Insurance Case

Enriquez vs. Sun Life Assurance Company

Facts:
 Sept 24, 1917, Joaquin Herrer made an application to the Sun Life
Assurance Company of Canada for a life annuity.

 He paid 6k to the manager of the Company of Sun Life Assurance in

their Manila Office and was given a receipt.

According to the provisional receipt, 3 things had to be accomplished

by the Insurance Company before there was a contract.

(1) There had to be a medical examination of the applicant.

(2) There had to be approval of the application by the head office of the
company.

(3) This approval had in some way to be communicated by the

company to the applicant.

 November 26 1917, the head office at Montreal, Canada gave notice of

acceptance by cable to Manila but this was not mailed.

 December 4, 1917, Policy was issued at Montreal, Canada.

 December 18, 1917, Atty. Torres, wrote to the Manila Office of the
Company stating that Herrer desired to withdraw his application.

 December 19, 1917, Local office replied to Mr. Torres stating that the
Policy had been issued, called attention the notification of Nov 26
1917.

 December 21, 1917, received the letter by Mr. Torres.

 December 20, 1917, Mr. Herrer died.

  Rafael Enriquez, as administrator of the estate of the late Joaquin
Herrer filed to recover from Sun Life Assurance Company of Canada,
through its office in Manila.

 RTC ruled in favor of Sun Life Assurance.

ISSUE:
Whether or not, Mr. Herrera received notice of acceptance of his
application thereby perfecting his life annuity?

HELD:
No, Judgment Reversed.

Enriquez shall have and recover from the Sun Life, the sum of 6k with legal
interest from November 20, 1918 without special finding as to costs in either
instance.

So ordered.

Civil Code 1319 stated:

Consent is manifested by the meeting of the offer and the acceptance

upon the thing and the cause which are to constitute the contract.

The offer must be certain and the acceptance absolute. A qualified

acceptance constitutes a counter-offer.

Acceptance made by letter or telegram does not bind the offerer, except from the
time it came to his knowledge, the contract, in such a case, is presumed to have
been entered into in the place where the offer was made.

“Not perfected because it has not been proved satisfactorily that the acceptance
of the application ever came to the knowledge of the applicant
Perez vs. CA (The perfection of the contract)

Facts:
 Primitivo Perez had been insured with the BF Lifeman Insurace
Corporation since 1980 for 20k.

 In October 1987, an agent of Lifeman, Rodolfo Lalog, visited Perez in

Quezon and convinced him to apply for additional insurance coverage of
50k, to avail of the on-going promotional discount of 400 Pesos if the
premium were paid annually.

 Primitivi, accomplished an application form for the additional insurance

coverage. Virginia his wife paid 2,075 to Lalog.

 The receipt was issued by Lalog that the 2,075 was a deposit.

 Lalog, lost the accomplished application form by Perez. He asked again to

fill up the application form, later on Perez undergo the required medical
examination which he passed.

 Lalog forward the application for additional insurance of Perez together

with all supporting papers, to the office of the insurance company in
Quezon. Which office was supposed to forward the papers to the Manila
Office.

 On November 25, 1987, Perez died while he was riding a banca which
capsized during a storm.

 At the time of his death, his application papers for the additional isnurance
were still with Quezon Office. Lalog testified that when he went to follow-
up the papers, he found them still in the Quezon Office and so he
personally brought the papers to the Manila office it was only on
November 27, 1987 that said papers were received in Manila.

 Without knowing that Perez died on November 25, 1987, the insurance
company approved the application and issued the corresponding policy for
the 50k on December 2, 1987
  Virginia went ot Manila to claim the benefits under the insurance policies
of the deceased.

 She was paid 40k under the first insurance policy for 20k (double
indemnity in case of accident) but the insurance company refused to pay
the claim under the additional policy coverage of 50k,

the proceeds of which amount to 150k in view of a triple indemnity rider on

the insurance policy.

 In its letter of January 29, 1988 to Virginia Perez, the insurance company
maintained that the insurance for 50k had not been perfected at the time
of the death of Priminitivo Perez, hence, the insurance company refunded
the amount 2075 which Virginia paid.

 Lifeman filed for the rescission and the declaration of nullity.

 Perez, said that the contract and all the element of a valid contract are
present.

ISSUE:
Whether or not there was a perfected additional insurance contract.

HELD:
The contract was not perfected.

Insurance is a contract, whereby, for a stipulated consideration, one party

undetakes to compensate the other for loss on a specified subject by specified
perils.

Contracts, on the other hand is meeting of the minds between two persons
whereby one binds himself, with respect to the other to give something or to
render some service.

