INSULARLIFEvsFELICIANO(1941)

September2,2014
ADVERTISEMENTS
RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.L47593September13,1941
THEINSULARLIFEASSURANCECO.,LTD.,peoner,
vs.
SERAFIND.FELICIANOandANGEL,FLORENDA,EUGENIO,HERMINIOandLETICIA,allsurnamedFELICIANO,represented
bytheirguardianadlitemSERAFIND.FELICIANO,respondents.
Araneta,Zaragosa,Araneta&Baustaforpeoner.
DelnJovenforrespondents.DECISIONLAUREL,J.:
OneEvaristoFelicianoledanapplicaonforinsurancewiththehereinpeoneruponthesolicitaonofoneofitsagents.
TwoinsurancepoliciestotheaggregateamountofP25,000wereissuedtohim.FelicianodiedonSeptember29,1935.The
defendantcompanyrefusedtopayonthegroundthatthepolicieswerefraudulentlyobtained,theinsuredhavinggiven
falseanswersandstatementsintheapplicaonaswellasinthemedicalreport.Thepresentaconwasbroughttorecover
onsaidpolicies.Thelowercourtrenderedjudgmentinfavoroftheplains.Thelowercourtfoundthatattheme
Felicianoledhisapplicaonandatthemehewassubjectedtophysicalexaminaonbythemedicalexaminerofthe
hereinpeoner,hewasalreadysueringfromtuberculosis.Thisfactappearsinthenegavebothintheapplicaonandin
themedicalreport.Thelowercourt,aeranexhausveexaminaonoftheconicngtesmonies,alsofoundthatFeliciano
wasmadetosigntheapplicaonandtheexaminersreportinblank,andthataerwardstheblankspacesthereinwere
lledinbytheagentandthemedicalexaminer,whomadeitappearthereinthatFelicianowasatsubjectforinsurance.
Thelowercourtalsoheldthatneithertheinsurednoranymemberofhisfamilyconcealedtherealstateofhealthofthe
insured.Thatasamaeroffacttheinsured,aswellasthemembersofhisfamily,toldtheagentandthemedicalexaminer
thattheapplicanthadbeensickandcoughingforsomemeandthathehadalsogonethreemestotheSantolSanitarium.
Onappeal,thisndingoffactsofthelowercourtwassustainedbytheCourtofAppeals.Thisconcludesthecontroversy
overthefactsinsofarasthisCourtisconcerned.
Therstassignmentoferrorofthepeonerraisesthequesonwearenowcalledupontodecide:
TheCourtofAppealserredinholdingthataninsurancecompanyhasnorighttoavoidapolicywhereitsagentknowingly
andintenonallywrotedowntheanswersintheapplicaondieringfromthosemadebytheinsured,indisregardofthe
exceponthatwhentheagent,insteadofservingtheinterestsofhisprincipal,actsinhisownoranothersinterestand
adverselytothatofhisprincipal,thesaidprincipalisnotboundbysaidactsoftheagent.

