Concealment – Sec.

26, ICP
Waiver & Estoppel
Edillon v. Manila Bankers Life,117 SCRA 187
FACTS:

Carmen Lapuz had an insurance policy with Manila Bankers Life Insurance Corp, with her sister, Regina
Edillon, as beneficiary. Carmen was 65, y.o. at the time of application. She also paid the premiums and
the insurer issued the certificate of insurance. This notwithstanding that the exclusionary condition in
the policy, i.e. the insurer should not be held liable to pay claims under the policy in behalf of “persons
who are under the age of sixteen (16) years of age or over the age of sixty (60) years.” 45 days after said
application for insurance, Carmen died in a vehicular accident. Thus, Regina filed a claim with Manila
Bankers. The latter refused on the ground that Carmen was already over 60 years old at the time of her
application for insurance.

Regina filed an action before the CFI for the recovery of proceeds.

The CFI ruled against Edillon, holding that Manila Bankers was not liable. The CA certified the case to SC.
The SC reversed.

ISSUE:

Whether or not the acceptance by the insurance corporation of the premium and the issuance of the
corresponding certificate of insurance should be deemed a waiver of the exclusionary condition of
coverage stated in the policy.

HELD:

YES.

Manila Bankers is estopped. Carmen did not conceal her real age. It was clearly indicated that she was
65 y.o. at the time of filing the application for insurance. Such information was prominent and material
to the application. Yet, Manila Bankers issued the certificate of insurance without question upon
Carmen’s payment of the premium.

As Carmen died 45 days after her application for insurance, Manila Bankers had enough time to process
the application and notice that Carmen was over 60 y.o., it could have cancelled the policy but it did not.
If Manila Bankers failed to act, it is either because it was willing to waive such disqualification; or,
through the negligence or incompetence of its employees for which it has only itself to blame, it simply
overlooked such fact. Under the circumstances, the insurance corporation is already deemed in
estoppel. Such inaction constitutes waiver of the exclusionary condition.