS nor of PPI in 1990 and 1991 because CESAR applied as agent, and became an agent, of PPI only in September 1992; that CESAR was never able to secure any subscriber to any of the plans of PPI and CESAR never received her corresponding Identification Card from PPI (Par. 4.9, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994); that CESAR was not the advisor or agent who persuaded FRANCISCO to subscribe to pension plan of PPI through OTHERS for it was her sisters, ILANDAG and CONSUELO and CONSUNJI who went to the house of FRANCISCO (Par. 4.10, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994); that CESAR knows that no pension plan was ever issued in favor of FRANCISCO because his application, if he ever accomplished one, was missing and could not traced (Par. 4.11, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994); and that CESAR did not receive the amount of P5,496.00 reflected under Temporary Receipt No. 6226 dated August 16, 1990, because the same was previously received by ILANDAG and CONSUELO (Par. 4.12, Exhibit "6-A", which CESAR affirmed, t.s.n. p. 13, Hearing of April 12, 1994). LibLex Third Party Defendant MADRID testified in his own defense that in April and May, 1990, the group of one Mr. Joseph Hamon and MADRID himself organized and incorporated OTHERS as an agency for pre-need plans with MADRID as President (T.s.n., pp. 13-16, Hearing of September 11, 1995); that in June, 1990, PPI and OTHERS entered into a General Agency Agreement whereby the former appointed the latter as the former's General Agent for Metro Manila and Leyte subject to the terms and conditions of the agreement (T.s.n., pp. 28-29, Hearing of August 25, 1995; pp. 11-12, Hearing of January 30, 1995; pp. 38-39, Hearing of September 11, 1995); that the said agreement was signed by MADRID as President of OTHERS and by JUAN MIGUEL M. VASQUEZ as President of PPI; that as part of the plan ILANDAG organize at Tacloban City the Branch Office of OTHERS on the portion of her store (T.s.n., pp. 9, 12-13, Hearing of April 18, 1994); that OTHERS procured five (5) plan holders (T.s.n., p. 35, Hearing of September 11, 1995); that MADRID does not know of any communication from ILANDAG regarding a sale of pension plan with FRANCISCO; and that MADRID had no knowledge of any pension plan issued by PPI in favor of FRANCISCO. From the foregoing facts, this Hearing Officer is not impressed with the claim of the plaintiff. Firstly, MARIBEL tried to prove that CESAR is the agent of PPI when she issued on August 16, 1990 Temporary Receipt No. 6226 in the name of her deceased husband FRANCISCO, and on July 26, 1990 Temporary Receipt No. 6223 in the name of her sister Marilou Uy Sia. However, her story was destroyed by an overwhelming avalanche of contradictory evidence. Thus ILANDAG and CESAR testified that the latter was not an agent of PPI in 1990 because CESAR was then merely the designated cashier of OTHERS in Tacloban City. RONALD RICATO also negated plaintiff's story when he testified that CESAR became agent of PPI only on September 19, 1992, which is more than two (2) years after August 16, 1990. These testimonies of ILANDAG, CESAR and RONALD RICATO are corroborated by the alphabetical listing of all agents of PPI (Exhibit "12") since the start of its operation which shows that CESAR was an agent of PPI (Exhibit "12-A" and "12-A1") effective only on September 19, 1992 [9-19-92] and whose appointment was terminated on December 4, 1992 [12-04-92] (Exhibit "12-A-2"), and by the Personal Information Sheet (Exhibit "13") of CESAR which she accomplished on September 19, 1992, (Exhibit "13-A"), when she applied as an agent of PPI, and paid under Official Receipt No. 56914 (Exhibit "12-C") her license fee as agent. Moreover the agent who persuaded FRANCISCO to buy a pension plan was CONSUELO who was paid her 40% commission after she encashed the check on August 14, 1990. Finally, CESAR could not have been the agent who convinced FRANCISCO to buy a pension plan because CESAR had never met FRANCISCO during his lifetime and does not know the house of FRANCISCO, and has not visited FRANCISCO at his house. Secondly, MARIBEL adopted August 14, 1990, date of RCBC Check No. TC006799, as the basis of her story that CESAR came to convince FRANCISCO on August 14, 1990, to buy a pension plan. However, MARIBEL had no explanation why the Temporary Receipt signed by CESAR was dated two (2) days after on August 16, 1990, when the check showed that it was encashed with the bank on the same date on August 14, 1990. MARIBEL'S story is indeed her own concoction as it is negated by the testimony of ILANDAG that it was she, together with her sister CONSUELO and CONSUNJI, who went to the house of FRANCISCO in the evening of August 13, 1990 to convince FRANCISCO to buy a pension plan, a more credible version considering that FRANCISCO was a businessman who had his office and business to attend to during the day and could be found at his house only in the evening. Thirdly, MARIBEL claims that FRANCISCO subscribed to a pension plan with a subscribed maturity value of P500,000.00, MARIBEL testifying that CESAR told her that FRANCISCO "has to pay P5,496.00 for every quarter, 4 times a year for fourteen (14) years". This claim is not only negated by the testimony of ILANDAG who testified that P5,496.00 is an annual payment for a pension plan with a subscribed maturity value of P100,000.00 but it is also contradicted by the price list (Exhibits "4", "4-A" and "4-A-1") which shows that the amount of P5,496.00 is an annual premium for a P100,000.00 pension plan. In addition, MARIBEL's own testimony destroyed her story when she stated that her claim regarding the maturity value of her