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PACIFIC VS CA

Facts: An open Fire Policy issued to Paramount Shirt


Manufacturing for Php61,000 on the following: stocks,
materils, supplies, furniture, fixture, machinery, equipment
contained on the 1st to 3rd floors. Insurance is for a year
starting 21 OCTOBER 1964.

Paramount Shirt is debtor of Pacific Banking amounting to
Php800,000. Goods in policy were held in trust by
Paramount for Pacific under thrust receipts. Fire broke out
on 4 January 1964.

Pacific sent letter of demand to Oriental. Insurance
Adjuster of Oriental notified Pacific to submit proof of loss
pursuant to Policy Condition 11. Pacific did not accede but
asked Insurance Adjuster to verify records form Bureau of
Customs.

Pacific filed for sum of money against Oriental. Oriental
alleged that Pacific prematurely filed a suit, for neither
filing a formal claim over loss pursuant to policy nor
submitting any proof of loss.

Trial court decided in favor of Pacific. Decision based on
technicality. The defense of lack of proof of loss and
defects were raised for the 1st time. (On presentation of
evidences by Pacific, it was revealed there was violation of
Condition No.3, there were undeclared co-insurances
under same property Wellington, Empire, Asian. The only
declared co-insurances were Malayan, South Sea, and
Victory)

CA reversed decision. Concealment of other co-
insurances is a misrepresentation and can easily be
fraud.

Issues:
(1) Whether or not unrevealed con-insurances is a
violation of Policy Condition No.3

(2) Whether or not there was premature filing of action

Held:
(1) Yes. Policy Condition 3 provides that the insured must
give notice of any insurance already in effect or
subsequently be in effect covering same property being
insured. Failure to do so, the policy shall be forfeited.

Failure to reveal before the loss of the 3 other insurances
is a clear misrepresentation or a false declaration. The
material fact was asked for but was not revealed.
Representations of facts are the foundations of the
contract. Pacific itself provided for the evidences in trial
court that proved existence of misrepresentation.

(2) Yes. Policy Condition 11 is a sine qua non requirement
for maintaining action. It requires that documents
necessary to prove and estimate the loss should be
included with notice of loss. Pacific failed to submit formal
claim of loss with supporting documents but shifted the
burden to the insurance company. Failing to submit claim
is failure for insurance company to reject claim. Thus, a
lack of cause of action to file suit.

Furthermore, the mortgage clause in the policy specifically
provides that the policy is invalidated by reasons of
FRAUD, MISREPRESENTATION and FRAUD.
Concealment can easily be fraud or misrepresentation.

The insured PARAMOUNT is not entitled to proceeds.
Moreso, Pacific as indorsee of policy is not entitled.

FORTUNE VS CA

Facts: On June 29, 1987, Producers Bank of the
Philippines armored vehicle was robbed, in transit, of
seven hundred twenty-five thousand pesos (Php
725,000.00) that it was transferring from its branch in
Pasay to its main branch in Makati. To mitigate their loss,
they claim the amount from their insurer, namely Fortune
Insurance and Surety Co..

Fortune Insurance, however, assails that the general
exemption clause in the Casualty Insurance coverage had
a general exemption clause, to wit:

GENERAL EXCEPTIONS

The company shall not be liable under this policy in
respect of

xxx xxx xxx

(b) any loss caused by any dishonest, fraudulent or
criminal act of the insured or any officer, employee,
partner, director, trustee or authorized representative of
the Insured whether acting alone or in conjunction with
others. . . .

And, since the driver (Magalong) and security guard
(Atiga) of the armored vehicle were charged with three
others as liable for the robbery, Fortune denies Producers
Bank of its insurance claim.

The trial court and the court appeals ruled in favor of
recovery, hence, the case at bar.

Issue: Whether recovery is precluded under the general
exemption clause.

Held: Yes, recovery is precluded under the general
exemption clause.

Howsoever viewed, Producers entrusted the three with the
specific duty to safely transfer the money to its head office,
with Alampay to be responsible for its custody in transit;
Magalong to drive the armored vehicle which would carry
the money; and Atiga to provide the needed security for
the money, the vehicle, and his two other companions. In
short, for these particular tasks, the three acted as agents
of Producers. A "representative" is defined as one who
represents or stands in the place of another; one who
represents others or another in a special capacity, as an
agent, and is interchangeable with "agent." 23

In view of the foregoing, Fortune is exempt from liability
under the general exceptions clause of the insurance
policy.

Geagonia v CA G.R. No. 114427 February 6, 1995
Facts:
Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00.
The 1 year policy and covered thestock trading of dry goods.
The policy noted the requirement that
"3. The insured shall give notice to the Company of any insurance or insurances already effected, or
which may subsequently be effected, covering any of the property or properties consisting of stocks
in trade, goods in process and/or inventories only hereby insured, and unless notice be given and
the particulars of such insurance or insurances be stated therein or endorsed in this policy pursuant
to Section 50 of the Insurance Code, by or on behalf of the Company before the occurrence of any
loss or damage, all benefits under this policy shall be deemed forfeited, provided however, that this
condition shall not apply when the total insurance or insurances in force at the time of the loss or
damage is not more than P200,000.00."
The petitioners stocks were destroyed by fire. He then filed a claim which was subsequently denied
because the petitioners stocks were covered by two other fire insurance policies for Php 200,000
issued by PFIC. The basis of the private respondent's denial was the petitioner's alleged violation of
Condition 3 of the policy.
Geagonia then filed a complaint against the private respondent in the Insurance Commission for the
recovery of P100,000.00 under fire insurance policy and damages. He claimed that he knew the
existence of the other two policies. But, he said that he had no knowledge of the provision in the
private respondent's policy requiring him to inform it of the prior policies and this requirement was
not mentioned to him by the private respondent's agent.
The Insurance Commission found that the petitioner did not violate Condition 3 as he had no
knowledge of the existence of the two fire insurance policies obtained from the PFIC; that it was
Cebu Tesing Textiles w/c procured the PFIC policies w/o informing him or securing his consent; and
that Cebu Tesing Textile, as his creditor, had insurable interest on the stocks.
The Insurance Commission then ordered the respondent company to pay complainant the sum of
P100,000.00 with interest and attorneys fees.
CA reversed the decision of the Insurance Commission because it found that the petitioner knew of
the existence of the two other policies issued by the PFIC.

Issues:
1. WON the petitioner had not disclosed the two insurance policies when he obtained the fire
insurance and thereby violated Condition 3 of the policy.
2. WON he is prohibited from recovering

Held: Yes. No. Petition Granted

Ratio:
1. The court agreed with the CA that the petitioner knew of the prior policies issued by the PFIC. His
letter of 18 January 1991 to the private respondent conclusively proves this knowledge. His
testimony to the contrary before the Insurance Commissioner and which the latter relied upon cannot
prevail over a written admission made ante litem motam. It was, indeed, incredible that he did not
know about the prior policies since these policies were not new or original.
2. Stated differently, provisions, conditions or exceptions in policies which tend to work a forfeiture of
insurance policies should be construed most strictly against those for whose benefits they are
inserted, and most favorably toward those against whom they are intended to operate.
With these principles in mind, Condition 3 of the subject policy is not totally free from ambiguity and
must be meticulously analyzed. Such analysis leads us to conclude that (a) the prohibition applies
only to double insurance, and (b) the nullity of the policy shall only be to the extent exceeding
P200,000.00 of the total policies obtained.
Furthermore, by stating within Condition 3 itself that such condition shall not apply if the total
insurance in force at the time of loss does not exceed P200,000.00, the private respondent was
amenable to assume a co-insurer's liability up to a loss not exceeding P200,000.00. What it had in
mind was to discourage over-insurance. Indeed, the rationale behind the incorporation of "other
insurance" clause in fire policies is to prevent over-insurance and thus avert the perpetration of
fraud. When a property owner obtains insurance policies from two or more insurers in a total amount
that exceeds the property's value, the insured may have an inducement to destroy the property for
the purpose of collecting the insurance. The public as well as the insurer is interested in preventing a
situation in which a fire would be profitable to the insured.


Edillon v Manila Bankers Life G.R. No. L-34200
September 30, 1982
J. Vasquez

Facts:
Carmen O, Lapuz applied with Manila Bankers for insurance coverage against accident and injuries.
She gave the date of her birth as July 11, 1904. She paid the sum of P20.00 representing the
premium for which she was issued the corresponding receipt. The policy was to be effective for 90
days.
During the effectivity, Carmen O. Lapuz died in a vehicular accident in the North Diversion Road.
Petitioner Regina L. Edillon, a sister of the insured and the beneficiary in the policy, filed her claim
for the proceeds of the insurance. Her claim having been denied, Regina L. Edillon instituted this
action in the trial court.
The insurance corporation relies on a provision contained in the contract excluding its liability to pay
claims under the policy in behalf of "persons who are under the age of sixteen (16) years of age or
over the age of sixty (60) years" They pointed out that the insured was over sixty (60) years of age
when she applied for the insurance coverage, hence the policy became void.
The trial court dismissed the complaint and ordered edillon to pay P1000. The reason was that a
policy of insurance being a contract of adhesion, it was the duty of the insured to know the terms
of the contract he or she is entering into.
The insured could not have been qualified under the conditions stated in said contract and should
have asked for a refund of the premium.

