Philamcare Health Systems Inc. vs.

CA and Julita Trinos, GR 125678, March 18, 2002

FACTS:
When Ernani Trinos applied for a health care coverage with Philamcare which the latter
approved, he answered no to the question: Have you or any of your family members ever
consulted or been treated for high blood pressure, heart trouble, diabetes, cancer, liver disease,
asthma or peptic ulcer?
Under the Health Care Agreement, Ernani was entitled to hospitalization and outpatient
benefits.
Later, Ernani suffered a heart attack
While Ernani was in the hospital, Julita (not his legal wife) tried to claim the benefits under
the health care agreement.
Philamcare denied her claim stating that the Health Care Agreement was void because there
was a concealment regarding Ernanis medical history since the doctors discovered at the
time of confinement that he was hypertensive, diabetic and asthmatic, contrary to his answer
in the application form.
Julita paid all expenses in the hospitalization.
After Ernani died, Julita filed an action for damages against Philamcare and its president
and asked for reimbursement of her expenses
RTC ruled in favor of Julita. CA affirmed RTCs ruling but absolved the president of
Philamcare.
ISSUES:
1. Whether Julita is entitled to the reimbursement even though she is not the legal wife of
Ernani
2. Whether Ernanis concealment of his medical history will render the Health Care Agreement
void
RULING:
1. YES. Julita paid all the hospital expenses, and therefore entitled to reimbursement.
The health care agreement is in the nature of a contract of indemnity.
2. NO. Ernani answered the application in good faith. Where matters of opinion or judgment
are called for, answers made in good faith and without intent to deceive will not avoid a policy
even though they are untrue
The insurer is not justified in relying upon such statement, but is obligated to make
further inquiry.
The fraudulent intent on the part of the insured must be established to warrant
rescission of the insurance contract.
Concealment as a defense for the health care provider or insurer to avoid liability is
an affirmative defense and the duty to establish such defense by satisfactory and
convincing evidence rests upon the provider or insurer.
o In this case, defense of concealment can no longer lie since the period for
contesting Ernanis membership has expired
NOTES:
The cancellation of health care agreements as in insurance policies require the concurrence of the following
conditions:

Prior notice of cancellation to insured;

Notice must be based on the occurrence after effective date of the policy of one or more of the grounds
mentioned;
Must be in writing, mailed or delivered to the insured at the address shown in the policy;
Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of
insured, to furnish facts on which cancellation is based.