deceased husband FRANCISCO'S pension plan was merely estimated upon the basis of the Plan Agreement of her sister Marilou Uy Sia by multiplying the sum of P5,496.00 by four because her sister's Plan Agreement was paid quarterly (T.s.n., pp. 48-50, T.s.n., Hearing of July 21, 1993). Fourthly, MARIBEL claims that she had known CESAR for five (5) years prior to August, 1990 and that CESAR used to talk to them when CESAR visits FRANCISCO and MARIBEL in their house. However, CESAR denies having know FRANCISCO and his wife MARIBEL during the lifetime of FRANCISCO and CESAR denies having visited FRANCISCO and MARIBEL in the latter's house. CESAR testifying that she does not know the house of FRANCISCO and MARIBEL and that CESAR had not gone to their house and that the first time CESAR met MARIBEL was sometime in 1992 when MARIBEL came to CESAR'S house, together with her mother, uncle and another woman, and told her that she is included in the case because she signed a receipt. Even without considering the testimony of MARIBEL as a mere fabrication, still MARIBEL'S claim cannot prosper because no pension plan agreement was ever issued by PPI in favor of FRANCISCO as the evidence show that the application for a pension plan accomplished by FRANCISCO and his payment did not reach MADRID of OTHERS which should have transmitted them to PPI for its processing, approval and the issuance of the pension plan agreement because the alleged application was lost in transit, and the amount paid by FRANCISCO was not remitted to PPI. There is no evidence showing that a plan agreement was ever issued by PPI in favor of FRANCISCO. The rights and obligation of the parties under a pension plan agreement is governed and defined by the terms and conditions of the plan agreement. Obligations arising from contracts have the force of law between the parties and should be complied with in good faith (Article 1159, Civil Code of the Philippines). "A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service" (Article 1305, Civil Code of the Philippines, Alcantara vs. Alinea, G.R. No. L-3227, March 22, 1907, 8 Phil. 111). There having been no pension plan agreement issued by PPI in favor of FRANCISCO, there is therefore no contract between PPI and FRANCISCO, and MARIBEL, as the wife of the deceased FRANCISCO, has no right to claim any benefits, and PPI has no obligation to satisfy any claim, under any pension plan. Plaintiff MARIBEL anchors her claim on her belief that CESAR was an agent of PPI who was authorized to bind PPI and considers the application accomplished by FRANCISCO and the receipt issued by CESAR as constituting a binding slip or a cover note which will consider PPI as an insurance company (1) when she testified that she wrote "Permanent Insurance" at the left hand bottom of RCBC Check No. TC006799 (T.s.n., pp. 38-39, Hearing of June 16, 1993), (2) When MARIBEL'S mother and uncle when to visit ILANDAG at her residence in Cubao, Quezon City and asked ILANDAG for a certification that FRANCISCO was officially insured (T.s.n., pp. 35-36, Hearing of April 18, 1990); and (3) when MARIBEL sent one Mrs. Basilan to ILANDAG at Tacloban City to ask her to issue a certification that FRANCISCO was officially insured (T.s.n., pp. 40-41, Hearing of April 18, 1994). Plaintiff's position or theory, however, could not be given any serious consideration because in the first place, PPI is not an insurance company; secondly, it has been show heretofore that CESAR was not an agent of PPI when she issued Temporary Receipt No. 6226; thirdly, the application for a pension plan and the payment of its initial installment of the contract price cannot be considered as binding slip or cover note under the provisions of the Insurance Code, and fourthly, even granting, arguendo, that FRANCISCO'S application and payment may be considered a binding slip or a cover note under insurance parlance, a binding slip or binder does not insure of itself (De Lim vs. Sun Life Assurance Co., G.R. No. 15774, November 29, 1920, 41 Phil. 263). And when properly executed, a binding slip or cover note protects the applicant for insurance against the contingent of sickness intervening between its date and the delivery of the policy, if the application is accepted and if the latter is not accepted, or is refused, in the valid exercise of the company's right. the binding slip ceases to have any effect (I Joyce On Insurance; Summit Guaranty vs. Yabut 48326-R Dec. 17, 1979). It is therefore clear that the application and the Temporary Receipt did not produce any effect because PPI did not accept the application of FRANCISCO since PPI never received it and had no opportunity to accept it. The binding slip or cover note is merely a written memorandum of the most important terms of a preliminary contract of insurance and is valid and binding for a period not exceeding sixty days, renewable or extendable upon approval of the Insurance Commission (Section 52, Insurance Code). And considering that the application was accomplished and the Temporary Receipt No. 6226 was issued on or about August 14, 1990, the sixty-day period expired on October 13, 1990 and therefore no binding slip or a cover note was still valid on October 31, 1990 when FRANCISCO died. WHEREFORE, premises considered the above-entitled case is hereby dismissed. The Third Party Complaint as well as the counterclaim and cross claim of third party defendant and cross claimant EDUARDO S. MADRID are likewise dismissed for lack of merit. llcd There is no pronouncement as to the disposition of the sum of P5,496.00 for lack of any claim for refund or any other claim regarding the said sum. SO ORDERED. (SGD.) ELPIDIO S. SALGADO Hearing Officer