Insular Life v Feliciano Doctrine: Concealment with collusion of insurance agent Facts: 1.

Evaristo Feliciano, who died on September 29, 1935, had a life insurance policy with Insular life 2. He was suffering with advanced pulmonary tuberculosis when he signed his applications for insurance with the petitioner on October 12, 1934. 3. On that same date Doctor Trepp, who had taken X-ray pictures of his lungs, informed the respondent Dr. Serafin D. Feliciano, brother of Evaristo, that the latter "was already in a very serious ad practically hopeless condition." 4. Nevertheless the question contained in the application "Have you ever suffered from any ailment or disease of the lungs, pleurisy, pneumonia or asthma?" appears to have been answered , "No" 5. The false answer above referred to, as well as the others, was written by the Company's soliciting agent Romulo M. David, in collusion with the medical examiner Dr. Gregorio Valdez who was bribed by David with the advanced premium of the insured 6. This is so Insular life will approve the application and David will get credit for the solicitation, since Insular Life had a prize for their agent with the most solicitation. 7. It seems also that the insured had told both David and Valdez that he had gone three times to the Santol Sanatorium and had X-ray pictures of his lungs taken; but that in spite of such information the agent and the medical examiner told them that the applicant was a fit subject for insurance.
Issue: issue whether or not there was concealment, and the collusion with the insurance agent? Held: Yes there is, Policy Void Ab Initio, refund Premium 1. The insured signed the application in blank, this act in effect thereby giving David, the agent, and Valdez, the medical examiner" the authority to write what they wrote in the application, they became his agents and cannot escape the responsibility of their actions. 2. He also paid the agent in advance despite the statement in the contract "That the agent taking this application has no authority to make, modify or discharge contracts, or to waive any of the Company's rights or requirements" and "the Company shall not be bound by any promise or representation heretofore or hereafter given by any person other than the above-named officials, and by them only in writing and signed conjointly as stated." 3. Also the statement, "and the policy has been delivered to and accepted by me, while I am in good health." In addition to the two stated above proves that he was aware of the concealment and he was conniving with both medical examiner and agent. 4. He cannot hide responsibility by saying he could not or did not read the photo copy of the applications, he must have noticed the answers was false, also since he subscribed "My acceptance of any policy issued on this application will constitute a ratification by me of any corrections in or additions to this application made by the Company . . ."

Concur, Yulo

The subject of the insurance policies under consideration is the life of the assured. It is contended by his beneficiaries that they took these policies on the basis of a life expectancy of a person gravely stricken with tuberculosis. They have consistently made protestations that they had so informed the agents of the insurance company. But the policies were issued upon the life of the assured, as a perfectly normal and healthy person. The error is vital and goes to the very existence of the contract itself. Who is responsible for the error? The direct cause, of course, is the false recitals in the application for insurance. While it is true that it was the agents of the insurance company who filled out such application, yet it was the assured who, by signing the application in blank, made it possible for the said agents to procure the issuance of the policies on the basis of false information, in order to suit their own purposes. Upon the admitted facts, I am of the opinion that in justice and in equity, the responsibility for the falsifications made by the insurance agents in the preparation of the insurance application should be laid at the door of the assured and his beneficiaries. Dissent, Hontiveros The mere fact that the insured signed at the bottom of the application for insurance when some of its lines intended for answers to certain questions were still in blank, answers which according to the evidence and to the findings of the two inferior courts he had grounds to believe will be made in accordance with the information which he and his family had given to agent David and to Dr. Valdez, does not convert these two persons into agents of the insured in a way as to make the latter responsible for the acts of the former. That the photostatic copies of said forms which are attached to the policies object of this case are almost illegible, is a fact which should be taken into account, together with the other fact that Evaristo Feliciano does not know English, the language in which those documents are written.