1. SUNLIFE ASSURANCE COMPANY OF CANADA vs. COURT OF APPEALS G.R. No.

105135, 22 June 1995

FACTS:
Robert John Bacani procured a life insurance contract for himself from petitioner-company, designating
his mother Bernarda Bacani, herein private respondent, as the beneficiary. He was issued a policy
valued at P100,000.00 with double indemnity in case of accidental death. Sometime after, the insured
died in a plane crash. Bernarda filed a claim with petitioner, seeking the benefits of the insurance
policy taken by her son. However, said insurance company rejected the claim on the ground that the
insured did not disclose material facts relevant to the issuance of the policy, thus rendering the
contract of insurance voidable. Petitioner discovered that two weeks prior to his application for
insurance, the insured was examined and confined at the Lung Center of the Philippines, where he was
diagnosed for renal failure. The RTC, as affirmed by the CA, this fact was concealed, as alleged by the
petitioner. But the fact that was concealed was not the cause of death of the insured and that matters
relating to the medical history of the insured is deemed to be irrelevant since petitioner waived the
medical examination prior to the approval and issuance of the insurance policy.
ISSUE: Whether or not the concealment of such material fact, despite it not being the cause of death
of the insured, is sufficient to render the insurance contract voidable
HELD:
YES. Section 26 of the Insurance Code is explicit in requiring a party to a contract of insurance to
communicate to the other, in good faith, all facts within his knowledge which are material to the
contract and as to which he makes no warranty, and which the other has no means of ascertaining.
Anent the finding that the facts concealed had no bearing to the cause of death of the insured, it is
well settled that the insured need not die of the disease he had failed to disclose to the insurer. It is
sufficient that his non-disclosure misled the insurer in forming his estimates of the risks of the
proposed insurance policy or in making inquiries. The SC, therefore, ruled that petitioner properly
exercised its right to rescind the contract of insurance by reason of the concealment employed by the
insured. It must be emphasized that rescission was exercised within the two-year contestability period
as recognized in Section 48 of The Insurance Code. WHEREFORE, the petition is GRANTED and the
Decision of the Court of Appeals is REVERSED and SET ASIDE.

2. Philamcare Health Systems, Inc. v. CA (2002) G.R. No. 125678 March 18, 2002
Lessons Applicable:
Elements (Insurance)
Blood Relationship (Insurance)
FACTS:
Ernani Trinos, deceased husband of Julita Trinos, applied for a health care coverage with Philamcare
Health Systems, Inc.
He answered the standard application form: Have you or any of your family members ever consulted or
been treated for high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic
ulcer? (If Yes, give details). - NO
the application was approved for a period of one year from March 1, 1988 to March 1, 1989.
Accordingly, he was issued Health Care Agreement No. P010194
Under the agreement, respondents husband was entitled to avail of hospitalization benefits, whether
ordinary or emergency, listed therein. He was also entitled to avail of "out-patient benefits" such as
annual physical examinations, preventive health care and other out-patient services.
Upon the termination of the agreement, the same was extended for another year from March 1, 1989
to March 1, 1990, then from March 1, 1990 to June 1, 1990. The amount of coverage was increased to
a maximum sum of P75,000.00 per disability.
During the period of his coverage, Ernani suffered a heart attack and was confined at the Manila
Medical Center (MMC) for 1 month beginning March 9, 1990.
While her husband was in the hospital, Julina Trinos tried to claim the benefits under the health care
agreement.
Philamcare denied her claim saying that the Health Care Agreement was void for concealing Ernanis
medical history so she paid the hospitalization expenses of P76,000.00 herself.
Doctors at the MMC allegedly discovered at the time of Ernanis confinement that he was hypertensive,
diabetic and asthmatic, contrary to his answer in the application form.
After being discharged from the MMC, he was attended by a physical therapist at home.
Later, he was admitted at the Chinese General Hospital.
Due to financial difficulties, however, he was brought home again.
April 13, 1990 morning: Ernani had fever and was feeling very weak
He was brought to Chinese General Hospital where he died
July 24, 1990: She brought action for damages against Philamcare Health Systems Inc. and its
president, Dr. Benito Reverente
RTC: Philamcare and Dr. Benito Reverent to pay and reimburse P76k plus interest, moral damages,
exemplary damages, attorney's fees and cost of suit
CA: affirmed the decision of RTC but deleted all awards for damages and absolved Philamcare
Philamcare brought an instant petition for review arguing that:
health care agreement is not an insurance contract; hence the "incontestability clause" under the
Insurance Code does not apply.
grants "living benefits," such as medical check-ups and hospitalization which a member may
immediately enjoy so long as he is alive upon effectivity of the agreement until its expiration one-year
thereafter
only medical and hospitalization benefits are given under the agreement without any indemnification,
unlike in an insurance contract where the insured is indemnified for his loss
since Health Care Agreements are only for a period of one year, as compared to insurance contracts
which last longer; incontestability clause does not apply, as the same requires an effectivity period of
at least two years
insurance company is governed by the Insurance Commission, but a Health Maintenance Organization

