WHITE GOLD MARINE SERVICES, INC., Petitioners, vs.

PIONEER INSURANCE AND SURETY CORPORATION AND THE STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION (BERMUDA) LTD., Respondents. DECISION QUISUMBING, J.: This petition for review assails the Decision 1 dated July 30, 2002 of the Court of Appeals in CA-G.R. SP No. 60144, affirming the Decision 2 dated May 3, 2000 of the Insurance Commission in I.C. Adm. Case No. RD-277. Both decisions held that there was no violation of the Insurance Code and the respondents do not need license as insurer and insurance agent/broker. The facts are undisputed. White Gold Marine Services, Inc. (White Gold) procured a protection and indemnity coverage for its vessels from The Steamship Mutual Underwriting Association (Bermuda) Limited (Steamship Mutual) through Pioneer Insurance and Surety Corporation (Pioneer). Subsequently, White Gold was issued a Certificate of Entry and Acceptance. 3Pioneer also issued receipts evidencing payments for the coverage. When White Gold failed to fully pay its accounts, Steamship Mutual refused to renew the coverage. Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to recover the latter’s unpaid balance. White Gold on the other hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual violated Sections 1864 and 1875 of the Insurance Code, while Pioneer violated Sections 299, 63007 and 3018 in relation to Sections 302 and 303, thereof. The Insurance Commission dismissed the complaint. It said that there was no need for Steamship Mutual to secure a license because it was not engaged in the insurance business. It explained that Steamship Mutual was a Protection and Indemnity Club (P & I Club). Likewise, Pioneer need not obtain another license as insurance agent and/or a broker for Steamship Mutual because Steamship Mutual was not engaged in the insurance business. Moreover, Pioneer was already licensed, hence, a separate license solely as agent/broker of Steamship Mutual was already superfluous. The Court of Appeals affirmed the decision of the Insurance Commissioner. In its decision, the appellate court distinguished between P & I Clubs vis-à-vis conventional insurance. The appellate court also held that Pioneer merely acted as a collection agent of Steamship Mutual. In this petition, petitioner assigns the following errors allegedly committed by the appellate court,

FIRST ASSIGNMENT OF ERROR THE COURT A QUO ERRED WHEN IT RULED THAT RESPONDENT STEAMSHIP IS NOT DOING BUSINESS IN THE PHILIPPINES ON THE GROUND THAT IT COURSED . . . ITS TRANSACTIONS THROUGH ITS AGENT AND/OR BROKER HENCE AS AN INSURER IT NEED NOT SECURE A LICENSE TO ENGAGE IN INSURANCE BUSINESS IN THE PHILIPPINES. SECOND ASSIGNMENT OF ERROR THE COURT A QUO ERRED WHEN IT RULED THAT THE RECORD IS BEREFT OF ANY EVIDENCE THAT RESPONDENT STEAMSHIP IS ENGAGED IN INSURANCE BUSINESS. THIRD ASSIGNMENT OF ERROR THE COURT A QUO ERRED WHEN IT RULED, THAT RESPONDENT PIONEER NEED NOT SECURE A LICENSE WHEN CONDUCTING ITS AFFAIR AS AN AGENT/BROKER OF RESPONDENT STEAMSHIP. FOURTH ASSIGNMENT OF ERROR THE COURT A QUO ERRED IN NOT REVOKING THE LICENSE OF RESPONDENT PIONEER AND [IN NOT REMOVING] THE OFFICERS AND DIRECTORS OF RESPONDENT PIONEER. 9 Simply, the basic issues before us are (1) Is Steamship Mutual, a P & I Club, engaged in the insurance business in the Philippines? (2) Does Pioneer need a license as an insurance agent/broker for Steamship Mutual? The parties admit that Steamship Mutual is a P & I Club. Steamship Mutual admits it does not have a license to do business in the Philippines although Pioneer is its resident agent. This relationship is reflected in the certifications issued by the Insurance Commission. Petitioner insists that Steamship Mutual as a P & I Club is engaged in the insurance business. To buttress its assertion, it cites the definition of a P & I Club in Hyopsung Maritime Co., Ltd. v. Court of Appeals10 as “an association composed of shipowners in general who band together for the specific purpose of providing insurance cover on a mutual basis against liabilities incidental to shipowning that the members incur in favor of third parties.” It stresses that as a P & I Club, Steamship Mutual’s primary purpose is to solicit and provide protection and indemnity coverage and for this purpose, it has engaged the services of Pioneer to act as its agent. Respondents contend that although Steamship Mutual is a P & I Club, it is not engaged in the insurance business in the Philippines. It is merely an association of vessel owners who have come together to provide mutual protection against liabilities incidental to shipowning.11 Respondents aver Hyopsung is inapplicable in this case because the issue in Hyopsung was the jurisdiction of the court over Hyopsung.