Issue:
Whether or not the acceptance by the insurance corporation of the premium and the issuance of the
corresponding certificate of insurance should be deemed a waiver of the exclusionary condition of
coverage stated in the policy.

Held: Yes. Petition granted.

Ratio:
The age of Lapuz was not concealed to the insurance company. Her application clearly indicated her
age of the time of filing the same to be almost 65 years of age. Despite such information which could
hardly be overlooked, the insurance corporation received her payment of premium and issued the
corresponding certificate of insurance without question.
There was sufficient time for the private respondent to process the application and to notice that the
applicant was over 60 years of age and cancel the policy.
Under the circumstances, the insurance corporation is already deemed in estoppel. It inaction to
revoke the policy despite a departure from the exclusionary condition contained in the said policy
constituted a waiver of such condition, similar to Que Chee Gan vs. Law Union Insurance.
The insurance company was aware, even before the policies were issued, that in the
premisesinsured there were only two fire hydrants contrary to the requirements of the warranty in
question.
It is usually held that where the insurer, at the time of the issuance of a policy of insurance, has
knowledge of existing facts which, if insisted on, would invalidate the contract from its very inception,
such knowledge constitutes a waiver of conditions in the contract inconsistent with the known facts,
and the insurer is stopped thereafter from asserting the breach of such conditions.
To allow a company to accept one's money for a policy of insurance which it then knows to be void
and of no effect, though it knows as it must, that the assured believes it to be valid and binding, is so
contrary to the dictates of honesty and fair dealing.
Capital Insurance & Surety Co., Inc. vs. - involved a violation of the provision of the policy requiring
the payment of premiums before the insurance shall become effective. The company issued the
policy upon the execution of a promissory note for the payment of the premium. A check given
subsequent by the insured as partial payment of the premium was dishonored for lack of funds.
Despite such deviation from the terms of the policy, the insurer was held liable.
... is that although one of conditions of an insurance policy is that "it shall not be valid or binding
until the first premium is paid", if it is silent as to the mode of payment, promissory notes received by
the company must be deemed to have been accepted in payment of the premium. In other words, a
requirement for the payment of the first or initial premium in advance or actual cash may be waived
by acceptance of a promissory note...
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Velasco v Apostol G.R. No. L-44588 May 9, 1989
Harding v Commerical Union August 10, 1918 G.R. No. L-12707
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Labels: digests, Insurance, Law
Sunlife v CA G.R. No. 105135 June 22, 1995
J. Quiason

Facts:
Robert John B. Bacani procured a life insurance contract for himself from Sunlife. He was issued a
policy for P100,000.00, with double indemnity in case of accidental death. The
designatedbeneficiary was his mother, Bernarda Bacani.
The insured died in a plane crash. Respondent Bernarda Bacani filed a claim with petitioner, seeking
the benefits of the insurance policy taken by her son. Petitioner conducted an investigation and its
findings prompted it to reject the claim.
Sunlife informed Bacani that the insured did not disclose material facts relevant to the issuance of
the policy, thus rendering the contract of insurance voidable. A check representing the total
premiums paid in the amount of P10,172.00 was attached to said letter.
Petitioner claimed that the insured gave false statements in his application. The deceased answered
claimed that he consulted a Dr. Raymundo of the Chinese General Hospital for cough and flu
complications. The other questions were answered in the negative.
Petitioner discovered that two weeks prior to his application for insurance, the insured was examined
and confined at the Lung Center of the Philippines, where he was diagnosed for renal failure. During
his confinement, the deceased was subjected to urinalysis tests.
Bernarda Bacani and her husband filed an action for specific performance against petitioner with the
RTC. The court ruled in favor of the spouses and ordered Sunlife to pay P100,000.00.
In ruling for private respondents, the trial court concluded that the facts concealed by
the insuredwere made in good faith and under a belief that they need not be disclosed. The court
also held that the medial history was irrelevant because it wasnt medical insurance.
The Court of Appeals affirmed the decision of the trial court. The appellate court ruled that petitioner
cannot avoid its obligation by claiming concealment because the cause of death was unrelated to
the facts concealed by the insured. Petitioner's motion for reconsideration was denied. Hence, this
petition.

Issue: WON the insured was guilty of misrepresentation which made the contract void.

Held: Yes. Petition dismissed.

Ratio:
Section 26 of The Insurance Code required a party to a contract of insurance to communicate to the
other, in good faith, all facts within his knowledge which are material to the contract and as to which
he makes no warranty, and which the other has no means of ascertaining.
A neglect to communicate that which a party knows and ought to communicate, is called
concealment.
Materiality is to be determined not by the event, but solely by the probable and reasonable influence
of the facts upon the party to whom communication is due, in forming his estimate of the
disadvantages of the proposed contract or in making his inquiries.
The terms of the contract are clear. The insured is specifically required to disclose to the insurer
matters relating to his health.
The information which the insured failed to disclose were material and relevant to the approval and
issuance of the insurance policy. The matters concealed would have definitely affected petitioner's
action on his application, either by approving it with the corresponding adjustment for a higher
premium or rejecting the same. Moreover, a disclosure may have warranted a medical examination
of the insured by petitioner in order for it to reasonably assess the risk involved in accepting the
application.
Vda. de Canilang v. Court of Appeals- materiality of the information withheld does not depend on the
state of mind of the insured. Neither does it depend on the actual or physical events which ensue.
Good faith" is no defense in concealment. The insured's failure to disclose the fact that he was
hospitalized raises grave doubts about his eligibility. Such concealment was deliberate on his part.
The argument, that petitioner's waiver of the medical examination of the insured debunks the
materiality of the facts concealed, is untenable.
Saturnino v. Philippine American Life Insurance " . . . the waiver of a medical examination [in a non-
medical insurance contract] renders even more material the information required of the applicant
concerning previous condition of health and diseases suffered, for such information necessarily
constitutes an important factor which the insurer takes into consideration in deciding whether to
issue the policy or not . . . "
Anent the finding that the facts concealed had no bearing to the cause of death of the insured, it is
well settled that the insured need not die of the disease he had failed to disclose to the insurer. It is
sufficient that his non-disclosure misled the insurer in forming his estimates of the risks of the
proposed insurance policy or in making inquiries as held in Henson.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
Lim v Sunlife G.R. No. L-15774 November 29, 1920
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Yu v CA G.R. No. L-12465 May 29, 1959
J. Bautista

Facts:
Yu Pang Eng submitted application for insurance consisting of the medical declaration made by him
to the medical examiner and the report. Yu then paid the premium in the sum of P591.70.
The insured, in his application for insurance, said no to ever having stomach disease, cancer, and
fainting-spells. He also claimed to not have consulted a physician regarding such diseases.
After submitting the form, he entered the hospital where he complained of dizziness, anemia,
abdominal pains and tarry stools. He was found to have peptic ulcer.
The insured entered another hospital for medical treatment but he died of "infiltrating medullary
carcinoma, Grade 4, advanced cardiac and of lesser curvature, stomach metastases spleen."
Yu Pang Cheng aimed to collect P10,000.00 on life of one Yu Pang Eng from an insurance
company.
The company set up the defense that the insured was guilty of misrepresentation and concealment
of material facts. They subsequently refused to give the indemnity.
The trial court rendered judgment ordering defendant to pay plaintiff the sum of P10,000.00, plus
P2,000.00 as attorney's fees. The Court of Appeals reversed the decision of the trial court, holding
that the insured was guilty of concealment of material facts. Hence the present petition.

Issue: Whether or not the insured is guilty of concealment of some facts material to the risk insured
that consequently avoids the policy.

Held: Yes. Petition dismissed.

Ratio:
The first confinement took place from January 29, 1950 to February 11, while his application was
submitted on September 5, 1950. When he gave his answers to the policy, he concealed the ailment
of which he was treated in the hospital.
The negative answers given by the insured regarding his previous ailment deprived defendant of the
opportunity to make the necessary inquiry as to the nature of his past illness so that as it may form
its estimate relative to the approval of his application. Had defendant been given such opportunity,
the company would probably had never consented to the issuance of the policy in question. In fact,
according to the death certificate, the insureds death may have direct connection with his previous
illness.
Under the law, a neglect to communicate that which a party knows and ought to communicate, is
called concealment. This entitles the insurer to rescind the contract. The insured is required to
communicate to the insurer all facts within his knowledge which are material to the contract and
which the other party has not the means of ascertaining. The materiality is to be determined not by
the event but solely by the probable and reasonable influence of the facts upon the party to whom
the communication is due.
Argente vs. West Coast- One ground for the rescission of a contract of insurance under the
insurance Act is "a concealment", which in section 25 is defined "A neglect to communicate that
which a party knows and ought to communicate."
In an action on a life insurance policy where the evidence conclusively shows that the answers to
questions concerning diseases were untrue, the truth or falsity of the answers become the
determining factor. If the policy was procured by fraudulent representations, the contract of
insurance was never legally existent. It can fairly be assumed that had the true facts been disclosed
by the assured, the insurance would never have been granted.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Sunlife v CA G.R. No. 105135 June 22, 1995
Ng v Asian Crusader G.R. No. L-30685 May 30, 1983
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
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Ng v Asian Crusader G.R. No. L-30685 May 30,
1983
J. Escolin:

Facts:
Kwong Nam applied for a 20-year endowment insurance on his life for the sum of P20,000.00, with
his wife, appellee Ng Gan Zee as beneficiary. On the same date, Asian Crusader, upon receipt of
the required premium from the insured, approved the application and issued the corresponding
policy. Kwong Nam died of cancer of the liver with metastasis. All premiums had been paid at the
time of his death.
Ng Gan Zee presented a claim for payment of the face value of the policy. On the same date, she
submitted the required proof of death of the insured. Appellant denied the claim on the ground that
the answers given by the insured to the questions in his application for life insurance were untrue.
Appellee brought the matter to the attention of the Insurance Commissioner. The latter, after
conducting an investigation, wrote the appellant that he had found no material concealment on the
part of the insured and that, therefore, appellee should be paid the full face value of the policy. The
company refused to settle its obligation.
Appellant alleged that the insured was guilty of misrepresentation when he answered "No" to the
following question appearing in the application for life insurance-
Has any life insurance company ever refused your application for insurance or for reinstatement of a
lapsed policy or offered you a policy different from that applied for? If, so, name company and date.
The lower court ruled against the company on lack of evidence.
Appellant further maintains that when the insured was examined in connection with his application
for life insurance, he gave the appellant's medical examiner false and misleading information as to
his ailment and previous operation. The company contended that he was operated on for peptic
ulcer 2 years before the policy was applied for and that he never disclosed such an operation.

Issue: WON Asian Crusader was deceived into entering the contract or in accepting the risk at the
rate of premium agreed upon because of insured's representation?

Held: No. Petition dismissed.

Ratio:
Section 27 of the Insurance Law:
Sec. 27. Such party a contract of insurance must communicate to the other, in good faith, all facts
within his knowledge which are material to the contract, and which the other has not the means of
ascertaining, and as to which he makes no warranty.
"Concealment exists where the assured had knowledge of a fact material to the risk, and honesty,
good faith, and fair dealing requires that he should communicate it to the assurer, but he designedly
and intentionally withholds the same."
It has also been held "that the concealment must, in the absence of inquiries, be not only material,
but fraudulent, or the fact must have been intentionally withheld."
Fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the
contract. And as correctly observed by the lower court, "misrepresentation as a defense of the
insurer to avoid liability is an 'affirmative' defense. The duty to establish such a defense by
satisfactory and convincing evidence rests upon the defendant. The evidence before the Court does
not clearly and satisfactorily establish that defense."
It bears emphasis that Kwong Nam had informed the appellant's medical examiner of the tumor. His
statement that said tumor was "associated with ulcer of the stomach" should be construed as an
expression made in good faith of his belief as to the nature of his ailment and operation.
While the information communicated was imperfect, the same was sufficient to have induced
appellant to make further inquiries about the ailment and operation of the insured.
Section 32 of Insurance Law:
Section 32. The right to information of material facts maybe waived either by the terms of insurance
or by neglect to make inquiries as to such facts where they are distinctly implied in other facts of
which information is communicated.
Where a question appears to be not answered at all or to be imperfectly answered, and the insurers
issue a policy without any further inquiry, they waive the imperfection of the answer and render the
omission to answer more fully immaterial.
The company or its medical examiner did not make any further inquiries on such matters from the
hospital before acting on the application for insurance. The fact of the matter is that the defendant
was too eager to accept the application and receive the insured's premium. It would be inequitable
now to allow the defendant to avoid liability under the circumstances."
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Sun Life v Ingersoll G.R. No. 16475 November 8,
1921
J. Street

Facts:
Sun Life issued a policy on Dy Pocos life for US$12,500. The contract stipulated that it would be
payable to the said assured or his assigns on the 21st day of February, 1938, and if he should die
before that date, then it would be given to his legal representatives. The payment of a stipulated
annual premium during the period of the policy, or until the premiums had been completely paid for
twenty years,
Dy Poco, was adjudged an insolvent by the trial court and Frank B. Ingersoll was appointed
assignee of his estate. Poco died, and Tan Sit, was appointed as the administratrix of his intestate
estate.
Both Ingersoll, as assignee, and Tan Sit, as administratix of Dy Poco's estate, asserted claims to the
proceeds of the policy. The lower court found that Ingersoll had a better right and ordered Sun Life to
pay.
The polic stipulated that after the payment of three full premiums, the assured could surrender the
policy to the company for a "cash surrender value." Butno more than two premiums had been paid
upon the policy up to the time of the death of the assured. Hence this provision had not become
effective. It must therefore be accepted that this policy had no cash surrender value, at the time of
the assured's death, either by contract or by convention practice of the company in such cases.

Issue:
WON Ingersoll, as assignee, has a right to the proceeds of the insurance

Held: No. Sunlife must pay to the administratrix.

Ratio:
The property and interests of the insolvent which become vested in the assignee of the insolvent are
specified in section 32 of the Insolvency Law.
Sec 32 declares that the assignment to be made by the clerk of the court "shall operate to vest in the
assignee all of the estate of the insolvent debtor not exempt by law from execution."
Moreover, by section 24, the court is required, upon making an order adjudicating any person
insolvent, to stay any civil proceedings pending against him; and it is declared in section 60 that no
creditor whose debt is provable under the Act shall be allowed, after the commencement of
proceedings in insolvency, to prosecute to final judgment any action therefor against the debtor. In
connection with the foregoing may be mentioned subsections 1 and 2 of section 36, as well as the
opening words of section 33, to the effect that the assignee shall have the right and power to recover
and to take into his possession, all of the estate, assets, and claims belonging to the insolvent,
except such as are exempt by law from execution.
These provisions clearly evince an intention to vest in the assignee, for the benefit of all the creditors
of the insolvent, such elements of property and property right as could be reached and subjected by
process of law by any single creditor suing alone. "leviable assets" and "assets in insolvency" are
practically coextensive terms. Hence, in determining what elements of value constitute assets in
insolvency, the court is at liberty to consider what elements of value are subject to be taken upon
execution, and vice versa.
Section 48 of the Insolvency Law, didnt declare items from the ownership of which the assignee is
excluded. Moreover, all life insurance policies are declared by law to be assignable, regardless of
whether the assignee has an insurable interest in the life of the insured or not.
The assignee in insolvency acquired no beneficial interest in the policy of insurance in question; that
its proceeds are not liable for any of the debts provable against the insolvent in the pending
proceedings, and that said proceeds should therefore be delivered to his administratrix.
In re McKinney: no beneficial interest in this policy had ever passed to the assignee over and
beyond what constituted the surrender value, and that the legal title to the policy was vested in the
assignee merely in order to make the surrender value available to him. The conclusion therefore was
that the assignee should surrender the policy upon the payment to him of said value, as he was in
fact directed to do.
A surrender value of a policy "arises from the fact that the fixed annual premiums is much in excess
of the annual risk during the earlier years of the policy, an excess made necessary in order to
balance the deficiency of the same premium to meet the annual risk during the latter years of the
policy. This is the practical, though not the legal, relation of the company to this fund. "Upon the
surrender of the policy before the death of the assured, the company, to be relieved from all
responsibility for the increased risk, which is represented by this accumulating reserve, could well
afford to surrender a considerable part of it to the assured, or his representative. A return of a part in
some form or other is now Usually made."
The stipulation providing for a cash surrender value is a comparatively recent innovation in life
insurance. Furthermore, the practice is common among insurance companies even now to concede
nothing in the character of cash surrender value, until three full premiums have been paid, as in this
case.
The courts are therefore practically unanimous in refusing to permit the assignee in insolvency to
wrest from the insolvent a policy of insurance which contains in it no present realizable assets.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
Linkwithin
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Labels: digests, Insurance, Law
White Gold v Pioneer G.R. No. 154514. July 28,
2005
J. Quisimbing

Facts:
White Gold procured a protection and indemnity coverage for its vessels from The Steamship Mutual
through Pioneer Insurance and Surety Corporation. White Gold was issued a Certificate of Entry
and Acceptance. Pioneer also issued receipts. When White Gold failed to fully pay its accounts,
Steamship Mutual refused to renew the coverage.
Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to
recover the unpaid balance. White Gold on the other hand, filed a complaint before the Insurance
Commission claiming that Steamship Mutual and Pioneer violated provisions of the Insurance Code.
The Insurance Commission dismissed the complaint. It said that there was no need for Steamship
Mutual to secure a license because it was not engaged in the insurance business and that it was a P
& I club. Pioneer was not required to obtain another license as insurance agent because Steamship
Mutual was not engaged in the insurance business.
The Court of Appeals affirmed the decision of the Insurance Commissioner. In its decision, the
appellate court distinguished between P & I Clubs vis--vis conventional insurance. The appellate
court also held that Pioneer merely acted as a collection agent of Steamship Mutual.
Hence this petition by White Gold.

Issues:
1. Is Steamship Mutual, a P & I Club, engaged in the insurance business in the Philippines?
2. Does Pioneer need a license as an insurance agent/broker for Steamship Mutual?

Held: Yes. Petition granted.