under the authority of the Department of Health

ISSUE:
W/N the health care agreement is a contract of insurance. - YES
W/N the spouse being "not" legal wife can claim - YES
HELD: Petition is DENIED. CA AFFIRMED.
1. YES.
P.D. 612 Insurance Code
Sec. 2 (1)
(1) A "contract of insurance" is an agreement whereby one undertakes for a consideration to indemnify
another against loss, damage or liability arising from an unknown or contingent event.
Sec. 3
Sec. 3. Any contingent or unknown event, whether past or future, which may damnify a person having
an insurable interest, or create a liability against him, may be insured against, subject to the provisions
of this chapter.
The consent of the husband is not necessary for the validity of an insurance policy taken out by
a married woman on her life or that of her children.
Any minor of the age of eighteen years or more, may, notwithstanding such minority, contract for life,
health and accident insurance, with any insurance company duly authorized to do business in
the Philippines, provided the insurance is taken on his own life and the beneficiary appointed is the
minor's estate or the minor's father, mother, husband, wife, child, brother or sister.
The married woman or the minor herein allowed to take out an insurance policy may exercise all the
rights and privileges of an owner under a policy.
All rights, title and interest in the policy of insurance taken out by an original owner on the life or
health of a minor shall automatically vest in the minor upon the death of the original owner, unless
otherwise provided for in the policy.
In the case at bar, the insurable interest of respondent's husband in obtaining the health care
agreement was his own health.
in the nature of non-life insurance, which is primarily a contract of indemnity
Once the member incurs hospital, medical or any other expense arising from sickness, injury or other
stipulated contingent, the health care provider must pay for the same to the extent agreed upon under
the contract.
The answer in response to the question relating to the medical history of the applicant largely depends
on opinion rather than fact, especially coming from respondent's husband who was not a medical
doctor.
Where matters of opinion or judgment are called for, answers made in good faith and without intent to
deceive will not avoid a policy even though they are untrue.
The fraudulent intent on the part of the insured must be established to warrant rescission of the
insurance contract.
Concealment as a defense for the health care provider or insurer to avoid liability is an affirmative
defense and the duty to establish such defense by satisfactory and convincing evidence rests upon the
provider or insurer.
P.D. 612 Insurance Code
Sec. 27
Sec. 27. A concealment whether intentional or unintentional entitles the injured party to rescind a
contract of insurance.
cancellation of health care agreements as in insurance policies require the concurrence of the following
conditions: - none of these was made
1. Prior notice of cancellation to insured;
2. Notice must be based on the occurrence after effective date of the policy of one or more of the
grounds mentioned;
3. Must be in writing, mailed or delivered to the insured at the address shown in the policy;
4. Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request
of insured, to furnish facts on which cancellation is based.
When the terms of insurance contract contain limitations on liability, courts should construe them in
such a way as to preclude the insurer from non-compliance with his obligation.
Being a contract of adhesion, the terms of an insurance contract are to be construed strictly against
the party which prepared the contract - the insurer.
(U)nder the title Claim procedures of expenses, the defendant Philamcare Health Systems Inc. had
twelve months from the date of issuance of the Agreement within which to contest the membership of
the patient if he had previous ailment of asthma, and six months from the issuance of the agreement if
the patient was sick of diabetes or hypertension. The periods having expired, the defense of
concealment or misrepresentation no longer lie.
2. YES.
P.D. 612 Insurance Code
Sec. 10
Sec. 10. Every person has an insurable interest in the life and health:
(1) of himself, of his spouse and of his children;
(2) of any person on whom he depends wholly or in part for education or support, or in whom he has a
pecuniary interest;
(3) of any person under a legal obligation to him for the payment of money, respecting property or
service, of which death or illness might delay or prevent the performance; and
(4) of any person upon whose life any estate or interest vested in him depends.
not the legal wife (deceased was previously married to another woman who was still alive)
health care agreement is in the nature of a contract of indemnity.
payment should be made to the party who incurred the expenses

3. Qua v Law Union. G.R. No. L-4611 December 17, 1955

Facts:
Qua owned 4 warehouses used for the storage of copra and hemp. They were insured with the Law
Union.
Fire broke out and completely destroyed 3 bodegas. The plaintiff submitted claims totalling
P398,562.81. The Insurance Company resisted payment on the grounds that the fire had been
deliberately caused by the insured or by other persons in connivance with him.
Que Chee Gan and his brother were tried for arson, but were acquitted by the trial court. As regards
the insurance claim, the trial court ruled in favor of Qua and entitled him to recover more than Php
300,000 for indemnities from the insurance company. Hence, the company appealed to the SC.
In its first assignment of error, the insurance company alleged that the trial Court should have held
that the policies were avoided for breach of warranty. The contract noted that fire hydrants were
required in a particular measurement of space (every 150 feet). Hence, they argued that since the
bodegas insured had an external wall perimeter of 500 meters, the appellee should have 11 fire
hydrants in the compound, and that he actually had only 2, with a further pair.
Issues:
1. WON the insurance company can void the policies it had issued
2. WON the insured violated the "Hemp Warranty" provisions of the policy against the storage of
gasoline
3. WON the insured planned the destruction of the bodega
Held: No. No. No.
Ratio:
1. The insurer, who at the time of issuance, has knowledge of existing facts which would invalidate the
contract from the beginning, such constitutes a waiver of conditions in the contract inconsistent with
the facts, and the insurer is stopped thereafter from asserting the breach of such conditions. Also, an
insurance company intends to executed a valid contract in return for the premium received; and when
the policy contains a condition which renders it voidable at its inception, and this result is known to the
insurer, it will be presumed to have intended to waive the conditions and to execute a binding
contract, rather than to have deceived the insured into thinking he is insured when in fact he is not.
The appellant is barred estoppel to claim violation of the so-called fire hydrants warranty, because it
knew the number of hydrants demanded therein never existed from the very beginning and issued the
policies.
To allow a company to accept one's money for a policy of insurance which it then knows to be void and
of no effect, though it knows as it must, that the assured believes it to be valid and binding, is so
contrary to the dictates of honesty and fair dealing, and so closely related to positive fraud, as to the
abhorrent to fair-minded men.
The appellant company so worded the policies that while exacting the greater number of fire hydrants
and appliances, it kept the premium discount at the minimum of 2 1/2%, thereby giving the insurance
company a double benefit. Such abnormal treatment of the insured strongly points at an abuse of the
insurance company's selection of the words and terms of the contract, over which it had absolute
control.
Receipt of Premiums or Assessments after Cause for Forfeiture Other than Nonpayment. It is a well
settled rule of law that an insurer which with knowledge of facts entitling it to treat a policy as no
longer in force, receives and accepts a premium on the policy, estopped to take advantage of the
forfeiture. It cannot treat the policy as void for the purpose of defense to an action to recover for a loss
thereafter occurring and at the same time treat it as valid for the purpose of earning and collecting
further premiums.
Moreover, taking into account the well known rule that ambiguities or obscurities must be strictly
interpreted against the party that caused them, the "memo of warranty" invoked by appellant bars the
latter from questioning the existence of the appliances called for in the insured premises
2. The ambiguity must be held strictly against the insurer and liberally in favor of the insured, specially
to avoid a forfeiture. So long as insurance companies insist upon the use of ambiguous, intricate and
technical provisions, which conceal rather than frankly disclose, their own intentions, the courts must,
in fairness to those who purchase insurance, construe every ambiguity in favor of the insured.
Appellee admitted that there were 36 cans of gasoline in the building designed. It However, gasoline is
not specifically mentioned among the prohibited articles listed in the so-called "hemp warranty." The
cause relied upon by the insurer speaks of "oils", and is uncertain because, "Oils" usually mean
"lubricants" and not gasoline or kerosene.
If the company intended to rely upon a condition of that character, it ought to have been plainly
expressed in the policy.
The contract of insurance is one of perfect good faith not for the insured alone, but equally so for the
insurer; in fact, it is mere so for the latter, since its dominant bargaining position carries with it stricter
responsibility.
Also, the gasoline kept in Bodega No. 2 was only incidental to his business, being no more than a
customary 2 day's supply for the five or six motor vehicles used for transporting of the stored
merchandise. "It is well settled that the keeping of inflammable oils on the premises though prohibited
by the policy does not void it if such keeping is incidental to the business."
3. It was unlikely that Qua burned the warehouse to defraud the company because he had the
resources to pay off the National Bank in a short time. Also, no motive appears for attempt to defraud
the insurer. While the acquittal of the insured in the arson case is not res judicata on the present civil
action, the insurer's evidence, to judge from the decision in the criminal case, is practically identical in
both cases and must lead to the same result, since the proof to establish the defense of connivance at
the fire in order to defraud the insurer "cannot be materially less convincing than that required in order
to convict the insured of the crime of arson."
As to the defense that the burned bodegas could not possibly have contained the quantities of copra
and hemp stated in the fire claims, the insurer relied on its adjuster investigator who examined the
premises during and after the fire. His testimony, however, was based on inferences from the
photographs and traces found after the fire, and must yield to the contradictory testimony of those
who actually saw the contents of the bodegas shortly before the fire, while inspecting them for the
mortgagee Bank.

