044 Ng Zee v Asian Crusader Life Assurance

Corp.
GR No. L-30685, May 30, 1983
Topic: Concealment and Representation
Ponente: Escolin
Author: Keith Meridores
Link:
http://www.lawphil.net/judjuris/juri1983/may1983/gr_
l_30685_1983.html
FACTS:
1. Kwong Nam applied for insurance with Asian Crusader Life Assurance Corp. in 1962 for 20,000
2. In December of the following year, Kwong Nam died of Liver Cancer.
(Note that at this point, all payments were religiously paid)
3. In 1964, the wife of Kwong Nam, Ng Zee, sought to claim the proceeds from the Asian Crusader.
4. Asian Crusader denied Ng Zee, despite the latter submitting all the required documents.
5. Ng Zee appealed to the Insurance Commission.
6. Insurance Comm.: In favor of Ng Zee (no reason to deny Ng Zee's claim)
6.1 Asian Crusader alleged that the insured was guilty of misrepresentation when he answered "No" to the
question in the application form whether or not he applied for any other insurance or for reinstatement and was
previously rejected.
6.2 Asian Crusader alleged that Kwong Nam's previous appeal to reinstate its lapsed insurance policy with
Insular Life was denied.
7. Since Asian Crusader still refuse to pay despite the opinion of the Commissioner, the matter was brought to
the CFI of Manila.
8. CFI Manila: Asian Crusader must pay.
9. Asian Crusader appeals to the CA.
10. CA: it's a matter purely question of law. CA certifies the case to the SC.

ISSUE:
Whether or not there was misrepresentation on the part of Kwong Nam?

HELD:
No. Kwong Nam communicated all information that is material to the insurance policy.
RATIO:
1. Good faith in giving information (sec 27 of the old insurance law)

Section 27 of the Insurance Law [Act 2427] provides:

Sec. 27. Such party a contract of insurance must communicate to the other, in good faith, all facts within his
knowledge which are material to the contract, and which the other has not the means of ascertaining, and as to
which he makes no warranty.

Thus, "concealment exists where the assured had knowledge of a fact material to the risk, and honesty, good
faith, and fair dealing requires that he should communicate it to the assurer, but he designedly and intentionally
withholds the same."

2. In assailing an information provided, fraudulent intent must be present.
2.1 Argente vs. West Coast Life Insurance Co.: concealment must, in the absence of inquiries, be not only
material, but fraudulent, or the fact must have been intentionally withheld."
2.2 Assuming that the answer given by Kwong Nam is false, as claimed by the appellant. Sec. 27 of the
Insurance Law, above-quoted, nevertheless requires that fraudulent intent on the part of the insured be
established to entitle the insurer to rescind the contract.
2.3 Since the allegation of misrepresentation is an affirmative defense, the duty to establish such a defense by
satisfactory and convincing evidence rests upon the defendant.

3. Asian Crusader waived the right to information. (Sec. 32 of the old insurance law)
3.1 While it may be conceded that, from the viewpoint of a medical expert, the information communicated
(by Kwong Nam) was imperfect, the same was nevertheless sufficient to have induced appellant to make
further inquiries about the ailment and operation of the insured. (This is relevant because there was a medical
examination conducted before Kwong Nam was granted the insurance by Asian Crusader)

DOCTRINE
Concealment must, in the absence of inquiries, be not only material, but fraudulent, or the fact must have been
intentionally withheld.

SEPARATE OPINION:

-none-