Ratio:
White Gold insists that Steamship Mutual as a P & I Club is engaged in the insurance business. To
buttress its assertion, it cites the definition as an association composed of shipowners in general
who band together for the specific purpose of providing insurance cover on a mutual basis against
liabilities incidental to shipowning that the members incur in favor of third parties.
They argued that Steamship Mutuals primary purpose is to solicit and provide protection and
indemnity coverage and for this purpose, it has engaged the services of Pioneer to act as its agent.
Respondents contended that although Steamship Mutual is a P & I Club, it is not engaged in the
insurance business in the Philippines. It is merely an association of vessel owners who have come
together to provide mutual protection against liabilities incidental to shipowning.
Is Steamship Mutual engaged in the insurance business?
A P & I Club is a form of insurance against third party liability, where the third party is anyone other
than the P & I Club and the members. By definition then, Steamship Mutual as a P & I Club is a
mutual insurance association engaged in the marine insurance business.
The records reveal Steamship Mutual is doing business in the country albeit without the requisite
certificate of authority mandated by Section 187 of the Insurance Code. It maintains a resident
agent in the Philippines to solicit insurance and to collect payments in its behalf. Steamship Mutual
even renewed its P & I Club cover until it was cancelled due to non-payment of the calls. Thus, to
continue doing business here, Steamship Mutual or through its agent Pioneer, must secure a license
from the Insurance Commission.
Since a contract of insurance involves public interest, regulation by the State is necessary. Thus, no
insurer or insurance company is allowed to engage in the insurance business without a license or a
certificate of authority from the Insurance Commission.
2. Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate of registration
issued by the Insurance Commission. It has been licensed to do or transact insurance business by
virtue of the certificate of authority issued by the same agency. However, a Certification from the
Commission states that Pioneer does not have a separate license to be an agent/broker of
Steamship Mutual.
Although Pioneer is already licensed as an insurance company, it needs a separate license to act as
insurance agent for Steamship Mutual. Section 299 of the Insurance Code clearly states:
SEC. 299 No person shall act as an insurance agent or as an insurance broker in the solicitation or
procurement of applications for insurance, or receive for services in obtaining insurance, any
commission or other compensation from any insurance company doing business in the Philippines
or any agent thereof, without first procuring a license so to act from the Commissioner

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Labels: digests, Insurance, Law
Harding v Commerical Union August 10, 1918 G.R.
No. L-12707
J. Fisher

Facts:
Smith Bell insured Mrs. Hardings Studebaker car for a premium of Php 150. It was insured for Php
3,000, the value of the car. The car was destroyed by fire. Mrs. Harding furnished the defendant the
proofs of her loss, but the company didnt pay. Evidence showed that Hermanos sold the automobile
to Canson for P3,200. Canson then sold the car to Harding for Php 1,500. The car was then sold for
P2,000. It was then resold to Harding. He gave the car to his wife; Mrs. Henry E. Harding as a
present. The automobile was repaired and repainted at the Luneta Garage at P900.
The company averred that they gave false information, particularly that on the price of the vehicle
and the ownership of the car. Hence, they aimed to declare the policy void.
The trial court found that there was no fraud.
This was an action by plaintiffs to recover from defendant the sum of P3,000 and interest, alleged to
be due under the terms of a policy of insurance. The trial court gave plaintiffs judgment for the
amount demanded, with interest and costs, and from that decision the defendant appealed.

Issue: Was the valuation of the car for P3000 done fraudulently, thereby making the policy void?

Held: No.

Ratio:
The policy stated that
That during the period above set forth and during any period for which the company may agree to
renew this policy the company will subject to the exception and conditions contained herein or
endorsed hereon indemnify the insured against loss of or damage to any motor car described in the
schedule by whatever cause such loss or damage may be occasioned and will further indemnify the
insured up to the value of the car or P3,000 whichever is the greater against any claim at common
law made by any person for loss of life or for accidental bodily injury or damage to property caused
by the said motor car including law costs payable in connection with such claim when incurred with
the consent of the company.
Defendant contends that the statement regarding the cost of the automobile was a warranty, that the
statement was false, and that, therefore, the policy never attached to the risk.
The automobile had in fact cost more than the amount mentioned. The court below found, and the
evidence shows, that the automobile was bought by plaintiffs husband a few weeks before the
issuance of the policy in question for the sum of P2,800, and that between that time and the
issuance of the policy some P900 was spent upon it in repairs and repainting. The mechanic who
testified told that the automobile was practically as good as new at the time the insurance was
effected.
The amount stated was less than the actual outlay which the automobile represented to Mr. Harding,
including repairs, when the insurance policy was issued. It would be unfair to hold the policy void
simply because the outlay represented by the automobile was made by the plaintiffs husband and
not by his wife, to whom he had given the automobile.
The trial court found that Mrs. Harding, in fixing the value of the automobile at P3,000, acted upon
information given her by her husband and by Mr. Server, the manager of the Luneta Garage. She
merely repeated the information which had been given her by her husband, and at the same time
disclosed to defendants agent the source of her information. There is no evidence to sustain the
contention that this communication was made in bad faith.
Under these circumstances, we do not think that the facts stated in the proposal can be held as a
warranty of the insured, even if it should have been shown that they were incorrect in the absence of
proof of willful misstatement. Under such circumstance, the proposal is to be regarded as the act of
the insurer and not of the insured.
The defendant, upon the information given by plaintiff, and after an inspection of the automobile by
its examiner, having agreed that it was worth P3,000, is bound by this valuation in the absence of
fraud on the part of the insured. All statements of value are, of necessity, to a large extent matters of
opinion, and it would be outrageous to hold that the validity of all valued policies must depend upon
the absolute correctness of such estimated value.
Supreme Court v First National- The ordinary test of the value of property is the price it will
commend in the market if offered for sale. But that test cannot, in the very nature of the case, be
applied at the time application is made for insurance. Men may honestly differ about the value of
property, or as to what it will bring in the market; and such differences are often very marked among
those whose special business it is to buy and sell property of all kinds.
The assured could do no more than estimate such value; and that, it seems, was all that he was
required to do in this case. His duty was to deal fairly with the Company in making such estimate.
Section 163 of the Insurance Law (Act No. 2427) provides that the effect of a valuation in a policy of
fire insurance is the same as in a policy of marine insurance.
By the terms of section 149 of the Act cited, the valuation in a policy of marine insurance is
conclusive if the insured had an insurable interest and was not guilty of fraud.
The valuation of the automobile, for the purposes of the insurance, is binding upon the defendant
corporation.
You might also like:
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Tibay v CA G.R. No. 119655. May 24, 1996
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
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Labels: digests, Insurance, Law
Development Insurance v IAC G.R. No. 71360 July
16, 1986
J. Cruz

Facts:
A fire occurred in the building of Philippine Union. It sued for recovery of damages from the petitioner
on the basis of an insurance contract between them. The petitioner failed to answer on time despite
the numerous extensions it asked for. It was declared in default by the trial court. A judgment of
default was subsequently rendered on the strength of the evidence given by the private respondent,
which was allowed damages. The petitioner moved to lift the order of default. Its motion was denied.
It went to the appellate court, which affirmed the decision of the trial court. Hence this appeal.

Issue: Was Philippine Union required to jointly indemnify the building?

Held: No. Petition dismissed.

Ratio:
The policy insured the private respondent's building against fire for P2,500,000.00.
The petitioner argued that the respondent must share the difference between that amount and the
face value of the policy and the loss sustained for 5.8 million under Condition 17 of the policy.
The building was insured at P2,500,000.00 by agreement of the insurer and the insured.
The agreement is known as an open policy and is subject to the express condition that:
In the event of loss, whether total or partial, it is understood that the amount of the loss shall be
subject to appraisal and the liability of the company, if established, shall be limited to the actual loss,
subject to the applicable terms, conditions, warranties and clauses of this Policy, and in no case
shall exceed the amount of the policy.
Section 60 of the Insurance Code defines an open policy is one in which the value of the thing
insured is not agreed upon but is left to be ascertained in case of loss." This means that the actual
loss, as determined, will represent the total indemnity due the insured from the insurer except only
that the total indemnity shall not exceed the face value of the policy.
The actual loss has been ascertained in this case. Hence, applying the open policy clause as
expressly agreed upon, the private respondent is entitled to indemnity in the total amount of
P508,867.00.
The refusal of its vice-president to receive the private respondent's complaint was the first indication
of the petitioner's intention to prolong this case and postpone the discharge of its obligation to the
private respondent under this agreement. They still evaded payment for 5 years.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
Philippine Health Care v CIR G.R. No. 167330 September 18, 2009
American Home v Chua G.R. No. 130421. June 28, 1999
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Labels: digests, Insurance, Law
Pandiman v Marine Manning G.R. No. 143313.
June 21, 2005
J. Garcia

Facts:
Respondent Rosita Singhids deceased husband Benito Benito was hired by Fullwin, through its
local agent, respondent Marine Manning, as chief cook on board the vessel MV Sun Richie Five for
a term of twelve (12) months.
The vessel and its crew were insured with Ocean Marine. Ocean Marine transacted business in the
Philippines through its local correspondent, petitioner Pandiman Philippines, Inc.
While the vessel was on its way to Shanghai from Ho Chih Minh City, Vietnam Benito suffered a
heart attack. His remains were flown back to the Philippines.
Rosita filed a claim for death benefits with Marine Manning, which, however, referred her to
petitioner Pandiman. Petitioner approved the claim and recommended payment in the amount of
US$79,000.00. But Rositas death claims remained unpaid.
Hence, Rosita filed with the Labor Arbiter a complaint against Pandiman, Marine Manning, and
Ocean Marine for recovery of death benefits, moral and exemplary damages and attorneys fees.
The NLRC ruled in her favor but dismissed the claim against Pandiman.
On Marine Mannings appeal to the NLRC, the latter set aside that of the Labor Arbiter, absolved the
petitioner from any liability and instead held Pandiman and Ocean Marine liable for Rositas claim.
Pandiman went to the Court of Appeals on a petition. It dismissed the petition and affirmed the
NLRC ruling.

