VIRGINIA PEREZ VS BF LIFEMAN INSURANCE GR NO. 112329, JANUARY 28, 2000 FACTS: Primitivo B.

Perez had been insured with the BF Lifeman Insurance Corporation for P20,000.00. Sometime in October 1987, an agent of the insurance corporation, visited Perez in Quezon and convinced him to apply for additional insurancecoverage of P50,000.00. Virginia A. Perez, Primitivos wife, paid P2,075.00 to the agent. The receipt issued indicated the amount received was a "deposit." Unfortunately, the agent lost the application form accomplished by Perez and he asked the latter to fill up another application form. The agent sent the application for additional insurance of Perez to the Quezon office. Such was supposed to forwarded to the Manila office. Perez drowned. His application papers for the additional insurance of P50,000.00 were still with the Quezon. It was only after some time that the papers were brought to Manila. Without knowing that Perez died, BF Lifeman Insurance Corporation approved the application and issued the corresponding policy for the P50,000.00. Petitioner Virginia Perez went to Manila to claim the benefits under the insurancepolicies of the deceased. She was paid P40,000.00 under the first insurance policy for P20,000.00 but the insurance company refused to pay the claim under the additional policy coverage of P50,000.00, the proceeds of which amount to P150,000.00. The insurance company maintained that the insurance for P50,000.00 had not been perfected at the time of the death of Primitivo Perez. Consequently, the insurancecompany refunded the amount paid. BF Lifeman Insurance Corporation filed a complaint against Virginia Perez seeking the rescission and declaration of nullity of the insurance contract in question. Petitioner Virginia A. Perez, on the other hand, averred that the deceased had fulfilled all his prestations under the contract and all the elements of a valid contract are present. On October 25, 1991, the trial court rendered a decision in favor of petitioner ordering respondent to pay 150,000 pesos. The Court of Appeals, however, reversed the decision of the trial court saying that the insurance contract for P50,000.00 could not have been perfected since at the time that the policy was issued, Primitivo was already dead. Petitioners motion for reconsideration having been denied by respondent court, the instant petition for certiorari was filed on the ground that there was a consummated contract of insurance between the deceased and BF Lifeman Insurance Corporation. ISSUE: Whether or not the widow can receive the proceeds of the 2nd insurance policy RULING: No. Petition dismissed. Perezs application was subject to the acceptance of private respondent BF LifemanInsurance Corporation. The perfection of the contract of insurance between the deceased and respondent corporation was further conditioned with the following requisites stated in the application form: "there shall be no contract of insurance unless and until a policy is issued on thisapplication and that the said policy shall not take effect until the premium has been paid

and the policy delivered to and accepted by me/us in person while I/We, am/are in good health." BF Lifeman didnt give its assent when it merely received the application form and all the requisite supporting papers of the applicant. This happens only when it gives a policy. It is not disputed, however, that when Primitivo died on November 25, 1987, hisapplication papers for additional insurance coverage were still with the branch office of respondent corporation in Quezon. Consequently, there was absolutely no way the acceptance of the application could have been communicated to the applicant for the latter to accept inasmuch as the applicant at the time was already dead. Petitioner insists that the condition imposed by BF that a policy must have been delivered to and accepted by the proposed insured in good health is potestative, being dependent upon the will of the corporation and is therefore void. The court didnt agree. A potestative condition depends upon the exclusive will of one of the parties and is considered void. The Civil Code states: When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. The following conditions were imposed by the respondent company for the perfection of the contract of insurance: a policy must have been issued, the premiums paid, and the policy must have been delivered to and accepted by the applicant while he is in good health. The third condition isnt potestative, because the health of the applicant at the time of the delivery of the policy is beyond the control or will of the insurance company. Rather, the condition is a suspensive one whereby the acquisition of rights depends upon the happening of an event which constitutes the condition. In this case, the suspensive condition was the policy must have been delivered and accepted by the applicant while he is in good health. There was non-fulfillment of the condition, because the applicant was already dead at the time the policy was issued. As stated above, a contract of insurance, like other contracts, must be assented to by both parties either in person or by their agents. So long as an application forinsurance has not been either accepted or rejected, it is merely an offer or proposalto make a contract. The contract, to be binding from the date of application, must have been a completed contract. The insurance company wasnt negligent because delay in acting on the applicationdoes not constitute acceptance even after payment. The corporation may not be penalized for the delay in the processing of the application papers due to the fact that process in a week wasnt the usual timeframe in fixing the application. Delay could not be deemed unreasonable so as to constitute gross negligence. SUNLIFE ASSURANCE COMPANY OF CANADA vs. The Hon. COURT OF APPEALS and Spouses ROLANDO and BERNARDA BACANI G.R. No. 105135 June 22, 1995

FACTS:

April 15, 1986: Robert John B. Bacani procured a life insurance contract for himself from SUNLIFE (petitioner) valued at P100K. The designated beneficiary was his mother, Bernarda Bacani (respondent).

June 26, 1987: the insured died in a plane crash. Bernarda Bacani filed a claim with Sunlife, seeking the benefits of the insurance policy taken by her son. Petitioner conducted an investigation and its findings prompted it to reject the claim on the ground that the insured did not disclose facts material to the issuance of the policy. The insured gave false statements in the application when he answered in the negative to the question have you ever had or sought advice for urine, kidney, bladder disorder?

Sunlife discovered that two weeks prior to the issuance, insured was diagnosed with renal failure, was confined, and underwent tests.

November 17, 1988: Bacani and her husband filed for specific performance against Sunlife. RTC granted the plea on the ground that that the facts concealed by the insured were made in good faith and under the belief that they need not be disclosed, and that the disclosure was not material since the policy was non-medical.