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Costs against respondents. We note that Steamship Mutual even renewed its P & I Club cover until it was cancelled due to non-payment of the calls. in proportion to their interest. Since a contract of insurance involves public interest. No person shall act as an insurance agent or as an insurance broker in the solicitation or procurement of applications for insurance. The petitioner’s prayer for the revocation of Pioneer’s Certificate of Authority and removal of its directors and officers. any commission or other compensation from any insurance company doing business in the Philippines or any agent thereof. However. 2000 of the Insurance Commission is hereby REVERSED AND SET ASIDE. specifically recognized as constituting the doing of an insurance business within the meaning of this Code. The Steamship Mutual Underwriting Association (Bermuda) Ltd. an insurance contract is a contract of indemnity. It has been licensed to do or transact insurance business by virtue of the certificate of authority 23 issued by the same agency. Thus. or receive for services in obtaining insurance. Section 299 of the Insurance Code clearly states: SEC. mutual insurance associations. regulation by the State is necessary. contingency. 15 Section 9916 of the Insurance Code enumerates the coverage of marine insurance. need a special license? Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate of registration22 issued by the Insurance Commission. Thus. and defense costs. 14 In particular. the members all contribute. 2002 of the Court of Appeals affirming the Decision dated May 3.Is Steamship Mutual engaged in the insurance business? Section 2(2) of the Insurance Code enumerates what constitutes “doing an insurance business” or “transacting an insurance business”. In it. 2 . including a reinsurance business. 21 Does Pioneer. must secure a license from the Insurance Commission. and where the profits are divided among themselves. as surety. any insurance contract. or within six months thereafter. it needs a separate license to act as insurance agent for Steamship Mutual. we are not the forum for these issues. It maintains a resident agent in the Philippines to solicit insurance and to collect payments in its behalf. war risks. as insurer. the act required to be performed. to continue doing business here. by a system of premiums or assessments.. . 13 Basically. . is DENIED. or proposing to make. . to the creation of a fund from which all losses and liabilities are paid. any contract of suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the surety. without first procuring a license so to act from the Commissioner.12 The test to determine if a contract is an insurance contract or not. or that no separate or direct consideration is received therefor. The same provision also provides. a marine insurance undertakes to indemnify the assured against marine losses. depends on the nature of the promise. or clubs. . the fact that no profit is derived from the making of insurance contracts. It is not by what it is called. where the third party is anyone other than the P & I Club and the members. Steamship Mutual as a P & I Club is a mutual insurance association engaged in the marine insurance business. These are: (a) making or proposing to make. no insurer or insurance company is allowed to engage in the insurance business without a license or a certificate of authority from the Insurance Commission. (c) doing any kind of business. or circumstances under which the performance becomes requisite.” 19 By definition then. the petition is PARTIALLY GRANTED. protection and indemnity. (b) making. Regrettably. shall not preclude the existence of an insurance business. Relatedly. Steamship Mutual or through its agent Pioneer. White Gold seeks revocation of Pioneer’s certificate of authority and removal of its directors and officers. respectively. WHEREFORE. and the exact nature of the agreement in the light of the occurrence. provide three types of coverage. a mutual insurance company is a cooperative enterprise where the members are both the insurer and insured. .17 Additionally. Finally. damage or liability arising from an unknown or contingent event. namely. as agent/broker of Steamship Mutual. such as the losses incident to a marine adventure. (d) doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of this Code. In it. 24 Although Pioneer is already licensed as an insurance company.. The Decision dated July 30. a Certification from the Commission states that Pioneer does not have a separate license to be an agent/broker of Steamship Mutual. The records reveal Steamship Mutual is doing business in the country albeit without the requisite certificate of authority mandated by Section 18720 of the Insurance Code. and Pioneer Insurance and Surety Corporation are ORDERED to obtain licenses and to secure proper authorizations to do business as insurer and insurance agent. 299 . 18 A P & I Club is “a form of insurance against third party liability. agreements or transactions. one undertakes for a consideration to indemnify another against loss.. which must be renewed annually on the first day of January.

The insured has an insurable interest. However. During the period of the coverage. “Have you or any of your family members ever consulted or been treated for high blood pressure. diabetes. Private respondent then instituted an action for damages against petitioner and its president with the RTC of Manila asking for reimbursement for her expenses plus moral damages and attorneys fees. Ynares-Santiago: FACTS: Private respondent’s husband. Thus private respondent paid the hospitalization expenses amounting to ₱ 76. 125678) MARCH 18. 1990. Inc. The healthcare agreement entitles the respondent’s husband to avail “hospitalization benefits” and “out patients benefits. 2002 Petitioners: Respondents: Philamcare Health Systems. VS. asthma or peptic ulcer?” Read more in Medicine « The Brain Tissue on The Way to Avoid Loss Cosmetic Surgery – Don’t Cut Corners When It Comes to Safety » The application was approved and a healthcare agreement was issued for a period of one year from March 1. that he was hypertensive. In the standard application form private respondent’s husband answered “no” to the question. which may damnify a person having an insurable interest against him.00.R. Due to financial difficulties respondent brought her husband hime again. After trial. Section 10 provides: Every person has an insurable interest in the life and health: (1) of himself. and 5. Read more in Medicine « The Brain Tissue on The Way to Avoid Loss Cosmetic Surgery – Don’t Cut Corners When It Comes to Safety » Section 3 of the Insurance Code states that any contingent or unknown event. Whether or not he commit concealment when he answered “no” J. 1988 to March 1. respondent’s husband died after having fever and brought to the Chinese General Hospital. petitioner denied her claim saying that the healthcare agreement was void because of the concealment made by the respondent’s husband regarding his medical history. PHILAMCARE HEALTH SYSTEMS.” Upon termination of the agreement the same was extended covering March 1. the Court of Appeals affirmed the decision but deleted all awards for damages and absolved petitioner Reverente (President of the company). Doctors at MMC discovered. The amount of the coverage was increased to a maximum sum of ₱ 75. The insurer assumes the risk. whether past or future. On appeal. 2. of which death or illness might delay or prevent the performance. INC. 3 . private respondent’s husband suffered a heart attack and was confined at the Manila Medical Center for one month while her husband was in the hospital respondent tried to claim the benefits. 1989 to June 1. moral and exemplary damages of ₱ 10. heart trouble. Inc.00.000. of his spouse and of his children. the insured pays a premium. Ernani Triños (deceased) applied for a healthcare coverage with the petitioner Philamcare Health Systems. Court of Appeals and Julita Triños After respondent’s husband was discharged from the hospital he was attended by physical therapist at home and lated admitted to the Chinese General Hospital. 1990.000. damage or liability arising from an unknown or contingent event. 4. 1989. may be insured against. Then on April 30. liver disease. An insurance contract exists where the following elements concur: 1. In consideration of the insurer’s promise.SO ORDERED. 3. COURT OF APPEALS 379 SCRA 356 (G.00 each plus attorney’s fees. the lower court rendered a decision in favor of the respondent ordering the petitioner to pay and reimburse the medical and hospital coverage amounting to ₱ 76. or in whom he has a pecuniary interest. diabetic. (2) of any person on whom he depends wholly or in part for education or support. It was alleged that at the time of the respondent’s husband’s confinement. and asthmatic contrary to the answer in the application form. ISSUE: 1) 2) Whether a health care agreement is an insurance contract.000. Section 2 (1) of the Insurance Code defines a contract of insurance as an agreement whereby one undertakes for a consideration to indemnify another against loss.00 per disability. The insured is subject to a risk of loss by the happening of the designated peril.000. (3) of any person under a legal obligation to him for the payment of money. and (4) of any person upon whose life any estate or interest vested in him depends. Such assumption of risk is part of a general scheme to distribute actual losses among a large group of persons bearing a similar risk. respecting property or service. HELD: I. cancer. NO.. Every person has an insurable interest in the life and health of himself. Hence this instant petition for review. Petitioners motion for reconsideration was denied.