4. Edillon v Manila Bankers Life G.R. No. L-34200 September 30, 1982

Facts:
Carmen O, Lapuz applied with Manila Bankers for insurance coverage against accident and injuries.
She gave the date of her birth as July 11, 1904. She paid the sum of P20.00 representing the premium
for which she was issued the corresponding receipt. The policy was to be effective for 90 days.
During the effectivity, Carmen O. Lapuz died in a vehicular accident in the North Diversion Road.
Petitioner Regina L. Edillon, a sister of the insured and the beneficiary in the policy, filed her claim for
the proceeds of the insurance. Her claim having been denied, Regina L. Edillon instituted this action in
the trial court.
The insurance corporation relies on a provision contained in the contract excluding its liability 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" They pointed out that the insured was over sixty (60) years of age
when she applied for the insurance coverage, hence the policy became void.
The trial court dismissed the complaint and ordered edillon to pay P1000. The reason was that a policy
of insurance being a contract of adhesion, it was the duty of the insured to know the terms of the
contract he or she is entering into.
The insured could not have been qualified under the conditions stated in said contract and should have
asked for a refund of the premium.
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. Petition granted.
Ratio:
The age of Lapuz was not concealed to the insurance company. Her application clearly indicated her
age of the time of filing the same to be almost 65 years of age. Despite such information which could
hardly be overlooked, the insurance corporation received her payment of premium and issued the
corresponding certificate of insurance without question.
There was sufficient time for the private respondent to process the application and to notice that the
applicant was over 60 years of age and cancel the policy.
Under the circumstances, the insurance corporation is already deemed in estoppel. It inaction to
revoke the policy despite a departure from the exclusionary condition contained in the said policy
constituted a waiver of such condition, similar to Que Chee Gan vs. Law Union Insurance.
The insurance company was aware, even before the policies were issued, that in the premises insured
there were only two fire hydrants contrary to the requirements of the warranty in question.
It is usually held that where the insurer, at the time of the issuance of a policy of insurance, has
knowledge of existing facts which, if insisted on, would invalidate the contract from its very inception,
such knowledge constitutes a waiver of conditions in the contract inconsistent with the known facts,
and the insurer is stopped thereafter from asserting the breach of such conditions.
To allow a company to accept one's money for a policy of insurance which it then knows to be void and
of no effect, though it knows as it must, that the assured believes it to be valid and binding, is so
contrary to the dictates of honesty and fair dealing.
Capital Insurance & Surety Co., Inc. vs. - involved a violation of the provision of the policy requiring the
payment of premiums before the insurance shall become effective. The company issued the policy
upon the execution of a promissory note for the payment of the premium. A check given subsequent
by the insured as partial payment of the premium was dishonored for lack of funds. Despite such
deviation from the terms of the policy, the insurer was held liable.
... is that although one of conditions of an insurance policy is that "it shall not be valid or binding until
the first premium is paid", if it is silent as to the mode of payment, promissory notes received by the
company must be deemed to have been accepted in payment of the premium. In other words, a
requirement for the payment of the first or initial premium in advance or actual cash may be waived by
acceptance of a promissory note...

5. Saturnino vs The Philippine American Life Insurance Company

7 SCRA 316 Mercantile Law Insurance Law Representation Concealment Misrepresentation
Fraud
In September 1957, Estefania Saturnino was operated for cancer in which her right breast was
removed. She was advised by her surgeon that shes not totally cured because her cancer was
malignant. In November 1957, she applied for an insurance policy under Philamlife (Philippine
American Life Insurance Company). She did not disclose the fact that she was operated nor did she
disclose any medical histories. Philamlife, upon seeing the clean bill of health from Estefania waived its
right to have Estefania undergo a medical checkup. In September 1958, Estefania died of pneumonia
secondary to influenza. Her heirs now seek to enforce the insurance claim.
ISSUE: Whether or not Saturnino is entitled to the insurance claim.
HELD: No. The concealment of the fact of the operation is fraudulent. Even if, as argued by the heirs,
Estefania never knew she was operated for cancer, there is still fraud in the concealment no matter
what the ailment she was operated for. Note also that in order to avoid a policy, it is not necessary that
actual fraud be established otherwise insurance companies will be at the mercy of any one seeking
insurance.
In this jurisdiction a concealment, whether intentional or unintentional, entitles the insurer to rescind
the contract of insurance, concealment being defined as negligence to communicate that which a
party knows and ought to communicate.
Also, the fact that Philamlife waived its right to have Estefania undergo a medical examination is not
negligence. Because of Estefanias concealment, Philamlife considered medical checkup to be no
longer necessary. Had Philamlife been informed of her operation, she would have been made to
undergo medical checkup to determine her insurability.