Issue:
1. Whether or not petitioner Pandiman may be held liable for Rositas claim for death benefits as
Benitos widow
2. Whether or not respondent MMMC and its foreign principal Fullwin with whom unquestionably the
late Benito had an employment contract, should be absolved from death claim liabilities in this case.

Held: No. Yes. Petition granted.

Ratio:
The shipowners provided insurance for the ships and crew through an association. In this protection
and indemnity agreement, which is actually an insurance contract, the provisions of the Insurance
Code is the governing law. In the subject insurance contract, Ocean Marine is the insurer, the
shipowner (Sun Richie Five Bulkers S.A.) is the insured, and Rosita Singhid as widow and heir of a
crew on board the insured vessel like Benito, is a beneficiary.
The Court of Appeals held Panidman liable for Rositas death claims under the contract of insurance,
on the postulate that petitioner is an insurance agent under Section 300 of the Code.
Petitioner PPI, however, claims that it is not an insurance agent but a mere local correspondent of
the P&I Club. Thus, petitioner maintains that even if OMMIAL (the P&I Club), as insurer of Sun
Richie Five, is held principally liable to Rosita for her husbands death benefits, petitioner cannot be
held solidarily liable together with said insurer.
There is nothing therein to show that an insurance contract in this case was in fact negotiated
between the insured Sun Richie Five and the insurer Ocean Marine, through petitioner as insurance
agent which will make petitioner an insurance agent under Section 300 of the Insurance Code.
The NLRC, in its decision, merely relied on petitioners reference to Ocean Marine as its principal
instead of its client. Such reference, however, will not and cannot vary the definition of what an
insurance agent actually is under the law, nor can it automatically turn petitioner into one.
Payment for claims arising from the peril is definitely not one of the liabilities of an insurance agent.
Thus, there is no legal basis whatsoever for holding Pandiman solidarily liable with insurer Ocean
Marine for Rositas claim for death benefits.
The insurance contract between the insurer and the insured, under Article 1311 of the Civil Code, is
binding only upon the parties who execute the same. Petitioner PPI is not a party to the insurance
contract in question.
2. Anent the second issue, the Court agrees with petitioners contention that the appellate court
erred in affirming the NLRCs decision which absolved Fullwin and its manning agent, respondent
MMMC, of their joint and solidary liability arising from Benitos employment contract with Fullwin.
It is undisputed that Benito was employed by Fullwin through its manning agency, Marine Manning.
Fullwin, Benitos principal employer is, therefore, liable under the same employment contract. For its
part, MMMC is bound by its undertaking pursuant to the Rules and Regulations Governing Overseas
Employment (1991) that the manning applicants:
(3) Shall assume joint and solidary liability with the employer for all claims and liabilities which
may arise in connection with the implementation of the contract, including but not limited to payment
of wages, health and disability compensation and repatriation;
By reason of the foregoing undertaking, respondent MMMC is jointly and solidarily liable with its
foreign principal Fullwin, for whatever death benefits Benitos widow is entitled to under Benitos
employment contract.
You might also like:
Philippine Health Care v CIR G.R. No. 167330 September 18, 2009
Tibay v CA G.R. No. 119655. May 24, 1996
American Home v Chua G.R. No. 130421. June 28, 1999
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
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Labels: digests, Insurance, Law
Consuegra v GSIS G.R. No. L-28093 January 30,
1971
J. Zaldivar

Facts:
Appeal on purely questions of law from the decision of the Court of First Instance of Surigao del
Norte, dated March 7, 1967, in its Special Proceeding No. 1720.
The late Jose Consuegra was employed as a shop foreman in the province of Surigao del Norte. He
contracted two marriages, the first with Rosario Diaz and the second, which was contracted in good
faith while the first marriage was subsisting, with Basilia Berdin.
Consuegra died, while the proceeds of his GSIS life insurance were paid to petitioner Basilia Berdin
and her children who were the beneficiaries named in the policy. They received Php 6,000.
Consuegra did not designate any beneficiary who would receive the retirement insurance benefits
due to him. Respondent Rosario Diaz, the widow by the first marriage, filed a claim with the GSIS
asking that the retirement insurance benefits be paid to her as the only legal heir of Consuegra,
considering that the deceased did not designate any beneficiary with respect to his retirement
insurance benefits.
Petitioner Berdin and her children, likewise, filed a similar claim with the GSIS, asserting that being
the beneficiaries named in the life insurance policy of Consuegra, they are the only ones entitled to
receive the retirement insurance benefits due the deceased Consuegra.
The GSIS ruled that the legal heirs of the late Jose Consuegra were Rosario Diaz, his widow by his
first marriage who is entitled to one-half, or 8/16, of the retirement insurance benefits, on the one
hand; and Basilia Berdin, his widow by the second marriage and their seven children, on the other
hand, who are entitled to the remaining one-half, or 8/16.
Basilia Berdin didnt agree. She filed a petition declaring her and her children to be the legal heirs
and exclusive beneficiaries of the retirement insurance.
The trial court affirmed stating that: "when two women innocently and in good faith are legally united
in holy matrimony to the same man, they and their children, born of said wedlock, will be regarded
as legitimate children and each family be entitled to one half of the estate.
Hence the present appeal by Basilia Berdin and her children.

Issue: To whom should this retirement insurance benefits of Jose Consuegra be paid, because he
did not designate the beneficiary of his retirement insurance?

Held: No. Petition denied.

Ratio:
Berdin averred that because the deceased Jose Consuegra failed to designate the beneficiaries in
his retirement insurance, the appellants who were the beneficiaries named in the life insurance
should automatically be considered the beneficiaries to receive the retirement insurance benefits.
The GSIS offers two separate and distinct systems of benefits to its members one is the life
insurance and the other is the retirement insurance. These two distinct systems of benefits are paid
out from two distinct and separate funds that are maintained by the GSIS.
In the case of the proceeds of a life insurance, the same are paid to whoever is named the
beneficiary in the life insurance policy. As in the case of a life insurance provided for in the Insurance
Act, the beneficiary in a life insurance under the GSIS may not necessarily be a heir of the insured.
The insured in a life insurance may designate any person as beneficiary unless disqualified to be so
under the provisions of the Civil Code. And in the absence of any beneficiary named in the life
insurance policy, the proceeds of the insurance will go to the estate of the insured.
Retirement insurance is primarily intended for the benefit of the employee, to provide for his old age,
or incapacity, after rendering service in the government for a required number of years. If the
employee reaches the age of retirement, he gets the retirement benefits even to the exclusion of the
beneficiary or beneficiaries named in his application for retirement insurance. The beneficiary of the
retirement insurance can only claim the proceeds of the retirement insurance if the employee dies
before retirement. If the employee failed or overlooked to state the beneficiary of his retirement
insurance, the retirement benefits will accrue to his estate and will be given to his legal heirs in
accordance with law, as in the case of a life insurance if no beneficiary is named in the insurance
policy.
GSIS had correctly acted when it ruled that the proceeds should be divided equally between his first
living wife and his second. The lower court has correctly applied the ruling of this Court in the case of
Lao v Dee.
Gomez vs. Lipana- in construing the rights of two women who were married to the same man, held
"that since the defendant's first marriage has not been dissolved or declared void the conjugal
partnership established by that marriage has not ceased. Nor has the first wife lost or relinquished
her status as putative heir of her husband under the new Civil Code, entitled to share in his estate
upon his death should she survive him. Consequently, whether as conjugal partner in a still
subsisting marriage or as such putative heir she has an interest in the husband's share in the
property here in dispute....
With respect to the right of the second wife, although the second marriage can be presumed to be
void ab initio as it was celebrated while the first marriage was still subsisting, still there is need for
judicial declaration of such nullity. And inasmuch as the conjugal partnership formed by the second
marriage was dissolved before judicial declaration of its nullity, "the only lust and equitable solution
in this case would be to recognize the right of the second wife to her share of one-half in the property
acquired by her and her husband and consider the other half as pertaining to the conjugal
partnership of the first marriage."
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Tibay v CA G.R. No. 119655. May 24, 1996
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Del Val v Del Val G.R. No. L-9374 February 16, 1915
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
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Labels: digests, Insurance, Law
Del Val v Del Val G.R. No. L-9374 February 16,
1915
J. Moreland
Fatcs:
This is an appeal from a judgment of the Court of First Instance of the city of Manila dismissing the
complaint with costs.
The parties are siblings who were the only heirs at law and next of kin of Gregorio del Val, who
passed away intestate. An administrator was appointed for the estate of the deceased, and, after a
partial administration, it was closed. During the lifetime of the deceased he took out insurance on his
life for the sum of P40,000 and made it payable to Andres del Val as sole beneficiary. After his
death, the defendant Andres collected the face of the policy. He paid the sum of P18,365.20 to
redeem certain real estate which the decedent had sold to third persons with a right to repurchase.
The redemption of said premises was made by the attorney of the defendant in the name of the
plaintiff and the defendant as heirs of the deceased vendor. Andres, on death of the deceased, took
possession of most of his personal property and that he has also the balance on the insurance policy
amounting to P21,634.80.
Plaintiffs contend that the amount of the insurance policy belonged to the estate of the deceased
and not to the defendant personally, hence they are entitled to a partition not only of the real and
personal property, but also of the P40,000 life insurance. The complaint prays a partition of all the
property, both real and personal, left by the deceased, and that the defendant account for
P21,634.80. They also wanted to divide this equally among the plaintiffs and defendant along with
the other property of deceased.
The defendants claim was that redemption of the real estate sold by his father was made in the
name of the plaintiffs and himself instead of in his name alone without his knowledge or consent. He
also averred that it was not his intention to use the proceeds of the insurance policy for the benefit of
any person but himself, he alleging that he was and is the sole owner thereof and that it is his
individual property
The trial court refused to give relief to either party and dismissed the action due to the argument that
the action for partition failed to comply with the Civil Procedure Code sec. 183, in that it does not
'contain an adequate description of the real property of which partition is demanded.'