since in such case the insurer is not justified in relying upon such statement. Gulf Resorts agreed to insure with Phil Charter the properties covered by the AHAC policy provided that the policy wording and rates in said policy be copied in the policy to be issued by Phil Charter. or the impossibility of which is shown by the facts within his knowledge. the policy extended earthquake shock coverage to all of the insured properties. All the provisions and riders taken and interpreted together. v. In its ruling. Thus. II The answer assailed by petitioner was in response to the question relating to the medical history of the applicant. indubitably show the intention of the parties to extend earthquake shock coverage to the two swimming pools only. the premium becomes a debt as soon as the risk attaches. including the two swimming pools in its Agoo Playa Resort were damaged. Petitioner advised respondent that it would be making a claim under its Insurance Policy 31944 for damages on its properties.00 for a total premium of P45. Inc at Agoo. This is consistent with the history of petitioner’s insurance policies with AHAC. 1990: an earthquake struck Central Luzon and Northern Luzon so the properties and 2 swimming pools in its Agoo Playa Resort were damaged August 23. La Union was insured with American Home Assurance Company which includes loss or damage to shock to any of the property insured by this Policy occasioned by or through or in consequence of earthquake July 16. the same premium it had paid against earthquake shock only on the two swimming pools in all the policies issued by AHAC. 31944 issued by defendant. medical or any other expense arising from sickness. 1990 an earthquake struck Central Luzon and Northern Luzon and plaintiff’s properties covered by Policy No. The health care agreement was in the nature of nonlife insurance. notwithstanding what is stated in the printed conditions of this policy due to the contrary. RTC: Favored American Home . especially coming from respondent’s husband who was not a medical doctor. the break-down of premiums shows that Gulf Resorts paid only P393. no qualifications were placed on the scope of the earthquake shock coverage. that this insurance covers loss or damage to shock to any of the property insured by this Policy occasioned by or through or in consequence of earthquake • • • • • Gulf Resorts. FACTS: Read more: http://healthmad. the insurable interest of respondent’s husband in obtaining the health care agreement was his own health. "6-D" and "7-C"). casualty and marine insurance. which is primarily a contract of indemnity. 1990 to March 14. and this is likewise the rule although the statement is material to the risk. if the statement is obviously of the foregoing character. Respondent denied petitioner’s claim on the ground that its insurance policy only afforded earthquake shock coverage to the two swimming pools of the resort. or its acceptance at a lower rate of premium. (A)lthough false. "5-A". 31944 issued by defendant. In fire. as a matter of expectation or belief. the schedule clearly shows that petitioner paid only a premium of P393. The trial court ruled in favor of respondent.92. or judgment of the insured will not avoid the policy if there is no actual fraud in inducing the acceptance of the risk. Philippine Charter Insurance Corp Facts: Gulf Resorts is the owner of the Plaza Resort situated at Agoo. a representation of the expectation. belief. "3-A". intention.600. This largely depends on opinion rather than fact. In Policy No.00 against the peril of earthquake shock.endorsement rider means that only the two swimming pools were insured against earthquake shock CA: affirmed RTC ISSUE: W/N Gulf can claim for its properties aside from the 2 swimming pools 4 . Thus. the shock endorsement provided that “In consideration of the payment by the insured to the company of the sum included additional premium the Company agrees. 1991 for P10. answers made in good faith and without intent to deceive will not avoid a policy even though they are untrue. to be actually untrue. Where matters of opinion or judgment are called for. There is a clear distinction between such a case and one in which the insured is fraudulently and intentionally states to be true. "2-D".700. Issue: Whether or not the policy covers only the two swimming pools owned by Gulf Resorts and does not extend to all properties damaged therein Held: YES. no premium payments were made with regard to earthquake shock coverage except on the two swimming pools. On July 16. "4-B". 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock coverage to the two swimming pools of the resort o Petitioner contends that pursuant to this rider.00 as premium against earthquake shock (ES). the risks of loss from earthquake shock was extended only to petitioner’s two swimming pools. since in such case the intent to deceive the insurer is obvious and amounts to actual fraud. In the first 4 policies issued.In the case at bar. injury or other stipulated contingent. (Exhs. La Union and had its properties in said resort insured originally with the American Home Assurance Company (AHAC). 31944 to Gulf Resorts covering the period of March 14.com/medicine/philamcare-health-systems-inc-vs-court-ofappeals/#ixzz1zqLKqj9Q Gulf Resorts Inc. the health care provider must pay for the same to the extent agreed upon under the contract. but is obligated to make further inquiry.159. There is no mention of any premium payable for the other resort properties with regard to earthquake shock. Once the member incurs hospital. In the subject policy. Phil Charter issued Policy No. An insurance premium is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril. that which he then knows. opinion. "1-D". In Exhibit "7-C" the word "included" above the underlined portion was deleted.

