Ng v Asian Crusader J. Escolin: Facts: Kwong Nam applied for a 20- ear endowment insurance on !

is life for t!e sum of "20#000.00# wit! !is wife# appellee Ng $an %ee as &eneficiar . 'n t!e same date# Asian Crusader# upon receipt of t!e re(uired premium from t!e insured# approved t!e application and issued t!e corresponding polic . Kwong Nam died of cancer of t!e liver wit! metastasis. All premiums !ad &een paid at t!e time of !is deat!. Ng $an %ee presented a claim for pa ment of t!e face value of t!e polic . 'n t!e same date# s!e su&mitted t!e re(uired proof of deat! of t!e insured. Appellant denied t!e claim on t!e ground t!at t!e answers given & t!e insured to t!e (uestions in !is application for life insurance were untrue. Appellee &roug!t t!e matter to t!e attention of t!e )nsurance Commissioner. *!e latter# after conducting an investigation# wrote t!e appellant t!at !e !ad found no material concealment on t!e part of t!e insured and t!at# t!erefore# appellee s!ould &e paid t!e full face value of t!e polic . *!e compan refused to settle its o&ligation. Appellant alleged t!at t!e insured was guilt of misrepresentation w!en !e answered +No+ to t!e following (uestion appearing in t!e application for life insurance,as an life insurance compan ever refused our application for insurance or for reinstatement of a lapsed polic or offered ou a polic different from t!at applied for- )f# so# name compan and date. *!e lower court ruled against t!e compan on lac. of evidence. Appellant furt!er maintains t!at w!en t!e insured was e/amined in connection wit! !is application for life insurance# !e gave t!e appellant0s medical e/aminer false and misleading information as to !is ailment and previous operation. *!e compan contended t!at !e was operated on for peptic ulcer 2 ears &efore t!e polic was applied for and t!at !e never disclosed suc! an operation. )ssue: 1'N Asian Crusader was deceived into entering t!e contract or in accepting t!e ris. at t!e rate of premium agreed upon &ecause of insured0s representation,eld: No. "etition dismissed. 2ection 23 of t!e )nsurance 4aw:

2ec. 23. 2uc! part a contract of insurance must communicate to t!e ot!er# in good fait!# all facts wit!in !is .nowledge w!ic! are material to t!e contract# and w!ic! t!e ot!er !as not t!e means of ascertaining# and as to w!ic! !e ma.es no warrant .

+Concealment e/ists w!ere t!e assured !ad .nowledge of a fact material to t!e ris.# and !onest # good fait!# and fair dealing re(uires t!at !e s!ould communicate it to t!e assurer# &ut !e designedl and intentionall wit!!olds t!e same.+ )t !as also &een !eld +t!at t!e concealment must# in t!e a&sence of in(uiries# &e not onl material# &ut fraudulent# or t!e fact must !ave &een intentionall wit!!eld.+ Fraudulent intent on t!e part of t!e insured must &e esta&lis!ed to entitle t!e insurer to rescind t!e contract. And as correctl o&served & t!e lower court# +misrepresentation as a defense of t!e insurer to avoid lia&ilit is an 0affirmative0 defense. *!e dut to esta&lis! suc! a defense & satisfactor and convincing evidence rests upon t!e defendant. *!e evidence &efore t!e Court does not clearl and satisfactoril esta&lis! t!at defense.+ )t &ears emp!asis t!at Kwong Nam !ad informed t!e appellant0s medical e/aminer of t!e tumor. ,is statement t!at said tumor was +associated wit! ulcer of t!e stomac!+ s!ould &e construed as an e/pression made in good fait! of !is &elief as to t!e nature of !is ailment and operation. 1!ile t!e information communicated was imperfect# t!e same was sufficient to !ave induced appellant to ma.e furt!er in(uiries a&out t!e ailment and operation of t!e insured. 2ection 52 of )nsurance 4aw: 2ection 52. *!e rig!t to information of material facts ma &e waived eit!er & t!e terms of insurance or & neglect to ma.e in(uiries as to suc! facts w!ere t!e are distinctl implied in ot!er facts of w!ic! information is communicated. 1!ere a (uestion appears to &e not answered at all or to &e imperfectl answered# and t!e insurers issue a polic wit!out an furt!er in(uir # t!e waive t!e imperfection of t!e answer and render t!e omission to answer more full immaterial. *!e compan or its medical e/aminer did not ma.e an furt!er in(uiries on suc! matters from t!e !ospital &efore acting on t!e application for insurance. *!e fact of t!e matter is t!at t!e defendant was too eager to accept t!e application and receive t!e insured0s premium. )t would &e ine(uita&le now to allow t!e defendant to avoid lia&ilit under t!e circumstances.+