Sunlife appealed to the CA, but the latter denied the appeal on the ground that the cause of death was unrelated to the facts concealed by the insured.

ISSUE:

Whether or not the concealment renders the insurance policy rescissible.

RULING:

Yes. The terms of the contract are clear. The insured is specifically required to disclose to the insurer matters relating to his health.

SEC. 26 (IC) A neglect to communicate that which a party knows and ought to communicate, is called a concealment. SEC. 31 (IC) 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 information which the insured failed to disclose was material and relevant to the approval and the 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.

Good faith is no defense in concealment. It appears that such concealment was deliberate on the part of the insured. 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.

PHILAMCARE HEALTH SYSTEMS, INC. vs. COURT OF APPEALS and JULITA TRINOS G.R. No. 125678 March 18, 2002

FACTS:

Ernani TRINOS, deceased husband of respondent Julita, applied for a health care coverage with Philamcare Health Systems, Inc. In the standard application form, 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? (If Yes, give details).

The application was approved for period of one year; upon termination, it was extended for another 2 years. Amount of coverage was increased to a maximum sum of P75,000 per disability.

During this period, Ernani suffered a HEART ATTACK and was confined at the Manila Medical Center (MMC) for one month. While her husband was in the hospital, Julita tried to claim the hospitalization benefits.

Petitioner treated the Health Care Agreement (HCA) as void since there was a concealment regarding Ernanis medical history. Doctors at the MMC allegedly discovered at the time of his confinement, he was hypertensive, diabetic and asthmatic. Julita then paid the hospitalization expenses herself, amounting to about P76,000.

After her husband died, Julita instituted action for damages against Philamcare and its Pres. After trial, the lower court ruled in her favor and ordered Philamcare to reimburse medical and hospital coverage amounting to P76,000 plus interest, until fully paid; pay moral damages of P10,000; pay exemplary damages of P10,000; attys fees of P20,000.

CA affirmed the decision of the trial court but deleted all awards for damages and absolved petitioner Reverente.

ISSUE:

Whether or not the HCA can be invalidated on the basis of alleged concealment

RULING:

No. 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; since in such case 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. The right to rescind should be exercised previous to the commencement of an action on the contract. No rescission was made. Besides, the cancellation of health care agreements as in insurance policies requires: (a) Prior notice of cancellation to insured; (b) Notice must be based on the occurrence after effective date of the policy of one or more of the grounds mentioned; (c) Must be in writing, mailed or delivered to the insured at the address shown in the policy; (d) 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.

These conditions have not been met. When the terms of insurance contract contain limitations on liability, courts should construe them in such a way as to preclude insurer from noncompliance of obligation. Being a contract of adhesion, terms of an insurance contract are to be construed strictly against the party which prepared it the insurer.

Also, Philamcare had 12 months from the date of issuance of the Agreement within which to contest the membership of the patient if he had previous ailment of asthma, and six months from the issuance of the agreement if the patient was sick of diabetes or hypertension.

The health care agreement is in the nature of a contract of indemnity. Hence, payment should be made to the party who incurred the expenses. It is clear that respondent paid all the hospital and medical bills; thus, she is entitled to reimbursement.

PERLA COMPANIA DE SEGUROS, INC. vs. THE COURT OF APPEALS, HERMINIO LIM and EVELYN LIM G.R. No. 96452 May 7, 1992

FACTS:

Spouses Lim purchased a brand new red Ford Laser car from Supercars, Inc. in a sale by installment secured by a chattel mortgage. The same car is insured with Perla Compania de Seguros (Perla). On the same day, Supercars, Inc. assigned its rights, title and interest to FCP Credit Corporation (FCP).

On a later date, the vehicle was car napped. Spouses Lim filed a claim for loss with Perla but this was denied on the ground that Evelyn Lim, who was using the vehicle before it was car napped, was in possession of an expired drivers license at the time of the loss, in violation of the authorized driver clause of the insurance policy.

ISSUE:

Whether or not Perla is liable despite the alleged violation of the authorized driver clause in the insurance contract

RULING:

The Supreme Court held that Perla is liable to pay the insurance claim.The comprehensive motor car insurance policy issued by Perla covered loss or damage to the car: (a) xxx; (b) by fire, external explosion, self-ignition or lightning or burglary, housebreaking or theft; (c) xxx.

Where a car is admittedly unlawfully and wrongfully taken without the owners consent or knowledge, such taking constitutes theft, and therefore, it is the THEFT clause, and not the AUTHORIZED DRIVER clause that should apply.

The Court of Appeals was correct in holding that: Theft is an entirely different legal concept from that of accident. Theft is committed by a person with the intent to gain or, to put it in another way, with the concurrence of the doers will. On the other hand, accident, although it may proceed or result from negligence, is the happening of an event without the concurrence of the will of the person by whose agency it was caused. (Bouviers Law Dictionary).

Clearly, the risk against accident is distinct from the risk against theft. The authorized driver clause in a typical insurance policy is in contemplation or anticipation of accident in the legal sense in which it should be understood, and not in contemplation or anticipation of an event such as theft. The distinction often seized upon by insurance companies in resisting claims from their assureds between death occurring as a result of accident and death occurring as a result of intent may, by analogy, apply to the case at bar. Thus, if the insured vehicle had figured in an accident at the time she drove it with an expired license, then, appellee Perla Compania could properly resist appellants claim for indemnification for the loss or destruction of the vehicle resulting from the accident. But in the present case, the loss of the insured vehicle did not result from an accident where intent was involved; the loss in the present case was caused by theft, the commission of which was attended by intent.

There is no causal connection between the possession of a valid drivers license and the loss of a vehicle. To rule otherwise would render car insurance practically a sham since an insurance company can easily escape liability by citing restrictions which are not applicable or germane to the claim, thereby reducing indemnity to a shadow.