T H E PHILIPPINE AMERICAN LIFE INSURANCE COMPANYG. NO. Eternal submitted a list of allnew lot purchasers.W h e n Chuang died. Eternal transmitted said documents w h i c h Philamlife was able to received. ENRIQUEZ VS. Included in this list isa certain John Chuang. the mere inaction of the i n s u r e r o n t h e insurance application must not work to prejudice the insured. Hence. o r o t h e r w i s e b e bound to honor the application as a valid.R. T hi s p r o m p t e d E t e r n a l t o de m a n d t h e i n s u r a n c e cl a i m s . o All its parts are reflective of the true intent of the parties. Moreover. itc a n n o t b e i n t e r p r e t e d a s a t e r m i n a t i o n o f t h e i n s u r a n c e contract. On November 26. the head office of the insurance company gave notice of acceptance by cable to Manila. i n s u r a n c e c o n t r a c t s ar e i m b ue d wi t h p ub l i c i n t e r e s t t h a t m us t b e c o n s i d e r e d w h e n e v e r t h e r i g h t s a n d o b l i g a t i o n s o f t h e insurer and the insured are to be delineated. Philamlife required that E t e r n a l submit certain documents relative to its insurance claim forChuang’s death. 1920 Petitioner/Appellant: Rafael Enriquez (as administrator of the estate of the late Joaquin Ma. However. t o e i t h e r d e n y o r a p p r o v e t h e s a m e . 166245. no premium payments were made with regard to earthquake shock coverage. T h e p o l i c y w a s t o b e effective for a period of one year. 9 April 2008 FACTS: :R e s p o n d e n t i n s u r a n c e c o m p a n y e n t e r e d i n t o a C r e d i t o r Gr o up L i f e P o l i c y a g r e e m e n t w i t h E t e r n a l G a r d e n s M e m o r i a l . we GRANT the petition.As required under the said policy.HELD: YES. T h e amount of insurance coverage depended upon the existingb a l a n c e o f t h e p u r c h a s e d b u r i a l l o t s . U n d e r said policy. Herrer that his application had been accepted and this was placed in the 5 HELD: YES. t o P h i l a m l i f e w h i c h s e r v e d a s a n i n s ur a n c e c l a i m for Chuang’s death. assumed the risk of loss d i s a p p r o v i n g t h e i n s u r a n c e a p p l i c a t i o n . SUN LIFE ASSURANCE CO. Mr Joaquin Herrer made an application to Sun Life Assurance Company of Canada through its office in Manila for a life annuity. valid. Insurance Code Section 2(1) contract of insurance as an agreement whereby one undertakes for a consideration to indemnify another against loss. except on the two swimming pools. However. L-15895) NOVEMBER 29. prompting Eternal tofile a case before the RTC of Makati. T h e second sentence of Creditor Group Life Policy No.000. M o r e o f t e n t h a n n o t . OF CANADA 41 PHIL 269 (G. P h i l a m l i f e d i d n o t a n y m o r e r e p l y t o E t e r n a l ’ s i n s ur a n c e c l a i m . together with t h e p e r t i n e n t p a p e r s . damage or liability arising from an unknown or contingent event • An insurance premium is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril. • It is basic that all the provisions of the insurance policy should be examined and interpreted in consonance with each other. renewable on a yearly basis. The termination of the insurance c o n t r a c t b y t h e insurer must be explicit and unambiguous. binding. P-1920 on theE f f e c t i v e D a t e o f B e n e f i t i s i n t h e n a t u r e o f a r e s o l u t o r y condition which would lead to the cessation of the insurancecontract. and binding until terminated byP h i l a m l i f e by . Two day later he paid the sum of ₱ 6. i n s u r a n c e c o n t r a c t s a r e c o n t r a c t s o f adhesion containing technical terms a n d c o n d i t i o n s o f t h e i n d us t r y . o In the subject policy. A s s uc h . No. c o n f u s i n g i f a t a l l un d e r s t a n d a b l e t o l a y p e r s o n s . a n d effective insurance contract. An insurance contract covering the lot purchaser is createdand the same is effective. after more than oney e a r . Eternal sent a letter. Herrer) Respondent/Appellee: Sun Life Assurance Company of Canada FACTS: On September 24. Affirmed. ISSUE:W h e t h e r o r n o t P h i l a m l i f e w i t h o u t approving the application. 1917.WHEREFORE. t h a t a r e i m p o s e d o n t h o s e w h o wi s h t o a v a i l o f i n s ur a n c e . 1917. the clients of Eternal who purchased burial lots fromi t o n i n s t a l l m e n t basis would be insured by Philamlife. Philamlife denied the said claim. On the same date the Manila office prepared a letter notifying Mr. ETERNAL GARDENS MEMORIAL PARK CORPORATION vs.R.00 to the manager of the company’s Manila office and was given a receipt therefor. including the application of each purchaserand their corresponding unpaid balances. in order top r o t e c t t h e i n t e r e s t o f i n s u r a n c e a p p l i c a n t s . i n s u r a n c e companies must be obligated to act with haste upon insurancea p p l i c a t i o n s .

in life insurance. entered into a lease contract with C K S D e v e l o p m e n t Corporation. Mr. prepared application form using the essential data supplied by respondent. but having failed in his effort. HELD . was never actually mailed and was never received by the applicant. When a letter or other mail matter is addressed and mailed with postage prepaid there is a rebuttable presumption of fact that it was received by the addressee as soon as it could have been transmitted to him in the ordinary course of the mails. 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. and that the latter will either approve or reject the same on the basis of whether or not the applicant is insurable on standard rates. 0 0 w i t h t h e U n i t e d I n s u r a n c e C o . with a stipul ation that "The LESSEE shall not insure against fire thechattels. The non-acceptance of the insurance plan was allegedly not communicated by Mondragon to respondent. The binding deposit receipt was issued to respondent. However. Court of Appeals » ISSUE: Whether the contract of life annuity was perfected.. the branch manager. Read more in Business « Eternal Gardens Memorial Park Corporation vs. the Cha spouses insured against loss by fire their merchandise i n s i d e t h e l e a s e d p r e m i s e s f o r P 5 0 0 . Where an agreement is made between the applicant and the agent. as lessees. Philippine American Life Insurance Company Great Pacific Life Assurance Company vs. respondent sought the payment of the proceeds of the insurance. he filed an action for the recovery of the same. But if any one of these elemental facts fails to appear.The court held that the contract for a life annuity was not perfected because it had not been proved satisfactorily that the acceptance of the application even came to the knowledge of the applicant. 0 0 0 . a ‘binding slip’ or ‘binding receipt’ does not insure by itself. Thereupon. merchandi se. and is subordinated to the act of the company in approving or rejecting the application. it wrote the insurer a demand letter a s k i n g t h a t t h e p r o c e e d s o f t h e insurance contract be paid directl y to CKS. his one year old daughter. Hence the case at bar. If theLESSEE obtain(s) the insurance thereof without the consent of the LESSOR then the policy isdeemed assigned and transferred to the LESSOR for its own benefit" Notwithstanding the abovestipulati on in the lease contract. Thus. On the day that the lease contract was to expire. it was not perfected. Issue: Whether or not the insurance contract has been perfected on the ground that a binding receipt has been issued? Held: NO. .. 1979 Facts: Respondent Ngo Hing filed an application with petitioner Great Pacific Life Assurance Company (Pacific Life) for a twenty-year endowment policy in the life of Helen Go. 1917. Great Pacific Life Assurance Co. w i t h o u t t h e written consent of CKS. as the locus pœnitentiæ is ended when the acceptance has passed beyond the control of the party. The binding deposit receipt is merely conditional and does not insure outright. Mondragon wrote his strong recommendation for the approval of the insurance application. United refused to pay CKS. based on its lease contract with the Cha spouses. Herrer died on December 20. CA Facts: Spouses Cha. The latter paid the annual premium and Mondragon retained a portion of it as his commission. The latter filed a complaint against the Cha spouses and United. Mondragon again asserted his strong recommendation. Spouses Cha vs. The acceptance is merely conditional. on behalf of the company. it is fatal to the presumption. as lessor. fire broke out inside thel e a s e d p r e m i s e s . no liability shall attach until the principal approves the risk and a receipt is given by the agent. v Court of Appeals 89 SCRA 543 April 30. The binding deposit receipt is merely an acknowledgement. I n c . textiles. Pacific Life disapproved the application since the plan was not available for minors below 7 years old but it can consider the same under another plan. Petitioner Lapulapu D. When CKS learned of the insurance earlier procured by the Cha spouses(without its consent). but as far known. Mondragon. Helen Go died of influenza. An acceptance of an offer of insurance not actually or constructively communicated to the proposer does not make a contract. Only the mailing of acceptance completes the contract of insurance. 6 .ordinary channels for transmission. goods and effects placed at any stall or store or space in the leased premises without first obtaining the written consent and approval of the LESSOR.

