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CONCELMENT CASE:

1.Argente v. West Coast Life Insurance Co 2. Lincoln National Life v. San Juan Facts: An employer insured the life
Facts: A joint life insurance policy was issued to Bernardo Argente and his of the employee with two insurance companies. A severed head was later
wife Vicenta upon payment of premium, by West Coast. “How frequently do found, purportedly that of the insured employee. The insurance companies
you use beer, wine, spirits and other intoxicants?” she answered “beer only refused to pay on the ground that the employer had no insurable interest.
in small quantities”. Issue: Whether or not on the basis of the Issue:Whether or not the employer can recover the proceeds of a life
misrepresentations of Vicenta, Bernardo is barred from recovery. insurance policy of his employee. Held:NO.The insured was a tenant in a
Held: YES. The court found that the representations made by Vicenta in his coconut land owned by the employer and his earning were barely that of a
application for life insurance were false with respect to her state of health farm laborer. It was established that the insured could not have afforded the
and that she knew and was aware that the representations so made by her insurance policies drawn on his life. The policies were also found to have
were false. In an action on a life insurance policy where the evidence been acquired in quick succession. It was found that the various postal
conclusively shows that the answers to questions concerning diseases were money orders issued in payment of the premiums were made by the
untrue, the truth or falsity of the answer becomes the determining factor. employer. It appears that, based on the circumstances and evidence, the
If the policy was procured by fraudulent misrepresentations, the contract of insurance was really taken out by the employer.
insurance apparently set forth therein was never legally existent. It can be
fairly assumed that had the true facts been disclosed by the insured, the 3. Gercio v. Sun Life Facts: The policy did not include any provision
insurance would never have been granted. reserving to Gercio the right to change the beneficiary.The wife was convicted
of adultery and a decree of divorce was issued.Sunlife refused to change the
beneficiary.Issue:Whether or not Gercio may change the beneficiary in the
2. Vda. De Canilang v. CA - Concealment policy.Held:NO.If the policy contains no provision authorizing a change of
Facts: Canilang consulted Dr. Claudio and was diagnosed as suffering from beneficiary without the beneficiary’s consent, the insured cannot make such
"sinus tachycardia." died of "congestive heart failure," "anemia," and change. It is held that a life insurance policy of a husband made payable to
"chronic anemia." Issue: Whether or not Grepalife is liable. his wife as a beneficiary is the separate property of the beneficiary and
Held: No. Grepalife is not Liable. The fact that Canilang failed to disclose that beyond the control of the husband. (NOTE: this case is based on the old rule
he had twice consulted Dr. Claudio who had found him to be suffering from under the Insurance Act)Court also held that the designation of a beneficiary
"sinus tachycardia" and "acute bronchitis. Under the relevant provisions of that is originally valid does NOT render it invalid but to a subsequent cessation
the Insurance Code, the information concealed must be information which of the interests between the beneficiary and insured.
the concealing party knew and "ought to [have] communicate[d]," that is to
say, information which was "material to the contract. The information which 4. Philamlife v. Pineda Facts: On Jan. 15 1963, Dimayuga processed an
Canilang failed to disclose was material to the ability of Grepalife to estimate ordinary life insurance policy from Philamlife and designated his wife and
the probable risk he presented as a subject of life insurance. Such failure children as irrevocable beneficiaries.Issue:Whether or not the court erred in
precisely constituted concealment on the part of Canilang. If Canilang’s granting Dimayuga’s petition. Held: YES. Under the Insurance Act, the
argument is accepted, would obviously erase Section 27 from the Insurance beneficiary designated in a life insurance contract cannot be changed without
Code of 1978. the consent of the beneficiary because he has a vested interest in the
policy. The policy contract states that the designation of the beneficiaries is
3. Sunlife v CA irrevocable. Therefore, based on the said provision of the contract, not to
Facts: Robert John B. Bacani procured a life insurance contract for himself mention the law then applicable, it is only with the consent of all the
from Sunlife. The insured died in a plane crash. The deceased answered beneficiaries that any change or amendment in the policy may be legally and
claimed that he consulted a Dr. Raymundo of the Chinese General Hospital validly effected. The contract between the parties is the law binding on
for cough and flu complications. The other questions were answered in the them. (This case rule is no longer controlling under the Insurance Code.)
negative. Issue: WON the insured was guilty of misrepresentation
which made the contract void. Held: Yes. Petition dismissed. Under the 5. Southern Luzon Employees' Ass. V. Golpeo FACTS:Two sets of
law, “A neglect to communicate that which a party knows and ought to claimants presented themselves: Juanita Golpeo, legal wife and her
communicate, is called concealment.” “Materiality is to be determined not by children, named beneficiaries by the deceased.