Issue: Can the proceeds of the policy be divided among the heirs?

Held: No. Petition dismissed.

Ratio:
The proceeds of the life-insurance policy belong exclusively to the defendant as his individual and
separate property. That the proceeds of an insurance policy belong exclusively to the beneficiary
and not to the estate of the person whose life was insured, and that such proceeds are the separate
and individual property of the beneficiary, and not of the heirs of the person whose life was insured,
is the doctrine in America. The doctrine is embedded in the Code of Commerce where:
The amount which the underwriter must deliver to the person insured, in fulfillment of the contract,
shall be the property of the latter, even against the claims of the legitimate heirs or creditors of any
kind whatsoever of the person who effected the insurance in favor of the former.
The plaintiffs invoked Article 1035 of the Civil Code, where it reads:
An heir by force of law surviving with others of the same character to a succession must bring into
the hereditary estate the property or securities he may have received from the deceased during the
life of the same, by way of dowry, gift, or for any good consideration, in order to compute it in fixing
the legal portions and in the account of the division.
They also invoked Article 819. This article provides that "gifts made to children which are not
betterments shall be considered as part of their legal portion."
The court didnt agree because the contract of life insurance is a special contract and the destination
of the proceeds is determined by special laws which deal exclusively with that subject. The Civil
Code has no provisions which relate directly and specifically to life- insurance contracts or to the
destination of life insurance proceeds. That was under the Code of Commerce.
The plaintiffs claim that the property repurchased with the insurance proceeds belongs to the heirs in
common and not to the defendant alone. This wasnt agreed upon by the court unless the facts
appeared that Andres acted as he did with the intention that the other heirs should enjoy with him
the ownership of the estate.

You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
Consuegra v GSIS G.R. No. L-28093 January 30, 1971
Linkwithin
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Labels: digests, Insurance, Law
Insular v Ebrado G.R. No. L-44059 October 28,
1977
Facts:
J. Martin:
Cristor Ebrado was issued by The Life Assurance Co., Ltd., a policy for P5,882.00 with a rider
forAccidental Death. He designated Carponia T. Ebrado as the revocable beneficiary in his policy.
He referred to her as his wife.
Cristor was killed when he was hit by a failing branch of a tree. Insular Life was made liable to pay
the coverage in the total amount of P11,745.73, representing the face value of the policy in the
amount of P5,882.00 plus the additional benefits for accidental death.
Carponia T. Ebrado filed with the insurer a claim for the proceeds as the designated beneficiary
therein, although she admited that she and the insured were merely living as husband and wife
without the benefit of marriage.
Pascuala Vda. de Ebrado also filed her claim as the widow of the deceased insured. She asserts
that she is the one entitled to the insurance proceeds.
Insular commenced an action for Interpleader before the trial court as to who should be given the
proceeds. The court declared Carponia as disqualified.

Issue: WON a common-law wife named as beneficiary in the life insurance policy of a legally married
man can claim the proceeds in case of death of the latter?

Held: No. Petition

Ratio:
Section 50 of the Insurance Act which provides that "the insurance shall be applied exclusively to the
proper interest of the person in whose name it is made"
The word "interest" highly suggests that the provision refers only to the "insured" and not to the
beneficiary, since a contract of insurance is personal in character. Otherwise, the prohibitory laws
against illicit relationships especially on property and descent will be rendered nugatory, as the same
could easily be circumvented by modes of insurance.
When not otherwise specifically provided for by the Insurance Law, the contract of life insurance is
governed by the general rules of the civil law regulating contracts. And under Article 2012 of the
same Code, any person who is forbidden from receiving any donation under Article 739 cannot be
named beneficiary of a fife insurance policy by the person who cannot make a donation to him.
Common-law spouses are barred from receiving donations from each other.
Article 739 provides that void donations are those made between persons who were guilty of
adultery or concubinage at the time of donation.
There is every reason to hold that the bar in donations between legitimate spouses and those
between illegitimate ones should be enforced in life insurance policies since the same are based on
similar consideration. So long as marriage remains the threshold of family laws, reason and morality
dictate that the impediments imposed upon married couple should likewise be imposed upon extra-
marital relationship.
A conviction for adultery or concubinage isnt required exacted before the disabilities mentioned in
Article 739 may effectuate. The article says that in the case referred to in No. 1, the action for
declaration of nullity may be brought by the spouse of the donor or donee; and the guilty of the
donee may be proved by preponderance of evidence in the same action.
The underscored clause neatly conveys that no criminal conviction for the offense is a condition
precedent. The law plainly states that the guilt of the party may be proved in the same acting for
declaration of nullity of donation. And, it would be sufficient if evidence preponderates.
The insured was married to Pascuala Ebrado with whom she has six legitimate children. He was
also living in with his common-law wife with whom he has two children.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
Consuegra v GSIS G.R. No. L-28093 January 30, 1971
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Labels: digests, Insurance, Law
Filipinas v Christern G.R. No. L-2294 May 25, 1951
J. Paras

Facts:
Christern obtained from Filipinas a fire insurance policy of P1000,000, covering merchandise
contained in a building located at Binondo. During the Japanese military occupation, the building and
insured merchandise were burned. The respondent its claim under the policy. The total loss suffered
by the respondent was fixed at P92,650.
The petitioner refused to pay the claim on the ground that the policy in favor of the respondent had
ceased to be in force on the date the U.S. declared war on Germany with the respondent
Corporation being controlled by German subjects and the petitioner being a company under
American jurisdiction (though organized by Philippine laws) when the policy was issued on October
1, 1941. The petitioner, however, paid to the respondent the sum of P92,650 on April 19, 1943 under
orders from the military government.
The insurer filed for a suit to recover the sum. The contention was that the policy ceased to be
effective because of the outbreak of the war and that the payment made by the petitioner to the
respondent corporation during the Japanese military occupation was under pressure.
The tiral and the appellate courts dismissed the action. The Court of Appeals claimed that a
corporation is a citizen of the country or state by and under the laws of which it was created or
organized.
Hence this appeal.

Issue: Whether the policy in question became null and void upon the declaration of war

Held: Yes. Petition granted.

Ratio:
The majority of the stockholders of the respondent corporation were German subjects. The
respondent became an enemy corporation upon the outbreak of the war. The English and American
cases relied upon by the Court of Appeals have lost their force in view of the latest decision of the
Supreme Court of the United States in Clark vs. Uebersee Finanz Korporation where the controls
test has been adopted.
Measures of blocking foreign funds, the so called freezing regulations, and other administrative
practice in the treatment of foreign-owned property in the United States allowed to large degree the
determination of enemy interest in domestic corporations and thus the application of the control test.
In Clark vs. Uebersee, the court held that The property of all foreign interest was placed within the
reach of the vesting power (of the Alien Property Custodian) not to appropriate friendly or neutral
assets but to reach enemy interest which masqueraded under those innocent fronts. . . . The power
of seizure and vesting was extended to all property of any foreign country or national so that no
innocent appearing device could become a Trojan horse.
The Philippine Insurance Law states that anyone except a public enemy may be insured. It stands
to reason that an insurance policy ceases to be allowable as soon as an insured becomes a public
enemy.
All individuals therefore, who compose the belligerent powers, exist, as to each other, in a state of
utter exclusion, and are public enemies.
Vance- In the case of an ordinary fire policy, which grants insurance only from year, or for some
other specified term it is plain that when the parties become alien enemies, the contractual tie is
broken and the contractual rights of the parties, so far as not vested, are lost.
The respondent having become an enemy corporation on December 10, 1941, the insurance policy
issued in its favor on October 1, 1941, by the petitioner had ceased to be valid and enforceable, and
since the insured goods were burned after December 10, 1941, and during the war, the respondent
was not entitled to any indemnity under said policy from the petitioner. The premium must be
returned for the sake of justice.
It results that the petitioner is entitled to recover the indemnity paid. However, the petitioner will be
entitled to recover only the equivalent of P92,650 paid on April 19, 1943.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Harding v Commerical Union August 10, 1918 G.R. No. L-12707
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
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Labels: digests, Insurance, Law
Pacific Timber v CA G.R. No. L-38613 February 25,
1982
J. De Castro