6. Vda Canilang v CA G.R. No. 92492 June 17, 1993

Facts:
Canilang was found to have suffered from sinus tachycardia then bronchitis after a check-up from his

doctor. The next day, he applied for a "non-medical" insurance policy with respondent Grepalife
naming his wife, Thelma Canilang, as his beneficiary. This was to the value of P19,700.
He died of "congestive heart failure," "anemia," and "chronic anemia." The widow filed a claim with
Great Pacific which the insurer denied on the ground that the insured had concealed material
information from it.
Petitioner then filed a complaint against Great Pacific for recovery of the insurance proceeds. Petitioner
testified that she was not aware of any serious illness suffered by her late husband and her husband
had died because of a kidney disorder. The doctor who gave the check up stated that he treated the
deceased for sinus tachycardia and "acute bronchitis."
Great Pacific presented a physician who testified that the deceased's insurance application had been
approved on the basis of his medical declaration. She explained that as a rule, medical examinations
are required only in cases where the applicant has indicated in his application for insurance coverage
that he has previously undergone medical consultation and hospitalization.
The Insurance Commissioner ordered Great Pacific to pay P19,700 plus legal interest and P2,000.00 as
attorney's fees. On appeal by Great Pacific, the Court of Appeals reversed. It found that the failure of
Jaime Canilang to disclose previous medical consultation and treatment constituted material
information which should have been communicated to Great Pacific to enable the latter to make proper
inquiries.
Hence this petition by the widow.
Issue: Won Canilang was guilty of misrepresentation
Held: Yes. Petition denied.
Ratio:
There was a right of the insurance company to rescind the contract if it was proven that the insured
committed fraud in not affirming that he was treated for heart condition and other ailments stipulated.
Apart from certifying that he didnt suffer from such a condition, Canilang also failed to disclose in the
that he had twice consulted a doctor who had found him to be suffering from "sinus tachycardia" and
"acute bronchitis."
Under the Insurance Code:
Sec. 26. A neglect to communicate that which a party knows and ought to communicate, is called a
concealment.
Sec. 28. Each party to a contract of insurance must communicate to the other, in good faith, all factors
within his knowledge which are material to the contract and as to which he makes no warranty, and
which the other has not the means of ascertaining.
The information concealed must be information which the concealing party knew and should have
communicated. The test of materiality of such information is contained in Section 31:
Sec. 31. Materiality is to be determined not by the event, but solely by the probable and reasonable
influence of the facts upon the party to whom the communication is due, in forming his estimate of the
disadvantages of the proposed contract, or in making his inquiries.
The information which Jaime Canilang failed to disclose was material to the ability of Great Pacific to
estimate the probable risk he presented as a subject of life insurance. Had he disclosed his visits to his
doctor, the diagnosis made and medicines prescribed by such doctor, in the insurance application, it
may be reasonably assumed that Great Pacific would have made further inquiries and would have
probably refused to issue a non-medical insurance policy.
Materiality relates rather to the "probable and reasonable influence of the facts" upon the party to
whom the communication should have been made, in assessing the risk involved in making or omitting
to make further inquiries and in accepting the application for insurance; that "probable and reasonable
influence of the facts" concealed must, of course, be determined objectively, by the judge ultimately.
The Insurance Commissioner had also ruled that the failure of Great Pacific to convey certain
information to the insurer was not "intentional" in nature, for the reason that Canilang believed that he
was suffering from minor ailment like a common cold. Section 27 stated that:
Sec. 27. A concealment whether intentional or unintentional entitles the injured party to rescind a
contract of insurance.
The failure to communicate must have been intentional rather than inadvertent. Canilang could not
have been unaware that his heart beat would at times rise to high and alarming levels and that he had
consulted a doctor twice in the two (2) months before applying for non-medical insurance. Indeed, the
last medical consultation took place just the day before the insurance application was filed. In all
probability, Jaime Canilang went to visit his doctor precisely because of the ailment.
Canilang's failure to set out answers to some of the questions in the insurance application constituted
concealment.
7. Ng v Asian Crusader G.R. No. L-30685 May 30, 1983
Facts:
Kwong Nam applied for a 20-year endowment insurance on his life for the sum of P20,000.00, with his
wife, appellee Ng Gan Zee as beneficiary. On the same date, Asian Crusader, upon receipt of the
required premium from the insured, approved the application and issued the corresponding policy.
Kwong Nam died of cancer of the liver with metastasis. All premiums had been paid at the time of his
death.
Ng Gan Zee presented a claim for payment of the face value of the policy. On the same date, she
submitted the required proof of death of the insured. Appellant denied the claim on the ground that the
answers given by the insured to the questions in his application for life insurance were untrue.
Appellee brought the matter to the attention of the Insurance Commissioner. The latter, after
conducting an investigation, wrote the appellant that he had found no material concealment on the
part of the insured and that, therefore, appellee should be paid the full face value of the policy. The
company refused to settle its obligation.
Appellant alleged that the insured was guilty of misrepresentation when he answered "No" to the
following question appearing in the application for life insuranceHas 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.
The lower court ruled against the company on lack of evidence.
Appellant further maintains that when the insured was examined in connection with his application for
life insurance, he gave the appellant's medical examiner false and misleading information as to his
ailment and previous operation. The company contended that he was operated on for peptic ulcer 2
years before the policy was applied for and that he never disclosed such an operation.