Ontheproposionthuspresented,therearetwomainavenuesofapproachindicated:oneleadingtothevalidaonofa
policywhereitsagent,withoutfraud,collusionorbadfaithonthepartoftheinsured,falsiedtheanswersgivenbythe
insured;andtheother,leadingtotheavoidanceofthepolicyunderthecircumstances.Weseenoneedforanextended
discussionoftheconicngauthories.Whenevercourtsaregiventhechoicebetweentwoconicngprinciples,the
determinavefactwhichshouldswaythemistheconformityofitscontemplatedcoursetoreasonandtothecommon
senseofthesituaon.Thelifeofthelawisnotonlylogicbutexperience.
Thephenomenalgrowthofinsurancefromalmostnothingahundredyearsagotoitspresentgigancproporonisnotof
theoutstandingmarvelsofpresentdaybusinesslife.Thedemandforeconomicsecurity,thegrowingneedforsocial
stability,andtheclamorforproteconagainstthehazardsofcruelcripplingcalamiesandsuddeneconomicshocks,have
madeinsuranceoneofthefeltnecessiesofmodernlife.Insuranceisnolongerarichmansmonopoly.Uponitareheaped
theassuredhopesofmanyfamiliesofmodestmeans.Itiswoven,asitwere,intotheverywarpandwoofofnaonal
economy.Ittouchestheholiestandmostsacredesinthelifeofmanloveofparents,loveofwivesandloveofchildren.It
isofcommonknowledgethatthesellingofinsurancetodayissubjectedtothewhirlwindpressureofmodernsalesmanship.
Insurancecompaniessenddetailedinstruconstotheiragentstosolicitandprocureapplicaons.Theseagentsaretobe
foundalloverthelengthandbreadthoftheland.Theyaresmulatedtomoreacveeortsbycontestsandbythekeen
compeonoeredbyotherrivalinsurancecompanies.Theyaresuppliedwithblankapplicaonsandpaidlarge
commissionsonthepoliciessecuredbythem.Alltransaconsaregenerallydonethroughtheseagents.Theyact,infactand
intheory,asthegeneralrepresentavesoftheinsurancecompanies.Theysupplyalltheinformaon,prepareandanswer
theapplicaons,submittheapplicaonstotheircompanies,concludethetransacons,andotherwisesmoothoutall
dicules.Theagents,inshort,dowhatthecompanysetthemtodo.
Inthepresentcase,theagentknewallthemethetruestateofhealthoftheinsured.Theinsurersmedicalexaminer
approvetheapplicaonknowingfullwellthattheapplicantwassick.Thesituaonisoneinwhichoneoftwoinnocent
paresmustbearalossforhisrelianceuponathirdperson.Inthiscase,itwastheinsurerwhogavetheagentauthorityto
dealwiththeapplicant.Itwastheonewhoselectedtheagent,thusimplyingthattheinsuredcouldputhistrustonhim.It
wastheonewhodraedandacceptedthepolicyandconsummatedthecontract.Itseemsreasonablethatasbetweenthe
twoofthem,theonewhoemployedandgavecharactertothethirdpersonasitsagentshouldbetheonetobeartheloss.
Thecompanyreceivedthemoneyoftheapplicantasthepriceoftherisktobetakenbyit.Ifthepolicyshouldbeavoided,it
mustbebecauseitwasvoidfromtheverybeginning,andtheresultwouldbethattheinsurer,whileitreceivedthemoney,
neverassumedanyrisk.Theresultwouldbe,inthelanguageofoneofthecases,toplaceeverysimpleoruneducated
personseekinginsuranceatthemercyoftheinsurerwhocould,throughitsagent,insertineveryapplicaon,unknownto
theapplicantandoverhissignature,somefalsestatementswhichwouldenablehimtoavoidallliabilitywhileretainingthe
pricepaidforthesupposesinsurance.(StateInsuranceCompanyv.Taylor,14Colo.499,24Pac.333.)Theweightof
authorityisthatifanagentoftheinsurer,aerobtainingfromanapplicantforinsuranceacorrectandtruthfulanswerto
interrogatoriescontainedintheapplicaonforinsurance,withoutknowledgeoftheapplicantllsinfalseanswers,either
fraudulentlyorotherwise,theinsurercannotassertthefalsityofsuchanswersasadefensetoliabilityonthepolicy,andthis
istruegenerallywithoutregardtothesubjectmaeroftheanswersorthenatureoftheagentsduesorlimitaonsonhis
authority,atleastifnotbroughttotheaenonoftheapplicant.
Thefactthattheinsureddidnotreadtheapplicaonwhichhesigned,isnotindicaveofbadfaith.Ithasbeenheldthatitis
notnegligencefortheinsuredtosignanapplicaonwithoutrstreadingitiftheinsurerbyitsconductinappoinngthe

agentinuencedtheinsuredtoplacetrustandcondenceintheagent.(DenHartogv.HomeNat.Ins.Asso.,197Iowa,143
196N.W.944.)AsthecourtsaidinthecaseofGermaniaL.Ins.Co.v.Lunkebiemer,127Ind.538,26N.E.1082,Norcanit
besaidthattheassured,whohasfully,frankly,truthfully,andingoodfaithansweredalltherequiredquesons,isguiltyof
negligenceinsigning,withoutreading,theapplicaonwhichisthereuponpreparedbytheagent.Heisjusedinassuming
thattheagenthas,withequalgoodfaith,truthfullyrecordedtheanswersgivenhim.Hemaywellsaytothecompany:You
accreditedthismantomeasyourrepresentaveandIsignedtheapplicaonthuspreparedbyhim,relyinguponthe
characterwhichyougavehimwhenyoucommissionedhimtocometomeasyouragent.Ifheacteddishonestlyinthe
maer,youandnotImustsuertheconsequences.Intheinstantcase,ithasbeenprovedthattheinsuredcouldnot
readEnglish,thelanguageinwhichtheapplicaonwaswrien,andthataerthecontractwassigned,itwaskeptbyhis
mother.Asaconsequence,theinsuredhadnoopportunitytoreadorcorrectanymisstatementtherein.(BillofExcepons,
pp.6061.)
Wehavenotbeeninsensibletotheappealthatthecoursewehavefollowedmayleadtofraudandworkhardshipon
insurancecompanies,foritwouldbeeasyforinsuranceagentsandapplicantstoinsertfalseanswersintheirapplicantsto
insertfalseanswersintheirapplicaonsforinsurance.Thismeansthatitistotheparcularinterestofthesecompaniesto
exercisegreatercareintheseleconoftheiragentsandexaminers.Theirproteconissllintheirownhandsandwhich
maybeachievedbyothermeans.Withal,theaainmentofacommongoodmayinvolveimpairmentandevensacriceof
benecialinterestsofaparculargroup,butinlife,compromiseisinevitableunlthehourofdoomstrikes.
ThepeonisherebyDISMISSEDandthejudgmentsoughttobereviewedisAFFIRMEDwithcostsagainstthepeoner.
SOORDERED.
AbadSantos,Diaz,andHorrilleno,JJ.,concur.
JusceOzaeta:DissenngOpinion
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