Facts:
The plaintiff secured temporary insurance from the defendant for its exportation of 1,250,000 board
feet of Philippine Lauan and Apitong logs to be shipped from Quezon Province to Okinawa and
Tokyo, Japan.
Workmens Insurance issued a cover note insuring the cargo of the plaintiff subject to its terms and
conditions.
The two marine policies bore the numbers 53 HO 1032 and 53 HO 1033. Policy No. 53 H0 1033 was
for 542 pieces of logs equivalent to 499,950 board feet. Policy No. 53 H0 1033 was for 853 pieces of
logs equivalent to 695,548 board feet. The total cargo insured under the two marine policies
consisted of 1,395 logs, or the equivalent of 1,195.498 bd. ft.
After the issuance of the cover note, but before the issuance of the two marine policies Nos. 53 HO
1032 and 53 HO 1033, some of the logs intended to be exported were lost during loading operations
in the Diapitan Bay.
While the logs were alongside the vessel, bad weather developed resulting in 75 pieces of logs
which were rafted together co break loose from each other. 45 pieces of logs were salvaged, but 30
pieces were verified to have been lost or washed away as a result of the accident.
Pacific Timber informed Workmens about the loss of 32 pieces of logs during loading of SS
woodlock.
Although dated April 4, 1963, the letter was received in the office of the defendant only on April 15,
1963. The plaintiff claimed for insurance to the value of P19,286.79.
Woodmens requested an adjustment company to assess the damage. It submitted its report, where
it found that the loss of 30 pieces of logs is not covered by Policies Nos. 53 HO 1032 and 1033 but
within the 1,250,000 bd. ft. covered by Cover Note 1010 insured for $70,000.00.
The adjustment company submitted a computation of the defendant's probable liability on the loss
sustained by the shipment, in the total amount of P11,042.04.
Woodmens wrote the plaintiff denying the latter's claim on the ground they defendant's investigation
revealed that the entire shipment of logs covered by the two marine policies were received in good
order at their point of destination. It was further stated that the said loss may be considered as
covered under Cover Note No. 1010 because the said Note had become null and void by virtue of
the issuance of Marine Policy Nos. 53 HO 1032 and 1033.
The denial of the claim by the defendant was brought by the plaintiff to the attention of the Insurance
Commissioner. The Insurance Commissioner ruled in favor of indemnifying Pacific Timber. The
company added that the cover note is null and void for lack of valuable consideration. The trial court
ruled in petitioners favor while the CA dismissed the case. Hence this appeal.

Issues:
WON the cover note was null and void for lack of valuable consideration
WON the Insurance company was absolved from responsibility due to unreasonable delay in giving
notice of loss.

Held: No. No. Judgment reversed.

Ratio:
1. The fact that no separate premium was paid on the Cover Note before the loss occurred does not
militate against the validity of the contention even if no such premium was paid. All Cover Notes do
not contain particulars of the shipment that would serve as basis for the computation of the
premiums. Also, no separate premiums are required to be paid on a Cover Note.
The petitioner paid in full all the premiums, hence there was no account unpaid on the insurance
coverage and the cover note. If the note is to be treated as a separate policy instead of integrating it
to the regular policies, the purpose of the note would be meaningless. It is a contract, not a mere
application for insurance.
It may be true that the marine insurance policies issued were for logs no longer including those
which had been lost during loading operations. This had to be so because the risk insured against is
for loss during transit, because the logs were safely placed aboard.
The non-payment of premium on the Cover Note is, therefore, no cause for the petitioner to lose
what is due it as if there had been payment of premium, for non-payment by it was not chargeable
against its fault. Had all the logs been lost during the loading operations, but after the issuance of the
Cover Note, liability on the note would have already arisen even before payment of premium.
Otherwise, the note would serve no practical purpose in the realm of commerce, and is supported by
the doctrine that where a policy is delivered without requiring payment of the premium, the
presumption is that a credit was intended and policy is valid.
2. The defense of delay cant be sustained. The facts show that instead of invoking the ground of
delay in objecting to petitioner's claim of recovery on the cover note, the insurer never had this in its
mind. It has a duty to inquire when the loss took place, so that it could determine whether delay
would be a valid ground of objection.
There was enough time for insurer to determine if petitioner was guilty of delay in communicating the
loss to respondent company. It never did in the Insurance Commission. Waiver can be raised
against it under Section 84 of the Insurance Act.
You might also like:
Tibay v CA G.R. No. 119655. May 24, 1996
Harding v Commerical Union August 10, 1918 G.R. No. L-12707
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
Linkwithin
Posted by Draft Inger at 12:01 AM 0 Comments
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Labels: digests, Insurance, Law
Thursday, July 12, 2012
Lim v Sunlife G.R. No. L-15774 November 29, 1920
J. Malcolm

Facts:
Luis Lim of Zamboanga applied for a Sun Life policy for Php 5,000. He designated his wife, Pilar, as
beneficiary. The first premium of P433 was paid by Lim, then the company issued a "provisional
policy." Lim died after the issuance of the provisional policy but before approval of the application.
Pilar brought an action to recover from Sun Life the sum of P5,000, the amount named in the
provisional policy. She lost in the trial court hence this appeal.
The "provisional policy" reads as follows:
The above-mentioned life is to be assured in accordance with the terms and conditions contained or
inserted by the Company in the policy which may be granted by it in this particular case for four
months only from the date of the application, provided that the Company shall confirm this
agreement by issuing a policy on said application when the same shall be submitted to the Head
Office in Montreal. Should the Company not issue such a policy, then this agreement shall be null
and void ab initio, and the Company shall be held not to have been on the risk at all, but in such
case the amount herein acknowledged shall be returned.

Issue: WON there was a perfected contract of insurance

Held: No. Petition dismissed.

Ratio:
The policy for four months is expressly made subjected to the affirmative condition that "the
company shall confirm this agreement by issuing a policy on said application when the same shall
be submitted to the head office in Montreal."
Should the company not issue such a policy, then this agreement shall be null and void ab initio,
and the company shall be held not to have been on the risk." This means that the agreement should
not go into effect until the home office of the company should confirm it by issuing a policy. The
provisional policy amounts to nothing but an acknowledgment on behalf of the company, that it has
received from the person named therein the sum of money agreed upon as the first year's premium
upon a policy to be issued upon the application, if the application is accepted by the company.
There can be no contract of insurance unless the minds of the parties have met in agreement. In this
case, the contract of insurance was not consummated by the parties.

The general rule concerning the agent's receipt pending approval or issuance of policy is in several
points, according to Joyce:
2. Where an agreement is made between the applicant and the agent whether by signing an
application containing such condition, or otherwise, that no liability shall attach until the principal
approves the risk and a receipt is given buy the agent, such acceptance is merely conditional, and it
subordinated to the act of the company in approving or rejecting; so in life insurance a "binding slip"
or "binding receipt" does not insure of itself.
The court held that this second point applied to the case.
American jurisprudence tells us of such examples.
Steinle vs. New York Life Insurance Co.- the amount of the first premium had been paid to an
insurance agent and a receipt was given. The paper declared that if the application was accepted by
the company, the insurance shall take effect from the date of the application but that if the
application was not accepted, the money shall be returned. The court held that there was no
perfection of the contract.
Cooksey vs. Mutual Life Insurance Co.- the person applying for the life insurance paid and amount
equal to the first premium, but the application and the receipt for the money paid, stipulated that the
insurance was to become effective only when the application was approved and the policy issued.
There was also no perfection.
A binding receipt is a custom where temporary insurance pending the consideration of the
application was given until the policy be issued or the application rejected, and such contracts are
upheld and enforced when the applicant dies before the issuance of a policy or final rejection of the
application.
However, there was no perfected contract because of the clause in the application and the receipt
stipulate expressly that the insurance shall become effective only when the "application shall be
approved and the policy duly signed by the secretary at the head office of the company and issued."
The premium of 433 must be returned.

You might also like:
Enriquez v Sunlife November 29, 1920 G.R. No. L-15895
Tibay v CA G.R. No. 119655. May 24, 1996
Vda de Sindayen v Insular September 4, 1935 G.R. No. 41702
Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982
Linkwithin
Posted by Draft Inger at 11:56 PM 0 Comments
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Labels: digests, Insurance, Law
Philippine Health Care v CIR G.R. No. 167330
September 18, 2009
J. Corona

Facts:
Philippine Health Cares objectives were:
"[t]o establish, maintain, conduct and operate a prepaid group practice health care delivery system
or a health maintenance organization to take care of the sick and disabled persons enrolled in the
health care plan and to provide for the administrative, legal, and financial responsibilities of the
organization.
It lost the case in 2004 when it was made to pay over 100 million in VAT deficiencies. At the time the
MFR was filed, it was able to avail of tax amnesty under RA 9840 by paying 5 percent of the tax or 5
million pesos.
Petitioner passed an MFR but the CA denied. Hence, this case.