the event, but solely by the probable and reasonable influence of the facts ISSUE: W/N Aquilina Molales common-law wife and her illegitimate
upon the party to whom communication is due, in forming his estimate of the children can claim the benefits. HELD: YES.
disadvantages of the proposed contract or in making his inquiries.” In the Juanita Golpeo, by her silence and actions, had acquiesced in the illicit
case at bar, the insured's failure to disclose the fact that he was hospitalized relations between her husband and appellee Aquilina Maloles
raises grave doubts about his eligibility. Such concealment was deliberate on new Civil Code recognized certain successional rights of illegitimate children
his part. The argument, that petitioner's waiver of the medical examination
of the insured debunks the materiality of the facts concealed, is untenable. Under the law, Insurance code is not applicable because the plaintiff is a
It is well settled that the insured need not die of the disease he had failed to mutual benefit association as defined in Administrative Code. This is not a
disclose to the insurer. It is sufficient that his non-disclosure misled the regular insurance company but merely ruled that the death benefit in
insurer in forming his estimates of the risks of the proposed insurance policy question is analogous to an insurance. Moreover, Revised Administrative
or in making inquiries. Code defines a mutual benefit association as one, among others, "providing
for any method of accident or life insurance among its members out of dues
4. Yu Pang Cheng v. CA- Life Facts: Yu Pang Eng obtained a life insurance or assessments collected from the membership."
policy naming his brother Yu Pang Cheng as beneficiary. Eng subsequently
died of medullary carcinoma, Grade 4, advanced and lesser curvature. Cheng
claims the proceeds of the policy. Insurance co. refused due to the 6. Villanueva v. Oro Facts: The policy also gave her the right to change
concealment. Issue: Whether or not the policy is void. the beneficiary. In 1940, Bartolome died, and he was substituted as
Held: YES. In the application for the policy, Eng was asked whether he had beneficiary under the policies by Mariano, Esparanza’s brother. Issue:
been ill or had consulted a doctor due to symptoms or illnesses enumerated Whether or not the beneficiary is entitled to the proceeds.
in the questionnaire. He answered “ No”, when in fact he was hospitalized
seven months prior to his application for the said policy. “A neglect to Held: NO. Under the policies, the insurer obligated itself to pay the insurance
communicate that which a party knows and ought to communicate, is called proceeds to: (1) the insured if the latter lived on the dates of maturity; or (2)
concealment.” “Materiality is to be determined not by the event, but solely the beneficiary if the insured died during the continuance of the policies. The
by the probable and reasonable influence of the facts upon the party to whom first contingency excludes the second, and vice versa. In other words, as the
communication is due, in forming his estimate of the disadvantages of the insured Esperanza was living on April 1 and March 31, 1943, the proceeds
proposed contract or in making his inquiries.” are payable exclusively to her or to her estate unless she had before her
death otherwise assigned the matured policies. The beneficiary could be
entitled to said proceeds only in default of the first contingency. To sustain
the beneficiary’s claim would be to altogether eliminate from the policies the
condition that the insurer “agrees to pay to the insured if living.” The interest
INSURABLE INTEREST: 1. Col. C. Castro v. Insurance Commissioner
of the insured in the proceeds of the insurance depends upon his survival of
Facts: Castro applied for insurance on the life of his driver. About 3 months
the expiration of the endowment period. Upon the insured’s death, within
later, on Oct. 16, 1959, the insured driver was allegedly shot to death by
the period, the beneficiary will take, as against the personal representatives
unknown persons. Issue: Whether or not Castro has an insurable
the endowment period, the benefits are payable to him or to his assignee,
interest in his driver. Held: NO. The requirement of insurable interest to
notwithstanding a beneficiary is designated in the policy.
support a contract of insurance is based upon consideration of public policy
which renders wager policies INVALID. To sustain a contract of this character
it must appear that there is a real concern in the life of the party whose death
would be the cause of substantial loss to those who are named as a
beneficiary. Mere relationship of uncle and nephew, employer and
employee is NOT sufficient to provide an insurable interest on the life of the
insured. It must be shown that the destruction of the life of the insured
would cause pecuniary loss to the complainant. This, Castro failed to prove.