Issue: WON Asian Crusader was deceived into entering the contract or in accepting the risk at the rate
of premium agreed upon because of insured's representation?
Held: No. Petition dismissed.
Ratio:
Section 27 of the Insurance Law:
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.
"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."
It has also been held "that the concealment must, in the absence of inquiries, be not only material, but
fraudulent, or the fact must have been intentionally withheld."
Fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the
contract. And as correctly observed by the lower court, "misrepresentation as a defense of the insurer
to avoid liability is an 'affirmative' defense. The duty to establish such a defense by satisfactory and
convincing evidence rests upon the defendant. The evidence before the Court does not clearly and
satisfactorily establish that defense."
It bears emphasis that Kwong Nam had informed the appellant's medical examiner of the tumor. His
statement that said tumor was "associated with ulcer of the stomach" should be construed as an
expression made in good faith of his belief as to the nature of his ailment and operation.
While the information communicated was imperfect, the same was sufficient to have induced appellant
to make further inquiries about the ailment and operation of the insured.
Section 32 of Insurance Law:
Section 32. The right to information of material facts maybe waived either by the terms of insurance or
by neglect to make inquiries as to such facts where they are distinctly implied in other facts of which
information is communicated.
Where 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.
The company or its medical examiner did not make any further inquiries on such matters from the
hospital before acting on the application for insurance. The fact of the matter is that the defendant was
too eager to accept the application and receive the insured's premium. It would be inequitable now to
allow the defendant to avoid liability under the circumstances."
8. MALAYAN INSURANCE CO., INC. (MICO), vs. GREGORIA CRUZ ARNALDO, in her
capacity as the INSURANCE COMMISSIONER, and CORONACION PINCA G.R. No. L67835 October 12, 1987
FACTS:
Coronacion Pinca insured her property for Php 14,000 with Malayan Insurance Company (MICO)
for the period July 22, 1981 to July 22, 1982. On October 15, 1981, MICO cancelled the policy for nonpayment. On December 24, 1981, Domingo Adora, the agent accepted Pinca's payment and remitted
to MICO. On January 18, 1982, Pinca's property was completely burned . She then demanded from
MICO for payment of the insured but the latter declined on the ground that the policy had been
cancelled due to non-payment. Pinca went to the Insurance Commission, she was ultimately sustained
by the public respondent, thus a petition was filed before the SC.
ISSUE:
Whether or not MICO should be held liable to pay for the insured property.
RULING:
MICO's acknowledgment of Adora as its agent defeats its contention that he was not authorized
to receive the premium payment on its behalf. It is clearly provided in Section 306 of the Insurance
Code that:
SEC. 306. xxx xxx xxx
Any insurance company which delivers to an insurance agant or insurance broker a policy
or contract of insurance shall be demmed to have authorized such agent or broker to
receive on its behalf payment of any premium which is due on such policy or contract of
insurance at the time of its issuance or delivery or which becomes due thereon.
And it is a well-known principle under the law of agency that:
Payment to an agent having authority to receive or collect payment is equivalent to payment to the
principal himself; such payment is complete when the money delivered is into the agent's hands and is
a discharge of the indebtedness owing to the principal.
The SC denied the petition and affirmed the decision of the Insurance Commission.

9. Great Pacific v CA G.R. No. L-31845 April 30, 1979

Facts:
Ngo Hing filed an application with the Great Pacific for a twenty-year endowment policy in the amount
of P50,000.00 on the life of his one-year old daughter Helen. He supplied the essential data which
petitioner Mondragon, the Branch Manager, wrote on the form. The latter paid the annual premium the
sum of P1,077.75 going over to the Company, but he retained the amount of P1,317.00 as his
commission for being a duly authorized agent of Pacific Life.
Upon the payment of the insurance premium, the binding deposit receipt was issued Ngo Hing.
Likewise, petitioner Mondragon handwrote at the bottom of the back page of the application form his

strong recommendation for the approval of the insurance application. Then Mondragon received a
letter from Pacific Life disapproving the insurance application. The letter stated that the said life
insurance application for 20-year endowment plan is not available for minors below seven years old,
but Pacific Life can consider the same under the Juvenile Triple Action Plan, and advised that if the offer
is acceptable, the Juvenile Non-Medical Declaration be sent to the company.
The non-acceptance of the insurance plan by Pacific Life was allegedly not communicated by petitioner
Mondragon to private respondent Ngo Hing. Instead, on May 6, 1957, Mondragon wrote back Pacific
Life again strongly recommending the approval of the 20-year endowment insurance plan to children,
pointing out that since the customers were asking for such coverage.
Helen Go died of influenza. Ngo Hing sought the payment of the proceeds of the insurance, but having
failed in his effort, he filed the action for the recovery before the Court of First Instance of Cebu, which
ruled against him.
Issues:
1. Whether the binding deposit receipt constituted a temporary contract of the life insurance in
question
2. Whether Ngo Hing concealed the state of health and physical condition of Helen Go, which rendered
void the policy
Held: No. Yes. Petition dismissed.
Ratio:
The receipt was intended to be merely a provisional insurance contract. Its perfection was subject to
compliance of the following conditions: (1) that the company shall be satisfied that the applicant was
insurable on standard rates; (2) that if the company does not accept the application and offers to issue
a policy for a different plan, the insurance contract shall not be binding until the applicant accepts the
policy offered; otherwise, the deposit shall be refunded; and (3) that if the company disapproves the
application, the insurance applied for shall not be in force at any time, and the premium paid shall be
returned to the applicant.
The receipt is merely an acknowledgment that the latter's branch office had received from the
applicant the insurance premium and had accepted the application subject for processing by the
insurance company. There was still approval or rejection the same on the basis of whether or not the
applicant is "insurable on standard rates." Since Pacific Life disapproved the insurance application of
respondent Ngo Hing, the binding deposit receipt in question had never become in force at any time.
The binding deposit receipt is conditional and does not insure outright. This was held in Lim v Sun.
The deposit paid by private respondent shall have to be refunded by Pacific Life.
2. Ngo Hing had deliberately concealed the state of health of his daughter Helen Go. When he
supplied data, he was fully aware that his one-year old daughter is typically a mongoloid child. He
withheld the fact material to the risk insured.
The contract of insurance is one of perfect good faith uberrima fides meaning good faith, absolute
and perfect candor or openness and honesty; the absence of any concealment or demotion, however
slight.
The concealment entitles the insurer to rescind the contract of insurance.