Issue:
Was petitioner, as an HMO, engaged in the business of insurance during the pertinent taxable years,
and was thus liable for DST?

Held: No. Mfr granted. CIR must desist from collecting tax.

Ratio:
Section 185 of the NIRC . Stamp tax on fidelity bonds and other insurance policies. On all policies
of insurance or bonds or obligations of the nature of indemnity for loss, damage, or liability made or
renewed by any person, association or company or corporation transacting the business of accident,
fidelity, employers liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other
branch of insurance (except life, marine, inland, and fire insurance).
Two requisites must concur before the DST can apply, namely: (1) the document must be a policy of
insurance or an obligation in the nature of indemnity and (2) the maker should be transacting the
business of accident, fidelity, employers liability, plate, glass, steam boiler, burglar, elevator,
automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance).
Under RA 7875, an HMO is "an entity that provides, offers or arranges for coverage of designated
health services needed by plan members for a fixed prepaid premium."
Various courts in the United States have determined that HMOs are not in the insurance business.
One test that they have applied is whether the assumption of risk and indemnification of loss are the
principal object and purpose of the organization or whether they are merely incidental to its
business. If these are the principal objectives, the business is that of insurance. But if such is
incidental and service is the principal purpose, then the business is not insurance.
Applying the "principal object and purpose test," there is significant American case law supporting
the argument that a corporation, whose main object is to provide the members of a group with health
services, is not engaged in the insurance business.
For the purpose of determining what "doing an insurance business" means, we have to scrutinize the
operations of the business as a whole. This is of course only prudent and appropriate, taking into
account laws applicable to those in the insurance business.
Petitioner, as an HMO, is not part of the insurance industry. This is evident from the fact that it is not
supervised by the Insurance Commission but by the Department of Health. In fact, in a letter dated
September 3, 2000, the Insurance Commissioner confirmed that petitioner is not engaged in the
insurance business.
As to whether the business is covered by the DST, we can see that while the contract did contains
all the elements of an insurance contract, as stated in Sec 2., Par 1 of the Insurance Code, the
primary purpose of the company is to render service. The primary purpose of the parties in making
the contract may negate the existence of an insurance contract.
Also, there is no loss, damage or liability on the part of the member that should be indemnified by
petitioner as an HMO. Under the agreement, the member pays petitioner a predetermined
consideration in exchange for the hospital, medical and professional services rendered by the
petitioners physician or affiliated physician to him.
In other words, there is nothing in petitioner's agreements that gives rise to a monetary liability on
the part of the member to any third party-provider of medical services which might in turn necessitate
indemnification from petitioner. The terms "indemnify" or "indemnity" presume that a liability or claim
has already been incurred. There is no indemnity precisely because the member merely avails of
medical services to be paid or already paid in advance at a pre-agreed price under the agreements.
Also, a member can take advantage of the bulk of the benefits anytime, e.g. laboratory services, x-
ray, routine annual physical examination and consultations, vaccine administration as well as family
planning counseling, even in the absence of any peril, loss or damage on his or her part.
Petitioner is obliged to reimburse the member who receives care from a non-participating physician
or hospital. However, this is only a very minor part of the list of services available. The assumption of
the expense by petitioner is not confined to the happening of a contingency but includes incidents
even in the absence of illness or injury.
Consequently, there is a need to distinguish prepaid service contracts (like those of petitioner) from
the usual insurance contracts.
However, assuming that petitioners commitment to provide medical services to its members can be
construed as an acceptance of the risk that it will shell out more than the prepaid fees, it still will not
qualify as an insurance contract because petitioners objective is to provide medical services at
reduced cost, not to distribute risk like an insurer.
If it had been the intent of the legislature to impose DST on health care agreements, it could have
done so in clear and categorical terms. It had many opportunities to do so. But it did not. The fact
that the NIRC contained no specific provision on the DST liability of health care agreements of
HMOs at a time they were already known as such, belies any legislative intent to impose it on them.
As a matter of fact, petitioner was assessed its DST liability only on January 27, 2000, after more
than a decade in the business as an HMO.
In view of petitioners availment of the benefits of [RA 9840], and without conceding the merits of this
case as discussed above, respondent concedes that such tax amnesty extinguishes the tax liabilities
of petitioner.
21 Our Insurance Code was based on California and New York laws. When a statute has been
adopted from some other state or country and said statute has previously been construed by the
courts of such state or country, the statute is deemed to have been adopted with the construction
given.
Posted by Draft Inger at 11:53 PM 0 Comments
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Labels: digests, Insurance, Law
Enriquez v Sunlife November 29, 1920 G.R. No. L-
15895
Malcolm, J.:

Facts:
This is an action brought by the plaintiff ad administrator of the estate of the late Joaquin Ma. Herrer
to recover from the defendant life insurance company the sum of pesos 6,000 paid by the deceased
for a life annuity. The trial court gave judgment for the defendant. Plaintiff appeals.
Joaquin Herrer made application to the Sun Life Assurance Company of Canada through its office in
Manila for a life annuity. Two days later he paid the sum of P6,000 to the manager of the companys
Manila office and was given a receipt. The application was given to the head office in Canada. The
oofice gave acceptance by cable on November 26, 1917. The policy was issued on December 4.
The attorney, Mr. Torres then wrote to the Manila office of the company stating that Herrer desired to
withdraw his application. The following day the local office replied to Mr. Torres, stating that the
policy had been issued, and called attention to the notification. This letter was received by Mr. Torres
on the morning of December 21, 1917 and Mr. Herrer died on December 20, 1917.
(Whether on the same day the cable was received notice was sent by the Manila office of Herrer that
the application had been accepted, is a disputed point, which will be discussed later.)

Issue: WON Herrer received notice of acceptance of his application.

Held: No. Judgment reversed.

Ratio:
Sunlife averred that that they prepared the letter on November 26, 1917, and handed it to the local
manager for signature. The manager said that he received the application November 26, 1917. He
said that on the same day he signed a letter notifying Mr. Herrer of this acceptance. They said that
these letters, after being signed, were sent to the chief clerk and placed on the mailing desk for
transmission. The witness could not tell if the letter had every actually been placed in the mails.
The plaintiffs attorney testified to having prepared Herrers will, and his client mentioned his
application for a life annuity. He said that the only document relating to the transaction in his
possession was the provisional receipt. Rafael Enriquez, the administrator of the estate, testified that
he had gone through the effects of the deceased and had found no letter of notification from the
insurance company to Mr. Herrer.
Our deduction from the evidence on this issue must be that the letter of November 26, 1917,
notifying Mr. Herrer that his application had been accepted, prepared, and signed in the local office
of the insurance company and was placed in the ordinary channels for transmission. But this was
never actually mailed and thus was never received by the applicant.
The law that applies here is the Civil Code Art 1802, because the Insurance Act is silent as to the
methods followed to create a contract of insurance. Article 1802, not only describes a contact of life
annuity, but but in two other articles, also gives strong clues as to the proper disposition of the case.
For instance, article 16 of the Civil Code provides that In matters which are governed by special
laws, any deficiency of the latter shall be supplied by the provisions of this Code. The special law on
the subject of insurance is deficient in enunciating the principles governing acceptance, the subject-
matter of the Civil code, if there be any, would be controlling. In the Civil Code is found article 1262
providing that Consent is shown by the concurrence of offer and acceptance with respect to the
thing and the consideration which are to constitute the contract. An acceptance made by letter shall
not bind the person making the offer except from the time it came to his knowledge. The contract, in
such case, is presumed to have been entered into at the place where the offer was made.
The Civil Code rule, that an acceptance made by letter shall bind the person making the offer only
from the date it came to his knowledge avoids uncertainty and tends to security.
Also, U.S. jurisprudence states that the courts who take this view have expressly held that an
acceptance of an offer of insurance not actually or constructively communicated to the proposer
does not make a contract. Only the mailing of acceptance, it has been said, completes the contract
of insurance.
The law applicable to the case is found to be the second paragraph of article 1262 of the Civil Code
providing that an acceptance made by letter shall not bind the person making the offer except from
the time it came to his knowledge. Also, that according to the provisional receipt, three things had to
be accomplished by the insurance company before there was a contract: (1) There had to be a
medical examination of the applicant; (2) there had to be approval of the application by the head
office of the company; and (3) this approval had in some way to be communicated by the company
to the applicant. The further admitted facts are that the head office in Montreal did accept the
application, did cable the Manila office to that effect, did actually issue the policy and did actually
write the letter of notification and place it in the usual channels for transmission to the addressee.
The fact as to the letter of notification thus fails to concur with the essential elements of the general
rule pertaining to the mailing and delivery of mail matter as announced by the American courts,
namely, when a letter or other mail matter is addressed and mailed with postage prepaid there is a
rebuttable presumption of fact that it was received by the addressee as soon as it could have been
transmitted to him in the ordinary course of the mails. But if any one of these elemental facts fails to
appear, it is fatal to the presumption. For instance, a letter will not be presumed to have been
received by the addressee unless it is shown that it was deposited in the post-office, properly
addressed and stamped.
The contract for a life annuity was not perfected because it has not been proved satisfactorily that
the acceptance of the application ever came to the knowledge of the applicant.

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