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Insurance Case Digest: Eternal Gardens Memorial Park Corp. V. Philippine American Life Insurance Corp.


December 10, 1980: Philippine American Life Insurance Company (Philamlife) entered into an agreement denominated as Creditor Group Life Policy No. P-19202 with Eternal Gardens Memorial Park Corporation (Eternal) Under the policy (renewable annually), the clients of Eternal who purchased burial lots from it on installment basis would be insured by Philamlife amount of insurance coverage depended upon the existing balance Eternal complied by submitting a letter dated December 29, 1982, a list of insurable balances of its lot buyers for October 1982 which includes John Chuang which was stamped as received by Philam Life August 2, 1984, Chuang died with a balance of 100,000 php April 25, 1986: Philamlife had not furnished Eternal with any reply on itsinsurance claim so its demanded its claim According to Philam Life, since the application was submitted only on November 15, 1984, after his death, Mr. John Uy Chuang was not covered under the Policy since his application was not approved. Moreover, the acceptance of the premiums are only in trust for and not a sign of approval. RTC: favored Eternal CA: Reversed RTC

ISSUE: W/N Philam's inaction or non-approval meant the perfection of the insurance contract.

HELD: YES. CA reversed

construed in favor of the insured and in favor of the effectivity of the insurance contract Upon a partys purchase of a memorial lot on installment from Eternal, an insurance contract covering the lot purchaser is created and the same is

effective, valid, and binding until terminated by Philamlife by disapproving the insurance application Moreover, the mere inaction of the insurer on the insurance application must not work to prejudice the insured The termination of the insurance contract by the insurer must be explicit and unambiguous

Insurance Case Digest: New Life Enterprises V. Court Of Appeals (1992)

Lessons Applicable: Requisites of Double insurance (Insurance) FACTS:

May 15, 1981: Western Guaranty Corporation issued Fire Insurance Policy to New Life Enterprises foar P350,000 renewed on May, 13, 1982 July 30,1981: Reliance Surety and Insurance Co., Inc. issued Fire Insurance Policy to New Life Enterprises for P300,000 November 12, 1981; Additional P700,000 February 8, 1982: Equitable Insurance Corporation issued Fire Insurance Policy to New Life Enterprises for P200,000 October 19, 1982 2 am: fire electrical in nature destroyed the stock in tradeworth P1,550,000 Julian Sy went to Reliance to claim but he was refused. Same thing happened with the others who were sister companies. Sy violated the "Other Insurance Clause" RTC: favored New Life and against the three insurance companies CA: reversed -failure to state or endorse the other insurance coverage

ISSUE: W/N Sy can claim against the three insurance companies for violating the "Other Insurance Clause"


The terms of the contract are clear and unambiguous.

The insured is specifically required to disclose to the insurer any other insurance and its particulars which he may have effected on the same subject matter. The knowledge of such insurance by the insurer's agents, even assuming the acquisition thereof by the former, is not the "notice" that would estop the insurers from denying the claim.

conclusion of the trial court that Reliance and Equitable are "sister companies" is an unfounded conjecture drawn from the mere fact that Yap Kam Chuan was an agent for both companies which also had the same insurance claims adjuster

Availmentof the services of the same agents and adjusters by different companies is a common practice in the insurancebusiness and such facts do not warrant the speculative conclusion of the trial court.

The conformity of the insured to the terms of the policy isimplied from his failure to express any disagreement with what is provided for. a clear misrepresentation and a vital one because where the insured had been asked to reveal but did not, that was deception guilty of clear fraud

total absence of such notice nullifies the policy

assuming arguendo that petitioners felt the legitimate need to be clarified as to the policy condition violated, there was a considerable lapse of time from their receipt of the insurer's clarificatory letter dated March 30, 1983, up to the time the complaint was filed in court on January 31, 1984. The oneyear prescriptive period was yet toexpire on November 29, 1983, or about eight (8) months from the receipt of the clarificatory letter, but petitioners let the period lapse without bringing their action in court

Insurance Case Digest: Enriquez V. Sun Life Assurance Co. Of Canada (1920)
Lessons Applicable: Perfection (Insurance)


