EGUARAS vs. GREAT EASTERN LIFE ASSURANCE COMPANY, LTD.

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G.R. No. L-10436. January 24, 1916
En Banc. TORRES, J.
FACTS:
Insured: Dominador Albay
Beneficiary: Francisca Eguaras (Insured’s mother-in-law)
Insurer: The Great Eastern Life Assurance Company, Ltd.
Product: Life Insurance worth Php5,000, issued Nov 6, 1912.
Dominador took out an insurance policy from Insurer through its agent, Ponciano Remigio. Dominador
was sick at the time (intestinal complications) he applied for the policy and the agent knew about this. So in order
to close the deal, Remigio presented another person (Castor Garcia) pretending to be Dominador during the
required medical examination. Dominador died a month later, so Francisca Eguaras filed a claim for the insurance
policy. The insurance company refused to yield to the claims of the beneficiary of the policy, so Eguaras filed a
complaint with CFI Laguna.
CFI Laguna ruled in favor of petitioner, to pay Php5,000 + Php1,000 for damages. Upon appeal, the
company argued that it refused to pay the claimant because they found out that the policy had been fraudulently
applied for. It found that their agent knew that the insured had a serious medical condition before application. In
the application, Dominador had answered that he had a “good constitution” health wise. Remigio then engaged
the services of Dr. Jose Vidal supposedly to examine Dominador but because of his knowledge of the latter’s less
than normal medical standing, he presented a different person for physical examination.
During trial, Dr. Vidal confirmed the identity of the person purporting to be Dominador. Several witnesses
also testified regarding the seriousness of Dominador’s health prior to his death such as Dr. Gertrudo Reyes and
one Jose Valencia. Because of this, CFI still ruled in favor of defendant. Hence this petition (through bill of
exceptions).
ISSUES/HELD/RATIO
1. W/N insurance policy was legal & valid – No, insurance policy is void for being issued through fraud & deceit.
- The contract was fraudulently closed.
- SC further examined other documents and details pertaining to the constitution of fraud
o SC compared the signatures of the real Dominador from previous documents and that of Castor Garcia
on the medical form. Dominador had a firm and solid handwriting, culled from years of education in
American schools, unlike Castor Garcia.
o SC also examined Dominador’s signature on his electoral oath, which was signed before the board of
election inspectors. It was radically different from that seen on the medical examination sheet.
o Also, his age on the application and insurance policy was 40 years old in 1912 while in his personal cedulas
later on, he was only 32 in 1911.
- Article 1269, CC: There is deceit when by words or insidious machinations on the part of one of the
contracting parties the other is induced to execute a contract which without them he would not have made.
- It is essential that deceit be made prior to or contemporaneous with the consent necessary to perfect a
contract.
- The company in this case was induced by the result of the medical examination and the recommendation of
Remigio. The contract therefore, is void and ineffective in accordance with the provisions of the civil code.
o Had Dominador not been substituted, the physician would not have been able to identify Castor Garcia
as the person he examined on trial.
o Remigio had resorted to fraudulent means in order to secure the payment for the policy and although it
does not constitute a crime, the contract is still void.
- Thus, Petitioner could not claim the proceeds of such policy.
JUDGMENT: Judgment of CFI Laguna REVERSED.
NOTES & DICTA:
Although Remigio and Eguaras were previously tried and acquitted for the crime of estafa, the acquittal does not
produce the effect of res judicata. The contract was still void for the vitiation of the company’s consent through
fraud.