Held: NO. containing the ready-made clothing materials sold and delivered by IMC and LSPI was consumed by fire. Inc. Section 18 of theI n s u r a n c e C o d e p r o v i d e s t h a t " N o c o n t r a c t o r p o l i c y o f i n s u r a n c e o n p r o p e r t y s h a l l b e enforceable except for the benefit of some person having an insurable interest in the property insured.sales invoices is an exception under Article 1504 (1) of the Civil Code to res perit domino o ISSUE: W/N Insurance Company of North America can claim against Gaisano Cagayan for the debt that was isnured HELD: YES. except that: (1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer. Gaisano Cagayan. Anyone has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction. (LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss & Co IMC and LSPI separately obtained from Insurance Company of North America fire insurance policies for their book debt endorsements related to their ready-made clothing materials which have been sold or delivered to various customers and dealers of the Insured anywhere in the Philippines which are unpaid 45 days after the time of the loss February 25. petition is partly GRANTED. p u b l i c o r d e r o r public policy. in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract. under the Insurance Code be validly a beneficiary of the fire insurance policy taken by the spouses over their merchandise. T h e automatic assignment of the policy to CKS under the provision of the lease contract previouslyquoted is void for being contrary to law and/or public policy • • Gaisano Cagayan. or any relation thereto. Insurable interest in the property insuredmust exist at the time the insurance takes effect and at the time the loss occurs." Therefore. of such nature that a contemplated peril might directly damnify the insured. v. but whether insured has substantial economic interest in the property Section 13 of our Insurance Code defines insurable interest as "every interest in property. Unlike the civil law concept of res perit domino. it cannot be denied that CKS has no insurable interest in the goods and merchandi se inside the leased premises under the provisions of Section 17 of the Insurance Code which provides that "The measure of an insurable interest in property is the extent to which the insured might be damnified b y loss of injury thereof.Issue: Whether the stipulation in the lease contract. 1504. February 4. but when the ownership therein is transferred to the buyer the goods are at the buyer's risk whether actual delivery has been made or not. 1991: Gaisano Superstore Complex in Cagayan de Oro City. the subject 7 . o it is sufficient that the insured is so situated with reference to the property that he would be liable to loss should it be injured or destroyed by the peril against which it is insured o an insurable interest in property does not necessarily imply a property interest in. Thisinsurable interest over said m e r c h a n d i s e r e m a i n s w i t h t h e i n s u r e d .613 is DELETED • • insurance policy is clear that the subject of the insurance is the book debts and NOT goods sold and delivered to the customers and dealers of the insured ART. alleges that IMC and LSPI filed their claims under their respective fire insurance policies which it paid thus it was subrogated to their rights • • IMC and LSPI did not lose complete interest over the goods. It is basic in the law on contracts that the stipulations contained in a contract cannot b e c o n t r a r y t o l a w . an insurable interest in property may consist in: (a) an existing interest. where ownership is the basis for consideration of who bears the risk of loss. Insurance Company of North America (2006) FACTS: • • • • • Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. under Section 14 of the same Code. Inc. or (c) an expectancy." A non-life insurance policy such as the fire insurance policy taken by the spouses over their merchandise is primarily a contract of indemnity. while Levi Strauss (Phils.. or liability in respect thereof. g o o d c u s t o m s . is valid. the goods remain at the seller's risk until the ownership therein is transferred to the buyer. m o r a l s . order to pay P535. one's interest is not determined by concept of title. that any fire insurance policy obtained by thelessee over their merchandise inside the leased premises is deemed assigned or transferred to thelessor if said policy is obtained without the prior written consent of the latter. They have an insurable interest until full payment of the value of the delivered goods. Herein. the goods are at the buyer's risk from the time of such delivery. 1992: Insurance Company of North America filed a complaint for damages against Gaisano Cagayan. coupled with an existing interest in that out of which the expectancy arises. it must bear the loss (res perit domino) CA: Reversed . (b) an inchoate interest founded on existing interest. or possession of. CKS cannot. Inc. t h e C h a s p o u s e s . Unless otherwise agreed. whether real or personal.) Inc. Inc: not be held liable because it was destroyed due to fortuities event or force majeure RTC: IMC and LSPI retained ownership of the delivered goods until fully paid." Parenthetically. in property insurance. owned by Gaisano Cagayan. or a lien upon.