September 24, 1917: Joaquin Herrer made application to the Sun Life Assurance Companyof Canada through its office in Manila for a life annuity 2 days later: he paid P6,000 to the manager of the company's 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; -check (2) there had to be approval of the application by the head office of the company; and - check (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 December 18, 1917: attorney Aurelio A. 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, and called attention to the notification of November 26, 1917 December 21, 1917 morning: received by Mr. Torres December 20, 1917: Mr. Herrer died Rafael Enriquez, as administrator of the estate of the late Joaquin Ma. Herrer filed to recover from Sun Life Assurance Company of Canada through its office in Manila for a life annuity

RTC: favored Sun Life Insurance ISSUE: W/N Mr. Herrera received notice of acceptance of his application thereby perfecting his life annuity

HELD: NO. Judgment is reversed, and the Enriquez shall have and recover from the Sun Life the sum of P6,000 with legal interest from November 20, 1918, until paid, without special finding as to costs in either instance. So ordered.

Civil Code Art. 1319 (formerly Art.1262) Art. 1319. 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

Great Pacific Life Assurance Corp vs Court of Appeals

Facts: A contract of group life insurance was executed between Grepalife and DBP. The former agreed to insure the lives of eligiblehousing loan mortgagors of DBP. Dr. Leuterio applied membership in the group life insurance plan. He answered in the application formthat he has never consulted a physician for heart condition, high blood pressure, cancer, diabetes, lung, kidney, or stomach disorderor any other physical impairment, and that to the best of his knowledge he is in good condition. During the subsistence of the insurance he died from massive cerebral hemorrhage. Grepalife denied the claim because of concealment since it was discovered that he had high blood. His widow filed a claim. Issue: Whether or not there was misrepresentaion so as to warrant denial of claim; Whether or not the widow of Leuterio is a real party in interest Held: The Supreme Court ruled that there was no sufficient proof that the insured suffered from hypertension. It is a well-settled ruled that the fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the contract. As regards the second issue, the widow can be regarded as real party in interest because in mortgage redemption insurance the mortgagorand not the mortgagee is the contracting party. The mortgagormerely assigns the proceeds to the mortgagee. Therefore, since by principle of succession the widow may claim.

Insurance Case Digest | Development Bank of thePhilippines v CA Development Bank of the Philippines v CA

231 SCRA 370

March 21, 1994

Facts: Juan B. Dans, together with his family applied for a loan of P500,000 with DBP. As principalmortgagor, Dans, then 76 years of age was advised by DBP to obtain a mortgage redemptioninsurance (MRI) with DBP MRI pool. A loan in the reduced amount was approved and released by DBP. From the proceeds of the loan, DBP deducted the payment for the MRI premium. TheMRI premium of Dans, less the DBP service fee of 10%, was credited by DBP to the savingsaccount of DBP MRI-Pool. Accordingly, the DBP MRI Pool was advised of the credit.Dans died of cardiac arrest. DBP MRI Pool notified DBP that Dans was not eligible for MRIcoverage, being over the acceptance age limit of 60 years at the time of application. DBPapprised Candida Dans of the disapproval of her late husbands MRI application. DBP offered torefund the premium which the deceased had paid, but Candida Dans refused to accept the samedemanding payment of the face value of the MRI or an amount equivalent of the loan. She,likewise, refused to accept an ex gratia settlement which DBP later offered. Hence the case at bar. Issue: Whether or not the DBP MRI Pool should be held liable on the ground that the contract wasalready perfected? Held: No, it is not liable. The power to approve MRI application is lodged with the DBP MRI Pool.The pool, however, did not approve the application. There is also no showing that it accepted thesum which DBP credited to its account with full knowledge that it was payment for the premium.There was as a result no perfected contract of insurance hence the DBP MRI Pool cannot beheld liable on a contract that does not existIn dealing with Dans, DBP was wearing 2 legal hats: the first as a lender and the second as aninsurance agent. As an insurance agent, DBP made Dans go through the motion of applying for said insurance, thereby leading him and his family to believe that they had already fulfilled allthe requirements for the MRI and that the issuance of their policy was forthcoming. DBP had fullknowledge that the application was never going to be approved. The DBP is not authorized toaccept applications for MRI when its clients are more than 60 years of age. Knowing all the

while that Dans was ineligible, DBP exceeded the scope of its authority when it accepted theapplication for MRI by collecting the insurance premium and deducting its agents commissionand service fee. Since the third person dealing with an agent is unaware of the limits of theauthority conferred by the principal on the agent and he has been deceived by the non-disclosurethereof by the agent, then the latter is liable for damages to him.