10.Yu v CA G.R. No. L-12465 May 29, 1959

Facts:
Yu Pang Eng submitted application for insurance consisting of the medical declaration made by him to
the medical examiner and the report. Yu then paid the premium in the sum of P591.70.
The insured, in his application for insurance, said no to ever having stomach disease, cancer, and
fainting-spells. He also claimed to not have consulted a physician regarding such diseases.
After submitting the form, he entered the hospital where he complained of dizziness, anemia,
abdominal pains and tarry stools. He was found to have peptic ulcer.
The insured entered another hospital for medical treatment but he died of "infiltrating medullary
carcinoma, Grade 4, advanced cardiac and of lesser curvature, stomach metastases spleen."
Yu Pang Cheng aimed to collect P10,000.00 on life of one Yu Pang Eng from an insurance company.
The company set up the defense that the insured was guilty of misrepresentation and concealment of
material facts. They subsequently refused to give the indemnity.
The trial court rendered judgment ordering defendant to pay plaintiff the sum of P10,000.00, plus
P2,000.00 as attorney's fees. The Court of Appeals reversed the decision of the trial court, holding that
the insured was guilty of concealment of material facts. Hence the present petition.
Issue: Whether or not the insured is guilty of concealment of some facts material to the risk insured
that consequently avoids the policy.
Held: Yes. Petition dismissed.
Ratio:
The first confinement took place from January 29, 1950 to February 11, while his application was
submitted on September 5, 1950. When he gave his answers to the policy, he concealed the ailment of
which he was treated in the hospital.
The negative answers given by the insured regarding his previous ailment deprived defendant of the
opportunity to make the necessary inquiry as to the nature of his past illness so that as it may form its
estimate relative to the approval of his application. Had defendant been given such opportunity, the
company would probably had never consented to the issuance of the policy in question. In fact,
according to the death certificate, the insureds death may have direct connection with his previous
illness.
Under the law, a neglect to communicate that which a party knows and ought to communicate, is
called concealment. This entitles the insurer to rescind the contract. The insured is required to
communicate to the insurer all facts within his knowledge which are material to the contract and which
the other party has not the means of ascertaining. The materiality is to be determined not by the
event but solely by the probable and reasonable influence of the facts upon the party to whom the
communication is due.
Argente vs. West Coast- One ground for the rescission of a contract of insurance under the insurance
Act is "a concealment", which in section 25 is defined "A neglect to communicate that which a party
knows and ought to communicate."
In an action on a life insurance policy where the evidence conclusively shows that the answers to
questions concerning diseases were untrue, the truth or falsity of the answers become the determining

factor. If the policy was procured by fraudulent representations, the contract of insurance was never
legally existent. It can fairly be assumed that had the true facts been disclosed by the assured, the
insurance would never have been granted.
11. PUDENTIAL GUARANTEE and ASSURANCE INC., vs. TRANS-ASIA SHIPPING LINES, INC
G.R. No. 151890
June 20, 2006
Principle found in the case: a warranty is a statement or promise set forth in the policy, or by
reference incorporated therein, the untruth or non-fulfillment of which in any respect, and
without reference to whether the insurer was in fact prejudiced by such untruth or nonfulfillment, renders the policy voidable by the insurer. However it must be first duly proven by
the one who alleges that there was a breach of warranty.
Facts:
TRANS-ASIA is the owner of the vessel M/V Asia Korea. In consideration of payment of premiums,
PRUDENTIAL insured M/V Asia Korea for loss/damage of the hull and machinery arising from perils,
inter alia, of fire and explosion for the sum of P40 Million, beginning from the period of July 1, 1993 up
to July 1, 1994.
On October 25, 1993, while the policy was in force, a fire broke out while [M/V Asia Korea was]
undergoing repairs at the port of Cebu. On October 26, 1993 TRANS-ASIA filed its notice of claim for
damage sustained by the vessel evidenced by a letter/formal claim. TRANS-ASIA reserved its right to
subsequently notify PRUDENTIAL as to the full amount of the claim upon final survey and
determination by average adjuster Richard Hogg International (Phil.) of the damage sustained by
reason of fire.
TRANS-ASIA executed a document denominated "Loan and Trust receipt", a portion of which states that
Received from Prudential Guarantee and Assurance, Inc., the sum of PESOS THREE MILLION ONLY
(P3,000,000.00) as a loan without interest under Policy No. MH 93/1353 [sic], repayable only in the
event and to the extent that any net recovery is made by Trans-Asia Shipping Corporation, from any
person or persons, corporation or corporations, or other parties, on account of loss by any casualty for
which they may be liable occasioned by the 25 October 1993: Fire on Board."
PRUDENTIAL later on denied Trans-Asias claim in stated in a letter that "After a careful review and
evaluation of your claim arising from the above-captioned incident, it has been ascertained that you
are in breach of policy conditions, among them "WARRANTED VESSEL CLASSED AND CLASS
MAINTAINED". Accordingly, we regret to advise that your claim is not compensable and hereby
DENIED." and asked for the return of the 3,000,000.
TRANS-ASIA filed a Complaint for Sum of Money against PRUDENTIAL with the RTC of Cebu City,
wherein TRANS-ASIA sought the amount of P8,395,072.26 from PRUDENTIAL, alleging that the same
represents the balance of the indemnity due upon the insurance policy in the total amount of
P11,395,072.26. TRANS-ASIA similarly sought interest at 42% per annum citing Section 243 of
Presidential Decreee No. 1460, otherwise known as the "Insurance Code," as amended.
PRUDENTIAL denied the material allegations of the Complaint and interposed the defense that TRANSASIA breached insurance policy conditions, in particular: PRUDENTIAL posits that TRANS-ASIA violated
an express and material warranty in the subject insurance contract, i.e., Marine Insurance Policy No.
MH93/1363, specifically Warranty Clause No. 5 thereof, which stipulates that the insured vessel, "M/V
ASIA KOREA" is required to be CLASSED AND CLASS MAINTAINED. According to PRUDENTIAL, on 25
October 1993, or at the time of the occurrence of the fire, "M/V ASIA KOREA" was in violation of the
warranty as it was not CLASSED AND CLASS MAINTAINED. PRUDENTIAL submits that Warranty Clause
No. 5 was a condition precedent to the recovery of TRANS-ASIA under the policy, the violation of which
entitled PRUDENTIAL to rescind the contract under Sec. 74 of the Insurance Code. By way of a
counterclaim, PRUDENTIAL sought a refund of P3,000,000.00, which it allegedly advanced to TRANSASIA by way of a loan without interest and without prejudice to the final evaluation of the claim,
including the amounts of P500,000.00, for survey fees and P200,000.00, representing attorneys fees.
Trial court ruled in favor of Prudential. It ruled that a determination of the parties liabilities hinged on
whether TRANS-ASIA violated and breached the policy conditions on WARRANTED VESSEL CLASSED
AND CLASS MAINTAINED. It interpreted the provision to mean that TRANS-ASIA is required to maintain
the vessel at a certain class at all times pertinent during the life of the policy. According to the court a
quo, TRANS-ASIA failed to prove compliance of the terms of the warranty, the violation thereof entitled
PRUDENTIAL to rescind the contract.
The court of appeals reversed the decision. It ruled that PRUDENTIAL, as the party asserting the noncompensability of the loss had the burden of proof to show that TRANS-ASIA breached the warranty,
which burden it failed to discharge. PRUDENTIAL cannot rely on the lack of certification to the effect
that TRANS-ASIA was CLASSED AND CLASS MAINTAINED as its sole basis for reaching the conclusion
that the warranty was breached. It opined that the lack of a certification does not necessarily mean
that the warranty was breached by TRANS-ASIA. Instead, it considered PRUDENTIALs admission that at
the time the insurance contract was entered into between the parties, the vessel was properly classed
by Bureau Veritas, a classification society recognized by the industry. It similarly gave weight to the
fact that it was the responsibility of Richards Hogg International (Phils.) Inc., the average adjuster hired
by PRUDENTIAL, to secure a copy of such certification to support its conclusion that mere absence of a
certification does not warrant denial of TRANS-ASIAs claim under the insurance policy.
Issue: WON Trans-Asia breached the warranty stated in the insurance policy, thus absolving Prudential
from paying Trans-Asia.
Ruling: No.
Rationale:
As found by the Court of Appeals and as supported by the records, Bureau Veritas is a classification

