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Emilio Tan v CA and american insurance
Violeta Lalican v Insular Life Assurance
New Life Enterprise and sy v CA
Manulife Philppines v Hermegilda
Sun life of canada v Daisy Sibya
Insular Life Assurance v Paz Khu
EMILIO TAN vs. COURT OF APPEALS G.R. No. 48049, 29 June 1989
FACTS: Tan Lee Siong, father of herein petitioners, applied for life
insurance in the amount of P80,000.00 with respondent company
Philippine American Life Insurance Company. Said application was
approved and a corresponding policy was issued effective
November 5, 1973, with petitioners as the beneficiaries. On April
26, 1975, Tan Lee Siong died of hepatoma. Hence, petitioners filed
with respondent company their claim for the proceeds of the life
insurance policy. However, the insurance company denied the
said claim and rescinded the policy by reason of the alleged
misrepresentation and concealment of material facts made by the
deceased Tan Lee Siong in his application for insurance. The
premiums paid on the policy were thereupon refunded. The
petitioners contend that the respondent company no longer had
the right to rescind the contract of insurance as rescission must
allegedly be done during the lifetime of the insured within two
years and prior to the commencement of action.
ISSUE: Whether or not the insurance company has the right to
rescind the contract of insurance despite the presence of an
incontestability clause
HELD:
YES. The so-called “incontestability clause” precludes the insurer
from raising the defenses of false representations or concealment
of material facts insofar as health and previous diseases are
concerned if the insurance has been in force for at least two years
during the insured’s lifetime. The phrase “during the lifetime”
found in Section 48 of the Insurance Law simply means that the
policy is no longer considered in force after the insured has died.
The key phrase in the second paragraph of Section 48 is “for a
period of two years”. The policy was issued on November 6, 1973
and the insured died on April 26, 1975. The policy was thus in
force for a period of only one year and five months. Considering
that the insured died before the two-year period has lapsed,
respondent company is not, therefore, barred from proving that
the policy is void ab initio by reason of the insured’s fraudulent
concealment or misrepresentation. Moreover, respondent
company rescinded the contract of insurance and refunded the
premiums paid on November 11, 1975, previous to the
commencement of this action on November 27, 1975.
WHEREFORE, the petition is hereby DENIED for lack of merit. The
questioned decision of the Court of Appeals is AFFIRMED.
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Violeta R. Lalican v. Insular Life Assurance Co. Ltd.
Facts:
Eulogio Lalican applied for an insurance policy with the Insular Life
amounting to Php 1,500,000. Under the terms of the policy,
Eulogio was to pay the premiums on a quarterly basis, having a
grace period of 31 days, for the payment of each premium
subsequent to the first. If any premium was not paid on or before
the due date, the policy would be in default and if the premium
remained unpaid until the end of the grace period, the policy
would automatically lapse and become void. Eulogio paid the
premiums due on the first two succeeding payment dates but
failed to pay subsequent premiums even after the lapse of the
grace period thereby rendering the policy void. He submitted an
application for reinstatement of policy through Josephine
Malaluan, an agent of Insular Life, together with the payment of
the unpaid premiums. However, the Insular Life notified him that
his application could not be processed because he failed to pay
the overdue interest of the unpaid premiums. On Sept. 17, 1998,
Eulogio submitted to Malaluan's house a second application for
reinstatement including the payment for the overdue interest as
well as for the premiums due for April and July of that year, which
was received by Malaluan's husband on her behalf and was
thereby issued a receipt for the amount Eulogio deposited.
However, on that same day, Eulogio died of cardio-respiratory
arrest secondary to electrocution. Violeta, Eulogio's widow filed
with the Insular Life a claim for payment of the full proceeds of
the policy but the latter informed her that the claim could not be
granted since at the time of Eulogio's death, his policy has already
lapsed and he failed to reinstate the same. Violeta requested a
reconsideration of her claim but the same was also rejected.
Therefore, she filed a complaint for death claim benefits with the
RTC alleging the unfair claim settlement practice of Insular Life
and its deliberate failure to act with reasonable promptness on
her insurance claim. The trial court rendered a decision in favour
of Insular Life and after the former denied her motion for
reconsideration, she directly elevated her case to the Supreme
Court via the petition for review on Certiorari.