613 o the claim. COURT OF APPEALS and Spouses ROLANDO andBERNARDA BACANIG. otherwise known as the “mortgage redemption insurance. Subject to some exceptions. However. no subrogation receipt was offered in evidence. One such loan mortgagor is Dr. after about a year. the widow of the late Dr. the proceeds from such insurance will be applied to the payment of the mortgage debt. whether he has an insurable interest or not. If the plaintiff's property has been insured. In an application form. Grepalife. The insured. the mortgage obligation will be extinguished by the application of the insurance proceeds to the mortgage indebtedness.” Both the trial court and the Court of Appeals found in favor of the widow and ordered Grepalife to pay DBP. No.• • • • • matter of the insurance. 2207. which caused his death.” is a device for the protection of both the mortgagee and the mortgagor. Leuterio answered questions concerning his test. insured may thus sue. the latter denied the claim. by itself. ISSUE: • Whether the CA erred in holding Grepalife liable to DBP as beneficiary in a group life insurance contract from a complaint filed by the widow of the decedent/mortgagor HELD: The rationale of a group of insurance policy of mortgagors. Hence. o Failure to substantiate the claim of subrogation is fatal to petitioner's case for recovery of the amount of P535. and such person may recover it whatever the insured might have recovered.” When DBP submitted a death claim to Grepalife. the mortgagee is simply an appointee of the insurance fund. will or succession to any person. is primarily the proper person to bring suit thereon. As to LSPI. such non-disclosure constituted concealment that justified the denial of SUNLIFE ASSURANCE COMPANY OF CANADA vs. And since a policy of insurance upon life or health may pass by transfer. Leuterio filed a complaint against Grepalife for “Specific Performance with Damages. ample protection is given to the mortgagor under such a concept so that in the event of death. Such loss-payable clause does not make the mortgagee a party to the contract. Allegedly. the loss or destruction of anything of the same kind does not extinguish the obligation (Genus nunquan perit) The subrogation receipt. the widow of the decedent Dr. and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of. thereby relieving the heirs of the mortgagor from paying the obligation. In this type of policy insurance. although the policy is taken wholly or in part for the benefit of another person. CA 316 SCRA 677 (1999) • INSURANCE LAW: Parties in Insurance Contract FACTS: Great Pacific Life Assurance Corporation (Grepalife) executed a contract of group life insurance with Development Bank of the Philippines (DBP) wherein Grepalife agreed to insure the lives of eligible housing loan mortgagors of DBP. Leuterio may file the suit against the insurer. and neither the title nor a beneficial interest is requisite to the existence of such an interest insurance in this case is not for loss of goods by fire but for petitioner's accounts with IMC and LSPI that remained unpaid 45 days after the fire . but also the amount paid to settle the insurance claim Art. In a similar vein. the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. being the person with whom the contract was made. Dr.R. On the part of the mortgagee. Leuterio did not disclose he had been suffering from hypertension. attesting among others that he does not have any heart conditions and that he is in good health to the best of his knowledge. Leuterio died due to “massive cerebral hemorrhage. 105135 June 22. Wilfredo Leuterio. such as a mortgagee. Dr.obligation is pecuniary in nature o obligor should be held exempt from liability when the loss occurs thru a fortuitous event only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event Article 1263 of the Civil Code in an obligation to deliver a generic thing. The Hon. 1995Principle found in the case: 8 . it has to enter into such form of contract so that in the event of the unexpected demise of the mortgagor during the subsistence of the mortgage contract. Great Pacific Life vs. alleging that Dr. is sufficient to establish not only the relationship of respondent as insurer and IMC as the insured.

PRUDENTIAL insuredM/V Asia Korea for loss/damage of the hull and machinery arising from perils. TRANS-ASIA executed a document denominated "Loan and Trust receipt". Court of Appeals affirmed the decision and stated that the cause of death was unrelated to the facts concealed by the insured. inter alia.00. and which the other has no means of ascertaining and thus it provides that “ A neglect to communicate that whicha party knows and ought to communicate. Sunlife conducted an investigation and its findings prompted it to reject the claim.Sunlife discovered that two weeks prior to Robert’s application for insurance. 1993 up to July 1. blood.172.” Facts: Robert John B.e.Robert died in a plane crash. INCG. vs. all facts within his knowledge which are material to the contract and as to which he makes no warranty. ultra-sonography and hematology tests. that Robert was examined and confinedat the Lung Center of the Philippines. Thus. in goodfaith. Moreover. Reinaldo D. a disclosure may have warranted a medical examination of the insured by Sunlifein order for it to reasonably assess the risk involved in accepting the application. in forming his estimate of the disadvantages of the proposed contract or in making his inquiriesThe informati on which the insured failed to disclose were material and relevant to the approval andissuance of the insurance policy. with double indemnity in case of accidental death.Rationale: Section 26 of The Insurance Code requires a party to a contract of insurance to communicate to the other.However it must be first duly proven by the one who alleges that there was a breach of warranty.Issue: WON there was concealment and can goodfaith be used as a defense. The insured's failure to disclose the fact that he was hospitalizedfor two weeks prior to filing his application for insurance. or b y r e f e r e n c e incorporated therein. for cough and flu complications. Robert answered yes in letter a. wherein TRANS-ASIAsought the amount of P8. the sum of PESOS THREE MILLION ONLY (P3. On October 26. He was issued a Policy valued atP100. we regret to advise that yourclaim is not compensable and hereby DENIED. MH 93/1353 [sic]. of fire and explosion for thesum of P40 Million. Facts: TRANS-ASIA is the owner of the vessel M/V Asia Korea.Raymundo of the Chinese General Hospital on February 1986. a fire broke out while [M/V Asia Korea was] undergoing repairs atthe port of Cebu. 1994. beginning from the period of July 1.ASIA filed its notice of claim for damage sustained by the vessel evidenced by a letter/formal claim. the untruth or non-fulfillment of which in any respect.In his application for insurance Robert was asked if within 5 years he (a) consul ted any doctor or other health practitioner (b) subjected to different test i. During his confinement. It is well settled that the insured need not die of the disease he had failed to disclose to the insurer. or other parties.On October 25.00 was attached to said letter. A check representing the total premiums paid in the amount of P10.000. It appears that suchconcealment was deliberate on his part.395. Sunlife also filed amotion for summary judgement. raises grave doubts about his bonafides . it has been ascertained that you are in breach of policy conditions. Bacani procured a life insurance contract for himself from Sunlife. thusrendering the contract of insurance voidable. Accordingly. The designated beneficiary was his mother. BernardaBacani. 