society recognized in the marine industry. As it is undisputed that TRANS-ASIA was properly classed at
the time the contract of insurance was entered into, thus, it becomes incumbent upon
PRUDENTIAL to show evidence that the status of TRANS-ASIA as being properly CLASSED
by Bureau Veritas had shifted in violation of the warranty. Unfortunately, PRUDENTIAL failed to
support the allegation.
The lack of a certification in PRUDENTIALs records to the effect that TRANS-ASIAs "M/V Asia Korea"
was CLASSED AND CLASS MAINTAINED at the time of the occurrence of the fire cannot be tantamount
to the conclusion that TRANS-ASIA in fact breached the warranty contained in the policy.
It was likewise the responsibility of the average adjuster, Richards Hogg International (Phils.), Inc., to
secure a copy of such certification, and the alleged breach of TRANS-ASIA cannot be gleaned
from the average adjusters survey report, or adjustment of particular average per "M/V Asia
Korea" of the 25 October 1993 fire on board.
The Supreme Court is not unmindful of the clear language of Sec. 74 of the Insurance Code which
provides that, "the violation of a material warranty, or other material provision of a policy on
the part of either party thereto, entitles the other to rescind." It is generally accepted that
"a warranty is a statement or promise set forth in the policy, or by reference incorporated
therein, the untruth or non-fulfillment of which in any respect, and without reference to
whether the insurer was in fact prejudiced by such untruth or non-fulfillment, renders the
policy voidable by the insurer."
However, it is similarly indubitable that for the breach of a warranty to avoid a policy, the same
must be duly shown by the party alleging the same. We cannot sustain an allegation that is
unfounded. Consequently, PRUDENTIAL, not having shown that TRANS-ASIA breached the
warranty condition, CLASSED AND CLASS MAINTAINED, it remains that TRANS-ASIA must be
allowed to recover its rightful claims on the policy.
Assuming arguendo that TRANS-ASIA violated the policy condition on WARRANTED VESSEL CLASSED
AND CLASS MAINTAINED, PRUDENTIAL made a valid waiver of the same.
PRUDENTIAL can be deemed to have made a valid waiver of TRANS-ASIAs breach of warranty as
alleged. Because after the loss, Prudential renewed the insurance policy of Trans-Asia for two (2)
consecutive years, from noon of 01 July 1994 to noon of 01 July 1995, and then again until noon of 01
July 1996. This renewal is deemed a waiver of any breach of warranty.
PRUDENTIAL, in renewing TRANS-ASIAs insurance policy for two consecutive years after the loss
covered by Policy No. MH93/1363, was considered to have waived TRANS-ASIAs breach of the subject
warranty, if any. Breach of a warranty or of a condition renders the contract defeasible at the option of
the insurer; but if he so elects, he may waive his privilege and power to rescind by the mere
expression of an intention so to do. In that event his liability under the policy continues as before.
There can be no clearer intention of the waiver of the alleged breach than the renewal of the policy
insurance granted by PRUDENTIAL to TRANS-ASIA in MH94/1595 and MH95/1788, issued in the years
1994 and 1995, respectively.

12.Verendia v CA G.R. No. 75605 January 22, 1993 G.R. No. 75605 January 22,
1993
Lessons Applicable: Exception to Ambiguous Provisions Interpreted Against Insurer (Insurance)
FACTS:
Rafael (Rex) Verendia's residential building was insured with Fidelity and Surety Insurance
Company, Country Bankers Insurance and Development Insurance with Monte de Piedad & Savings
Bank as beneficiary
December 28, 1980 early morning: the building was completely destroyed by fire
Fidelity refused the claim stating that there was a misrepresentation since the lessee was not Roberto
Garcia but Marcelo Garcia
trial court: favored Fidelity
CA: reversed
ISSUE: W/N there was false declaration which would forfeit his benefits under Section 13 of the policy
HELD: YES.
Section 13 thereof which is expressed in terms that are clear and unambiguous, that all benefits under
the policy shall be forfeited "If the claim be in any respect fraudulent, or if any false declaration be
made or used in support thereof, or if any fraudulent means or devises are used by the Insured or
anyone acting in his behalf to obtain any benefit under the policy"
Robert Garcia then executed an affidavit before the National Intelligence and Security Authority (NISA)
to the effect that he was not the lessee of Verendia's house and that his signature on the contract of
lease was a complete forgery.
Worse yet, by presenting a false lease contract, Verendia, reprehensibly disregarded the principle that
insurance contracts are uberrimae fidae and demand the most abundant good faith
13. Malayan Insurance Corp vs CA G.R. 119599 March 20, 1997
Facts:
TKC Marketing imported 3,000 metric tons of soya from Brazil to Manila. It was insured by Malayan at
the value of almost 20 million pesos. The vessel, however, was stranded on South Africa because of a
lawsuit regarding the possession of the soya. TKC consulted Malayan on recovery of the amount, but
the latter claimed that it wasnt covered by the policy. The soya was sold in Africa for Php 10 million,
but TKC wanted Malayan to shoulder the remaining value of 10 million as well.
Petitioner filed suit due to Malayans reticence to pay. Malayan claimed that arrest by civil authorities
wasnt covered by the policy. The trial court ruled in TKCs favor with damages to boot. The appellate
court affirmed the decision under the reason that clause 12 of the policy regarding an excepted risk

