RAFAELENRIQUEZ,asadministratoroftheestateofthelateJoaquinMa.

Herrer,plaintiffappellant,
vs.
SUNLIFEASSURANCECOMPANYOFCANADA,defendantappellee.

Principle:

Anacceptanceofanofferofinsurancenotactuallyorconstructivelycommunicated
totheproposerdoesnotmakeacontract.Onlythemailingofacceptance,ithasbeen
said,completesthecontractofinsurance,asthelocuspoenitentiaeisendedwhenthe
acceptancehaspassedbeyondthecontroloftheparty.

Facts:

JoaquinHerrermadeapplicationtotheSunLifeAssuranceCompanyofCanada
throughitsofficeinManilaforalifeannuity.HepaidthesumofP6,000tothe
managerofthecompany'sManilaofficeandwasissuedaprovisionalreceipt.

Theapplicationwasimmediatelyforwardedtotheheadofficeofthecompanyat
Montreal,Canada.TheheadofficegavenoticeofacceptancebycabletoManila.On
December 4, 1917, the policy was issued at Montreal. On December 18, 1917,
attorneyAurelioA.TorreswrotetotheManilaofficeofthecompanystatingthat
Herrerdesiredtowithdrawhisapplication.Thefollowingdaythelocalofficereplied
thatthepolicyhadbeenissued.ThisletterwasreceivedbyMr.TorresonDecember
21,1917.Mr.HerrerdiedonDecember20,1917.

Issue:

WhetherHerrerreceivednoticeofacceptanceofhisapplication.

Defendantsposition:

Thelocalmanager,Mr.White,testifiedtohavingreceivedthecablegramaccepting
theapplicationofMr.HerrerfromthehomeofficeonNovember26,1917.Hesaid
thatonthesamedayhesignedaletternotifyingMr.Herrerofthisacceptance.

Plaintiffsposition:

AttorneyManuelTorrestestifiedtohavingpreparedthewillofJoaquinMa.Herrer,
thatonthisoccasion,Mr.Herrermentionedhisapplicationforalifeannuity,and
thathesaidthattheonlydocumentrelatingtothetransactioninhispossession
was the provisional receipt. Rafael Enriquez, the administrator of the estate,
testifiedthathehadgonethroughtheeffectsofthedeceasedandhadfoundno
letterofnotificationfromtheinsurancecompanytoMr.Herrer.

Held:

TheletterofNovember26,1917,notifyingMr.Herrerthathisapplicationhadbeen
accepted,waspreparedandsignedinthelocalofficeoftheinsurancecompany,was
placedintheordinarychannelsfortransmission,butasfarasweknow,wasnever
actuallymailedandthuswasneverreceivedbytheapplicant.

WhiletheInsuranceActdealswithlifeinsurance,itissilentastothemethodsto
befollowedinorderthattheremaybeacontractofinsurance.Ontheotherhand,
theCivilCodemaybeappliedtosupplyanydeficiencyfoundinInsuranceAct.

Article1262oftheCivilCodeprovidesthat"Consentisshownbytheconcurrenceof
offerandacceptancewithrespecttothethingandtheconsiderationwhichareto
constitute the contract. An acceptance made by letter shall not bind the person
makingtheofferexceptfromthetimeitcametohisknowledge.Thecontract,in
suchcase,ispresumedtohavebeenenteredintoattheplacewheretheofferwas
made."

The Civil Code rule, that an acceptance made by letter shall bind the person
makingtheofferonlyfromthedateitcametohisknowledge,maynotbethebest
expression of modern commercial usage. Still it must be admitted that its
enforcementavoidsuncertaintyandtendstosecurity.Anacceptanceofanofferof
insurance not actually or constructively communicated to the proposer does not
makeacontract.Onlythemailingofacceptance,ithasbeensaid,completesthe
contractofinsurance,asthelocuspoenitentiaeisendedwhentheacceptancehas
passedbeyondthecontroloftheparty.(IJoyce,TheLawofInsurance,pp.235,
244.)

Thesecondparagraphofarticle1262oftheCivilCodeprovidesthatanacceptance
madebylettershallnotbindthepersonmakingtheofferexceptfromthetimeit
came to his knowledge. The pertinent fact is, that according to the provisional
receipt,threethingshadtobeaccomplishedbytheinsurancecompanybeforethere
wasacontract:(1)Therehadtobeamedicalexaminationoftheapplicant;(2)there
hadtobeapprovaloftheapplicationbytheheadofficeofthecompany;and(3)this
approvalhadinsomewaytobecommunicatedbythecompanytotheapplicant.The
further admitted facts are that the head office in Montreal did accept the
application,didcabletheManilaofficetothateffect,didactuallyissuethepolicy
anddid,throughitsagentinManila,actuallywritetheletterofnotificationand
placeitintheusualchannelsfortransmissiontotheaddressee.

Wehold,however,thatthecontractforalifeannuityinthecaseatbarwasnot
perfectedbecauseithasnotbeenprovedsatisfactorilythattheacceptanceofthe
applicationevercametotheknowledgeoftheapplicant.