When Priminitivo filed, an application for insurance paid 2075 and submitted the
result of his medical examination, his application was subject to the acceptance
of private respondent BF Lifeman Insurance Corporation.
The perfection of the contract of insurance between the deceased and
respondent corporation was further conditioned upon compliance with the
following requisites stated in the application form:

There shall be no contract of insurance unless and until a policy is issued

on this application and that the said policy shall not take effect until the premium
has been paid and the policy delivered to and accepted by me/us in the person
while I/We, am/are in good health.

The assent of private respondent BF Lifeman Insurance Corporation therefore

was not given when it merely received the application form and all the requisites
supporting papers of the applicant.

Its assent was given when it issues a corresponding policy to the applicant.

Under the abovementioned provision, it is only when the applicant pays the
premium and receives and accepts the policy while e is in good health that the
contract of insurance is deemed to have been perfected.
Lim vs. Sun Life Insurance

Facts:
 Luis Lim of Zamboanga applied for a Sun Life Policy for 5k.

 He designated his wife, Pilar as beneficiary, The first premium of 433

Pesos was paid by Lim, then the company issued a provisional policy.

 Lim died after the issuance of the provisional policy but before approval of
the application.

 Pilar brought an action to recover from Sun Life the sum of 5k, the amount
named in the Provisional Policy.

 RTC in favor of the Sun Life, hence the appeal.

 The abovementioned life, is to be assured in accordance with the terms

and conditions contained or inserted by the company in the policy which
may be granted by it in this particular case for four months only from the
date of the application, provided that the company shall confirm this
agreement by issuing a policy of the said application when the same shall
be submitted to the Head Office of Montreal.

 Should the company not issue such a policy, then this agreement shall be
null and void ab initio, and the company shall be held not to have been on
the risk at all but in such case the amount herein acknowledged shall be
returned.

ISSUE:
Whether or not, there was a perfected contract of insurance?

HELD:
No. Petition was dismissed.

The policy of four months is expressly made subjected to the affirmative

condition that the “company shall confirm this agreement by issuing a policy on
said application when the same shall be submitted to the head office in
Montreal.”
Should the company not to issue such a policy, then this agreement shall be null
and void ab initio, and the company shall be held not to have been risk, this
mean that the agreement should not go into effect until the home office of the
company should confirm it by issuing a policy.

The provisional policy amounts to nothing but an acknowledgement on behalf of

the company, that I has received from the person named therein the sum of
money agreed upon the application, if the application is accepted by the
company.

Hence, there can be no contract of insurance unless the minds of the parties
have met in the agreement.

in this case, the contract was not consummated by the parties.

Musngi vs. West Coast Life

Facts:
 Plaintiffs Musngi and Garia filed a suit against West Coast Life to recover
the value of the two policies applied for by Arsenio Garcia (the insured)

 In applying for the said insurance, the insured was asked if he consulted a
physician or practitioner and if so, for what ailment or illness; he answered
“None” and “No.” respectively.

 These answer were one of the causes or considerations for the issuance
of the policies.

 Upon the death of the insured, the plaintiffs, as beneficiaries, demanded

West Coast to pay the value of the policies, however West Coast found
out that the insured had been treated by a lady physician in the General
Hospital in Manila for different ailments such as

(1) Incipient Pulmonary Tubercolosis.

(2) Chronic Bronchitis.
(3) Chronic Suppurative Pyelocystisis.

 It contented that two policies did not create any valid obligation because
they were fraudulently obtained by the insured.

 The appealed decision held that the health of the insured, before the
acceptance of application and the issuance of the policies. Could neither
be discussed nor questioned by the defendant company because three
physicians of the company examined the insured; however, all the
physicians signified that the insured was in good health.

 Nevertheless, the findings of the company physicians were nit the main
cause for the issuance, (or non-issuance) of the policies.

ISSUE:
Whether or not, statements were the causes which induced the defendant
company to issue the policies.
HELD:
Yes, such statements were the causes which induced the defendant
company to issue the policies.

The concealment and false statements of the insured constituted fraud; the
insurance company, by reason of such statement, accepted the risk associated
with the policy nut for which it could have rejected.

It was further held that the principal questions must be whether the assured (the
insurance company) was misled or deceived into entering a contract of obligation
or in fixing the premium if the insurance by withholding of material information or
facts within the assured’s knowledge or presumed knowledge.

Under Article 1276 of the Civil Code, the statement of a false consideration shall
render the contract void.

Such matter is not specifically provided for by the Insurance Law and so the
general rules of the civil law regarding contracts..

Thus, a valid cause or consideration is a requisites for a valid insurance contract.