due to arrest by civil authorities was deleted by Section 1.1 of the Institute War Clauses which covered
ordinary arrests by civil authorities. Failure of the cargo to arrive was also covered by the Theft,
Pilferage, and Non-delivery Clause of the contract. Hence this petition.
Issues:
1. WON the arrest of the vessel was a risk covered under the subject insurance policies.
2. WON the insurance policies must strictly construed against the insurer.
Held: Yes. Yes. Petition dismissed.
Ratio:
1. Section 12 or the "Free from Capture & Seizure Clause" states: "Warranted free of capture, seizure,
arrest, restraint or detainment, and the consequences thereof or of any attempt thereat Should
Clause 12 be deleted, the relevant current institute war clauses shall be deemed to form part of this
insurance.
This was really replaced by the subsection 1.1 of section 1 of Institute War Clauses (Cargo) which
included the risks excluded from the standard form of English Marine Policy by the clause warranted
free of capture, seizure, arrest, restraint or detainment, and the consequences thereof of hostilities or
warlike operations, whether there be a declaration of war or not.
The petitioners claim that the Institute War Clauses can be operative in case of hostilities or warlike
operations on account of its heading "Institute War Clauses" is not tenable. It reiterated the CAs stand
that its interpretation in recent years to include seizure or detention by civil authorities seems
consistent with the general purposes of the clause. This interpretation was regardless of the fact
whether the arrest was in war or by civil authorities.
The petitioner was said to have confused the Institute War clauses and the F.C.S. in English law.
It stated that "the F.C. & S. Clause was "originally incorporated in insurance policies to eliminate the
risks of warlike operations". It also averred that the F.C. & S. Clause applies even if there be no war or
warlike operations. In the same vein, it contended that subsection 1.1 of Section 1 of the Institute War
Clauses (Cargo) "pertained exclusively to warlike operations" and yet it also stated that "the deletion
of the F.C. & S. Clause and the consequent incorporation of subsection 1.1 of Section 1 of the Institute
War Clauses (Cargo) was to include "arrest, etc. even if it were not a result of hostilities or warlike
operations."
The court found that the insurance agency tried to interpret executive and political acts as those not
including ordinary arrests in the exceptions of the FCS clause , and claims that the War Clauses now
included executive and political acts without including ordinary arrests in the new stipulation.
A strained interpretation which is unnatural and forced, as to lead to an absurd conclusion or to render
the policy nonsensical, should, by all means, be avoided.
2. Indemnity and liability insurance policies are construed in accordance with the general rule of
resolving any ambiguity therein in favor of the insured, where the contract or policy is prepared by the
insurer. A contract of insurance, being a contract of adhesion, means that any ambiguity should be
resolved against the insurer.

14.FINMAN GENERAL ASSURANCE CORPORATION vs. THE HONORABLE COURT OF

APPEALS 213 SCRA 493, September 2, 1992 NOCON, J.:
FACTS:
On October 22, 1986, deceased, Carlie Surposa was insured with petitioner Finman General Assurance
Corporation with his parents, spouses Julia and Carlos Surposa, and brothers Christopher, Charles,
Chester and Clifton, all surnamed, Surposa, as beneficiaries. While said insurance policy was in full
force and effect, the insured, Carlie Surposa, died on October 18, 1988 as a result of a stab wound
inflicted by one of the three (3) unidentified men. Private respondent and the other beneficiaries of
said insurance policy filed a written notice of claim with the petitioner insurance company which
denied said claim contending that murder and assault are not within the scope of the coverage of the
insurance policy. Private respondent filed a complaint with the Insurance Commission which rendered a
favorable response for the respondent. The appellate court ruled likewise. Petitioner filed this petition
alleging grave abuse of discretion on the part of the appellate court in applying the principle of
"expresso unius exclusio alterius" in a personal accident insurance policy, since death resulting from
murder and/or assault are impliedly excluded in said insurance policy considering that the cause of
death of the insured was not accidental but rather a deliberate and intentional act of the assailant.
Therefore, said death was committed with deliberate intent which, by the very nature of a personal
accident insurance policy, cannot be indemnified.
ISSUE: Whether or not the insurer is liable for the payment of the insurance premiums
HELD:
Yes, the insurer is still liable. Contracts of insurance are to be construed liberally in favor of the insured
and strictly against the insurer. Thus ambiguity in the words of an insurance contract should be
interpreted in favor of its beneficiary. The terms "accident" and "accidental" as used in insurance
contracts have not acquired any technical meaning, and are construed by the courts in their ordinary
and common acceptation. Thus, the terms have been taken to mean that which happen by chance or
fortuitously, without intention and design, and which is unexpected, unusual, and unforeseen. Where
the death or injury is not the natural or probable result of the insured's voluntary act, or if something
unforeseen occurs in the doing of the act which produces the injury, the resulting death is within the
protection of the policies insuring against death or injury from accident. In the case at bar, it cannot be
pretended that Carlie Surposa died in the course of an assault or murder as a result of his voluntary act
considering the very nature of these crimes. Neither can it be said that where was a capricious desire
on the part of the accused to expose his life to danger considering that he was just going home after
attending a festival. Furthermore, the personal accident insurance policy involved herein specifically
enumerated only ten (10) circumstances wherein no liability attaches to petitioner insurance company
for any injury, disability or loss suffered by the insured as a result of any of the stimulated causes. The
principle of " expresso unius exclusio alterius" the mention of one thing implies the exclusion of
another thing is therefore applicable in the instant case since murder and assault, not having been
expressly included in the enumeration of the circumstances that would negate liability in said
insurance policy cannot be considered by implication to discharge the petitioner insurance company
from liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the petitioner
insurance company to include death resulting from murder or assault among the prohibited risks leads
inevitably to the conclusion that it did not intend to limit or exempt itself from liability for such death.