1993.072.26 from PRUDENTIAL.it held that the health history of the insured was immaterial since the insurance policy was "non-medical". but limited his answer to a consultation with a certain Dr. TRANS-ASIA filed a Complaint for Sum of Money against PRUDENTIAL with the RTC of Cebu City. TRANS-ASIA reserved its right to subsequently notify PRUDENTIAL as to the fullamount of the claim upon final survey and determination by average adjuster Richard Hogg International (Phil. from any person or persons.000.R. either by approving it with the corresponding adjustment for a higher premiumor rejecting the same. 151890 June 20.. a portion of which states that “Receivedfrom Prudential Guarantee and Assurance.among them "WARRANTED VESSEL CLASSED AND CLASS MAINTAINED".000. Moreover.000.Element of concealment “non disclosure of material fact that could mislead the insurerand affect in forming his estimates of the proposed insurance policy or in making inquiries. but solely by the probable and reasonable influence of the facts upon the party to whom communication is due. Bernarda filed a "ProposedStipulation with Prayer for Summary Judgment" where they manifested that they "have no evidence to refute the documentary evidence of concealment/misrepresentation by the decedent of his health condition. seeking the benefits of the insurance policy taken byher son. Sunlife filed a counter claim and a listof exhibits consisting of medical records furnished by the Lung Center of the Philippines. No.) of thedamage sustained by reason of fire.000. Bernarda filed a claim with sunlife. is called concealment. renders the policy voidable by the insurer. while the policy was in force.Ruling: Yes there was concealment and No the defense of goodfaith is not applicable. Inc.on account of loss by any casualty for which they may be liable occasioned by the 25 October 1993: Fire on Board. In consideration of payment of premiums. 1993 TRANS. x-rays etc."PRUDENTIAL later on denied Trans-Asia’s claim in stated in a letter that "After a careful review and evaluation of yourclaim arising from the abovecaptioned incident. corporation or corporations. The matters concealed would have definitely affected Sunlife's actionon Robert’s application. where he was diagnosed for renal failure. Trial court ruled in favor of Bernarda and concluded that although there was concealment and misrepresentation thefacts concealed by the insured were made in good faith and under a belief that they need not be disclosed.Sunlife informed Bernarda that Robert did not disclose material facts relevant to the issuance of the policy. 2006P r i n c i p l e found in the case: a warranty is a statement or promise set forth in the policy. alleging that the same represents the balance of the indemnity due upon the insurance policy in the total amount of 9 ." and asked for the return of the 3. and without reference to whetherthe insurer was in fact prejudiced by such untruth or non-fulfillment.Bernarda subsequently filed an action for specific performance against Sunlife. (c) attended or been admitted to any hospital or othermedical facility.. PRUDENTIAL GUARANTEE and ASSURANCE INC. It issufficient that his non-disclosure misled the insurer in forming his estimates of the risks of the proposedinsurance policy or in making inquiries. repayable only in the event and to the extent that any net recoveryis made by TransAsia Shipping Corporation.”Materiality is to be determined not by the event. the deceasedwas subjected to urinalysis. " good faith" is no defense in concealment .00) as a loanwithout interest under Policy No. TRANS-ASIA SHIPPING LINES.

as the party asserting the non-compensability of the loss had the burden of proof to show that TRANS-ASIA breached the warranty.PRUDENTIAL. it becomes incumbent upon PRUDENTIAL to show evidence that the statusof TRANSASIA as being properly CLASSED by Bureau Veritas had shifted in violation of the warranty.26. Unfortunately. CLASSED AND CLASSMAINTAINED. on 25 October 1993. Marine Insurance Policy No.000. TRANS.PRUDENTIAL sought a refund of P3. 74 of the Insurance Code which provides that ."the violation of a material warranty. vs Court of Appeals On January 15. and without reference to whether the insurer was in fact prejudiced by such untruth or non-fulfillment.PRUDENTIAL can be deemed to have made a valid waiver of TRANSASIA’s breach of warranty as alleged. PRUDENTIAL made a valid waiver of the same.ASIA failed to prove compliance of the terms of the warranty. or by reference incorporated therein.P11.ASIA w a s C L A S S E D A N D C L A S S MAINTAINED as its sole basis for reaching the conclusion that the warranty was breached.00. Richards Hogg International (Phils. specifically Warranty ClauseNo. As it is undisputed that TRANS-ASIA was properly classed at the time the contract of insurance was entered into.00. MH93/1363. The court of appeals reversed the decision. which it allegedly advanced to TRANS-ASIA by way of a loan withoutinterest and without prejudice to the final evaluation of the claim. or at the time of the occurrence of the fire. Inc.00. By way of a counterclaim. Issue: WON Trans-Asia breached the warranty stated in the insurance policy. According to the court a quo. i. renders the policy voidable by the insurer.395. to secure a copy of such certification to support its conclusion that mere absence of a certification doesnot warrant denial of TRANSASIA’s claim under the insurance policy. and then again until noon of 01 July 1996. It ruled that PRUDENTIAL. issued in the years 1994and 1995.000. was considered to have waived TRANS-ASIA’s breach of the subject warranty.ASIA violated the policy condi tion on WARRANTED VESSEL CLASSED AND CLASS MAINTAINED. which burden it failed to discharge.). Assuming arguendo that TRANS.ASIA violated an express and material warranty in the subject insurance contract.072. or other material provision of a policy on the part of either party thereto.000. including the amounts of P500. This renewal is deemed a waiver of anybreach of warranty. TRANS-ASIA similarly sought interestat 42% per annum citing Section 243 of Presidential Decreee No. The Supreme Court is not unmindful of the clear language of Sec. Breach of a warrantyor of a condi tion renders the contract defeasible at the option of the insurer. from noon of 01 July1994 to noon of 01 July 1995. PRUDENTIAL submits thatWarranty Clause No. he may waive his privilege and power to rescind by the mere expression of an intention so to do." It is generally accepted that "a warranty is a statement or promiseset forth in the policy.e.) Inc. Becauseafter the loss.." asamended. it remains that TRANS-ASIA must be allowed to recover its rightful claims on the policy.. which stipul ates that the insured vessel.P R U D E N T I A L cannot rely on the lack of certification to the effect that TRANS. 