Issue:
Whether or not the policy of Eulogio was reinstated before his
death.
Ruling:
Petition lacks merit. RTC's decision has long acquired finality for
Violeta failed to file a notice of appeal more than five months
after the decision was rendered. As to the substantial claim of
whether there is insurable interest, the Court says that the matter
of insurable interest is entirely irrelevant and the real point of
contention herein is whether Eulogio was able to reinstate the
lapsed insurance policy on his life before his death. The Court
rules in the negative, for the insurance policy is clear on the
procedure of the reinstatement of the insurance contract, of
which Eulogio has failed to accomplish before his death. As
provided by the policy, insurance shall be deemed reinstated
upon the approval of
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New Life v CA G.R. No. 94071 March 31, 1992
J. Regalado
Facts:
Julian Sy, owner of New Life, insured his building in 3 different
insurance agencies for 350,000, 1,000,000, and 200,000. When his
building and the goods inside burned down, he claimed for
insurance indemnities, but these were rejected by the three
companies for violation of policy conditions.
Sy filed for 3 different suits in the trial court, where he won all
suits against the insurance companies. The court of appeals
reversed the decision of the trial court.
Issue: Did the petitioner violate conditions 3 and 27 of the three
insurance policies, thereby foreiting collection of indemnities?
Held: Yes.
Ratio:
Condition 3. The insured shall give notice to the Company of any
insurance or insurances already effected, or which may
subsequently be effected, covering any of the property or
properties consisting of stocks in trade, goods in process and/or
inventories only hereby insured, and unless such notice be given
and the particulars of such insurance or insurances be stated
therein or endorsed on this policy pursuant to Section 50 of the
Insurance Code, by or on behalf of the Company before the
occurrence of any loss or damage, all benefits under this policy
shall be deemed forfeited, provided however, that this condition
shall not apply when the total insurance or insurances in force at
the time of loss or damage not more than P200,000.00.
Sy never disclosed co-insurance in the contracts he entered into
with the three corporations. The insured is specifically required to
disclose the insurance that he had contracted with other
companies. Sy also contended that the insurance agents knew of
the co-insurance. However, the theory of imputed knowledge,
that the knowledge of the agent is presumed to be known by the
principal, is not enough.
When the words of the document are readily understandable by
an ordinary reader, there is no need for construction anymore.
The conformity of the insured to the terms of the policy is implied
with his failure to disagree with the terms of the contract.
Since Sy, was a businessman, it was incumbent upon him to read
the contracts.
Pioneer Insurance and Surety Corporation vs. Yap- The obvious
purpose of the aforesaid requirement in the policy is to prevent

over-insurance and thus avert the perpetration of fraud. The
public, as well as the insurer, is interested in preventing the
situation in which a fire would be profitable to the insured.
“Also, policy condition 15 was used. It stated: 15.. . . if any false
declaration be made or used in support thereof, . . . all benefits
under this Policy shall be forfeited . . .”
As for condition number 27, the stipulation read:
27. Action or suit clause. — If a claim be made and rejected and
an action or suit be not commenced either in the Insurance
Commission or any court of competent jurisdiction of notice of
such rejection, or in case of arbitration taking place as provided
herein, within twelve (12) months after due notice of the award
made by the arbitrator or arbitrators or umpire, then the claim
shall for all purposes be deemed to have been abandoned and
shall not thereafter be recoverable hereunder.
This is regarding Sy’s claim for one of the companies. Recovery
was filed in court by petitioners only on January 31, 1984, or after
more than one (1) year had elapsed from petitioners' receipt of
the insurers' letter of denial on November 29, 1982. This made it
void.
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Manulife Philppines v Hermegilda
FACTS: •Manulife instituted a Complaint for Rescission of
Insurance Contracts against Ybañez and the BPI Family Savings
Bank (BPI Family). ○It was alleged that the Insurance Policies
which Manulife issued in favor of Dr. Gumersindo Ybañez
(insured), were void due to concealment or misrepresentation of
material facts in the latter's applications for life insurance. ○For
this reason, Manulife accordingly denied Hermenegilda's death
claims and refunded the premiums that the insured paid on the
subject insurance policies. •In her Answer, Hermenegilda
(beneficiary) countered that: ○Manulife's own insurance agent,
Monteclaros assured that there would be no problem regarding
the application for the insurance policy. ○In fact, it was
Monteclaros who filled up everything in the questionnaire, so that
all that the insured needed to do was signed and it's done. ○It was
also Monteclaros who herself checked in advance all the boxes
that the insured was required to answer. ○Manulife accepted the
insured's application, and now that a claim for the benefits is
made, Manulife now says that the insured misrepresented and
concealed his past illnesses. ➢In the form filled up by Dr.
