Ng Gan Zee v.

Asian Crusader Life - Imperfection in the Application Form Kwong Nam was also examined by Asian Crusader’s medical examiner to whom he disclosed that he was once
operated and a tumor was removed from his stomach and such was “associated with ulcer of the stomach.”
122 SCRA 61
Kwong Nam’s application was approved. In May 1963, he died. His widow, Ng Gan Zee, filed an insurance
claim but Asian Crusader refused her claim as it insisted that Kwong Nam concealed material facts from them
when he was applying for the insurance; that he misrepresented the fact that he was actually denied
Facts:
application by Insular Life when he was renewing his application with them; that Kwong Nam was actually
> In 1962, Kwon Nam applied for a 20yr endowment insurance on his life with his wife, Ng Gan Zee as the operated for peptic ulcer.
beneficiary.

> He stated in his application that he was operated on for tumor of the stomach associated with ulcer.
ISSUE: Whether or not Ng Gan Zee can collect the insurance claim.
> In 1963, Kwong died of cancer of the liver with metastasis. Asian refused to pay on the ground of alse
information.
HELD: Yes. Asian Crusader was not able to prove that Kwong Nam’s statement that Insular Life did not deny
> It was found that prior to his application, Kwong was diagnosed to have peptic ulcers, and that during the
his insurance renewal with them is untrue. In fact, evidence showed that in April 1962, Insular Life approved
operation what was removed from Kwong’s body was actually a portion of the stomach and not tumor.
Kwong Nam’s request of reinstatement only with the condition that Kwong Nam’s plan will be lowered from
P50,000.00 to P20,000.00 considering his medical history.

Issue: Kwong Nam did not conceal anything from Asian Crusader. His statement that his operation, in which a tumor
the size of a hen’s egg was removed from his stomach, was only “associated with ulcer of the stomach” and
Whether or not the contract may be rescinded on the ground of the imperfection in the application form. not peptic ulcer can be considered as an expression made in good faith of his belief as to the nature of his
ailment and operation. Indeed, such statement must be presumed to have been made by him without
knowledge of its incorrectness and without any deliberate intent on his part to mislead Asian Crusader.

Held:
NO.
Kwong did not have sufficient knowledge as to distinguish between a tumor and a peptic ulcer. His statement
therefore was made in good faith. Asian should have made an inquiry as to the illness and operation of
Kwong when it appeared on the face of the application that a question appeared to be imperfectly answered.
Asian’s failure to inquire constituted a waiver of the imperfection in the answer.
While it may be conceded that, from the viewpoint of a medical expert, the information communicated was
imperfect, the same was nevertheless sufficient to have induced Asian Crusader to make further inquiries
about the ailment and operation of Kwong Nam. It has been held that where, upon the face of the application,
a question appears to be not answered at all or to be imperfectly answered, and the insurers issue a policy
without any further inquiry, they waive the imperfection of the answer and render the omission to answer
more fully immaterial.

Ng Gan Zee v. Asian Crusader Life - Imperfection in the Application Form

122 SCRA 61

In May 1962, Kwong Nam applied for a 20-year endowment policy with Asian Crusader Life Assurance
Corporation. Asian Crusader asked the following question:

Has any life insurance company ever refused your application for insurance or for reinstatement of a lapsed
policy or offered you a policy different from that applied for? If, so, name company and date.

Kwong Nam answered “No” to the above question.