74 of the Insurance Code. Itinterpreted the provision to mean that TRANS-ASIA is required to maintain the vessel at a certain class at all timespertinent during the life of the policy." However.MH93/1363. if any. in renewing TRANS-ASIA’s insurance policy for two consecutive years after the loss covered by Policy No. it is similarly indubitable that for the breach of a warranty to avoid a policy. the vessel wasproperly classed by Bureau Veritas. respectively. Bureau Veritas is a classification society recognized in the marine industry. Ruling: No. "M/V ASIAKOREA" was in violation of the warranty as it was not CLASSED AND CLASS MAINTAINED. In that event his liability under thepolicy continues as before.It was likewise the responsibility of the average adjuster. It similarly gave weight to thef a c t t h a t i t w a s t h e responsibility of Richards Hogg International (Phils. the a v e r a g e a d j u s t e r h i r e d b y PRUDENTIAL. or adjustment of particular average per "M/V Asia Korea" of the 25 October 1993 fire on board. "M/V ASIA KOREA" is required to be CLASSED AND CLASS MAINTAINED. thus . 2012 10 . Trial court ruled in favor of Prudential. the untruth or non. 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. The lack of a certification in PRUDENTIAL’s records to the effect that TRANS-ASIA’s "M/V Asia Korea" was CLASSED ANDCLASS MAINTAINED at the time of the occurrence of the fire cannot be tantamount to the conclusion that TRANS-ASIAin fact breached the warranty contained in the policy. the violation of which entitled PRUDENTIAL to rescind the contract under Sec. 5 was a condition precedent to the recovery of TRANS-ASIA under the policy. thus absolving Prudential from paying Trans-Asia. 5 thereof. otherwise known as the "Insurance Code. It ruled that a determination of the parties’ liabilities hinged on whether TRANS-ASIA violated and breached the policy conditi ons on WARRANTED VESSEL CLASSED AND CLASS MAINTAINED. entitles the other to rescind.Rationale:A s f o u n d b y t h e C o u r t o f A p p e a l s a n d a s s u p p o r t e d b y the records. Consequently.ASIA. in particular: PRUDENTIAL posits that TRANS. a classification society recognized by the industry. We cannot sustai n an allegation that is unfounded. Instead. not having shown that TRANS-ASIA breached the warranty condition. for surveyfees and P200. PRUDENTIAL failed to support the allegation. but if he so elects. to secure a copy of such certification.fulfillment of which inany respect. It opined that the lack of acertification does not necessarily mean that the warranty was breached by TRANS. PRUDENTIAL. 1460..000. the same must be dulys h o w n b y t h e party alleging the same. Philamcare Health Systems Inc. the violation thereof entitled PRUDENTIAL to rescind the contract. representing attorney’s fees. Prudential renewed the insurance policy of Trans-Asia for two (2) consecutive years. According to PRUDENTIAL.PRUDENTIAL denied the material allegations of the Complaint and interposed the defense that TRANS-ASIA breachedinsurance policy conditions. it consi deredPRUDENTIAL’s admission that at the time the insurance contract was entered into between the parties.ASIA cannot be gleaned from the average adjuster’s survey report . and the alleged breach of TRANS.

as far as she knew. be determined objectively. Ernani eventually died. petitioner herein. A man’s state of mind or subjective belief is not capable of proof in our judicial process. of course. she testified that she was not aware of any serious illness suffere by her late husband and that. her husband had died because of kidney disorder.Insurance Law – Representation – Concealment – Rescission of an Insurance Contract In 1988. should have taken the necessary steps to void the health coverage agreement prior to the filing of the suit by Julita. Therefore. HELD: No. On August 2. hw applied for Thelma Vda. 1982. in assessing the risk involved in making or omitting to make further inquiries and in accepting the application for insurance. While the coverage was still in force in 1990. Further. Philamcare never gave notice to Julita of the fact that they are voiding the agreement. COURT OF APPEALS 223 SCRA 443 (G. VDA.000. The Commission ruled in her favor but was reversed on appeal. NO. liver disease. He answered the question with good faith. The health coverage agreement entered upon by Ernani with Philamcare is a non-life insurance contract and is covered by the Insurance Law. He was not a medical doctor hence his statement in answering the question asked of him when he was applying is an opinion rather than a fact. His coverage was subsequently renewed twice for one year each. he died of “congested heart failure”. De Canilang Court of Appeals and Great Pacific Life Assurance Corporation 11 .00. The cost of the hospitalization amounted to P76.” The widow and beneficiary. Ernani Trinos applied for a health care insurance under the Philamcare Health Systems. Julita Trinos. Materiality relates rather to the “probable and reasonable influence of the facts” upon the party to whom the communication should have been made. wife of Ernani. 1993 Petitioner: Respondent: FACTS: On June 18. There is no concealment on the part of Ernani. he answered no. diabetes. heart trouble. Philamcare refused to pay as it alleged that Ernani failed to disclose the fact that he was diabetic. filed a claim before Philamcare for them to pay the hospitalization cost. medical or any other expense arising from sickness. required a higher premium for the same coverage. ISSUE: Whether the deceased insured made a material concealment as the state of his health at the time of the filing of insurance application. Ernani suffered a heart attack for which he was hospitalized.” On the next day. Wilfredo B. asthma. His application was approved and it was effective for one year.” He again consulted the same doctor on August 3. Once the member incurs hospital. Philamcare alleged that the health coverage is not an insurance contract. Answers made in good faith will not void the policy. 92492) JUNE 17. “anemia” and “chronic anemia. that “probable and reasonable influence of the facts” concealed must. HELD: We agree with the Court of Appeals that 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. the health care provider must pay for the same to the extent agreed upon under the contract. The materiality of the information withheld by Great Pacific did not depend upon the state of mind of Jaime Canilang. except through proof of external acts or failure to act from which inferences as to his subjective belief may be reasonably drawn. that the concealment made by Ernani voided the agreement. He was diagnosed as from “sinus tachycardia. a “non-medical” insurance policy with Great Pacific Life Assurance Company naming his wife Thelma Canilang as his beneficiary. in believing there was concealment. at the very least. and asthmatic. Julita sued Philamcare for damages. Jaime Canilang consulted Dr. ISSUE: Whether or not Philamcare can avoid the health coverage agreement. Neither does materiality depend upon the actual or physical events which ensue. 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 or. August 4. Philamcare should pay the expenses paid by Julita. 1983 upon the ground that the insured had concealed material information from it. Julita ended up paying the hospital expenses. He was asked if he was ever treated for high blood. DE CANILANG VS. 1982 and this time was found to have “acute bronchitis. or peptic ulcer. by the judge ultimately. filed a claim with Great Pacific which the insured denied on December 5. At the hearing of the complaint she filed with Insurance Commission. It is primarily a contract of indemnity. in the insurance application. 1983. hypertensive. the diagnosis made and the medicines prescribed by such doctor. Claudio. Had Canilang disclosed his visits to his doctor.R. 1982. injury or other stipulated contingent. Philamcare. cancer. In July 1990.