Lumapas, Manulife's company physician, the insured checked the
column which says ''yes" to the question: Have you seen a doctor,
or had treatment operation on hospital case during the last five
years? ○Hermenegilda asserts that Manulife ought to have noted
the fact that the insured was at that time already 65 years old,
that he had a previous operation, and that his health was "below
average.
ISSUE: Whether or not there was concealment.
HELD: No. Manulife failed to prove concealment on the part of
the insured. The RTC correctly held that the medical records that
might have established the insured’s purported
misrepresentation/s or concealment/s was inadmissible for being
hearsay, given the fact that Manulife failed to present the
physician or any responsible official who could confirm or attest
to the due execution and authenticity of the alleged medical
records. For failure of Manulife to prove intent to defraud on the
part of the insured, it cannot validly sue for rescission of insurance
contracts.
Insular Life Assurance v Paz Khu
INSULAR LIFE ASSURANCE COMPANY v. PAZ Y. KHU, GR No.
195176, 2016-04-18
Facts:
On March 6, 1997, Felipe N. Khu, Sr. (Felipe) applied for a life
insurance policy with Insular Life under the latter's Diamond
Jubilee Insurance Plan. Felipe accomplished the required medical
questionnaire wherein he did not declare any illness or adverse
medical condition. Insular Life thereafter issued him Policy
Number A000015683 with a face value of PI million. This took
effect on June 22, 1997.
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On June 23, 1999, Felipe's policy lapsed due to non-payment of
the premium covering the period from June 22, 1999 to June 23,
2000
On September 7, 1999, Felipe applied for the reinstatement of his
policy and paid P25,020.00 as premium
On October 12, 1999, Insular Life advised Felipe that his
application for reinstatement may only be considered if he agreed
to certain conditions such as payment of additional premium and
the cancellation of the riders pertaining to premium waiver and
accidental death benefits. Felipe agreed to these conditions[8]
and on December 27, 1999 paid the agreed additional premium of
P3,054.50
On September 22, 2001, Felipe died
On October 5, 2001, Paz Y. Khu, Felipe Y. Khu, Jr. .and Frederick Y.
Khu (collectively, Felipe's beneficiaries or respondents) filed with
Insular Life a claim for benefit under the reinstated policy. This
claim was denied.
Issues:
Insular Life countered that Felipe did not disclose the ailments
(viz., Type 2 Diabetes Mellitus, Diabetes Nephropathy and
Alcoholic Liver Cirrhosis with Ascites) that he already had prior to
his application for reinstatement of his insurance policy; and that
it would not have reinstated the insurance policy had Felipe
disclosed the material information on his adverse health
condition. It contended that when Felipe died, the policy was still
contestable... whether Felipe's reinstated life insurance policy is
already incontestable at the time of his death.
Ruling:
this Court adopts the interpretation favorable to the insured in
determining the date when the reinstatement was approved.
We deny the Petition.
Based on the foregoing, we find that the CA did not commit any
error in holding that the subject insurance policy be considered as
reinstated on June 22, 1999. This finding must be upheld not only
because it accords with the evidence, but also because this is
favorable to the insured who was not responsible for causing the
ambiguity or obscurity in the insurance contract.
WHEREFORE, the Petition is DENIED. The assailed June 24, 2010
Decision and December 13, 2010 Resolution of the Court of
Appeals in CA-GR. CV No. 81730 are AFFIRMED.
Principles:
that given the obscurity/ambiguity in the language of these two
documents, the construction/interpretation that favors the
insured's right to recover should be adopted; a... that the CA
erred in declaring that resort to the principles of statutory
construction is still necessary to resolve that question given that
the Application for Reinstatement,... The court below is correct.
Given the obscurity of the language, the construction favorable to
the insured will be adopted by the courts.