7. SSS v. Davac - SSS Benefits Facts: Davac was an SSS member, and 2. Geagonia v CA Facts: Geagonia, owner of a store, obtained from
designated Candelaria Davac, his alleged wife, as his beneficiary. Country Bankers fire insurance policy for P100,000.00. The petitioners’
The death benefits were awarded to Candelaria Davac. Issue: Who is stocks were destroyed by fire. Held: As to a mortgaged property, the
entitled to the SSS benefits? mortgagor and the mortgagee have each an independent insurable interest
therein and both interests may be one policy,or each may take out a
Held: Candelaria. Under the SSS Act, the beneficiary as recorded by the separate policy covering his interest, either at the same or at separate
employee’s employer is the one entitled to the death benefits, hence they times.
should go to Candelaria. Lourdes contends that the designation made in the The mortgagor's insurable interest covers the full value of the mortgaged
person of Candelaria who is party in a bigamous marriage is null and void for property, even though the mortgage debt is equivalent to the full value of
being against Art. 739 of the CC. SC held that the disqualification mentioned the property. The mortgagee's insurable interest is to the extent of the
in Art. 739 is NOT applicable to Candelaria, because she was not guilty of debt, since the property is relied upon as security thereof, and in insuring
concubinage , there bieing NO proof that she had actual knowledge of the he is not insuring the property but his interest or lien thereon. His insurable
previous marriage of her husband. interest is prima facie the value mortgaged and extends only to the amount
of the debt, not exceeding the value of the mortgaged property.
8. Harvardian Colleges v. Country Bankers Insurance Corp.
Facts: The insured property was totally burned rendering it a total loss. Thus, separate insurances covering different insurable interests may be
It was contended that both the lot and the building were owned by obtained by the mortgagor and the mortgagee.
Ildefonso Yap and NOT by the Harvardian Colleges. Issue:
Whether or not Harvardian colleges has a right to the proceeds. Right to Subrogation:
Held: Harvardian has a right to the proceeds. 1. RCJ BUS LINES INC. VS. STANDARD INSURANCE
Regardless of the nature of the title of the insured or even if he did not have In the present case, it cannot be denied that the Mitsubishi Lancer sustained
title to the property insured, the contract of fire insurance should still be damages. Moreover, it cannot also be denied that Standard
upheld if his interest in or his relation to the property is such that he will be paid Rodelene Valentino P162,151.22 for the repair of the Mitsubishi Lancer
benefited in its continued existence or suffer a direct pecuniary loss from its pursuant to a Release of Claim and Subrogation Receipt. Standards right of
destruction or injury. The test in determining insurable interest in property subrogation accrues simply upon its payment of the insurance claim.
is whether one will derive pecuniary benefit or advantage from its Subrogation is the substitution of one person by another with reference
preservation, or will suffer pecuniary loss or damage from its destruction, to a lawful claim or right, so that he who substitutes another succeeds to the
termination or injury by the happening of the event insured against. rights of the other in relation to a debt or claim, including its remedies or
securities. The principle covers a situation wherein an insurer who has paid a
Here Harvardian was not only in possession of the building but was in fact loss under an insurance policy is entitled to all the rights and remedies
using the same for several years with the knowledge and consent of Ildefonso belonging to the insured against a third party with respect to any loss covered
Yap. It is reasonably fair to assume that had the building not been burned, by the policy.
Harvardian would have been allowed the continued use of the same as the
site of its operation as an educational institution. Harvardian therefore would
have been directly benefited by the preservation of the property, and 2. Federal Express Corporation vs American Home Insurance Corp
certainly suffered a pecuniary loss by its being burned. Facts: Smithklein caused the transportation of 109 cartons of veterinary
biologicals. Issue: Is there legal subrogation on the part of the Insurance
Company? Held:Yes. Upon payment, the insurer’s entitlement to
9. Ang Ka Yu v. Phoenix Assurance Facts: Phoenix denied liability on subrogation pro tanto equips the insurance company with a cause of action
the ground that Ang was not the owner but a mere possessor and as such, in case of a contractual breach or negligence. The insurance company stands
had no insurable interest over the property. Issue: Whether or not a mere in the same footing or in substitution of the insured party.
possessor has insurable interest over the property. Subrogation Upon receipt of the insurance proceeds, the consignee
(Smithkline) executed a subrogation Receipt in favor of respondents. The
Held: Yes. A person having a mere right or possession of property may latter were thus authorized “to file claims and begin suit against any such
insure it to its full value and in his own name, even when he is not carrier, vessel, person, corporation or government.” Undeniably, the
responsible for its safekeeping. The reason is that even if a person is NOT consignee had a legal right to receive the goods in the same condition it was
interested in the safety and preservation of material in his possession delivered for transport to petitioner. If that right was violated, the consignee
because they belong to 3rd parties, said person still has insurable interest, would have a cause of action against the person responsible therefor.
because he stands either to benefit from their continued existence or to be
prejudiced by their destruction. 4. DELSAN TRANSPORTATION VS. CA The payment made by the private
respondent for the insured value of the lost cargo operates as waiver of its
(private respondent) right to enforce the term of the implied warranty against
10. Traders Insurance and Surety Co. v. Golangco Caltex under the marine insurance policy. The fact of payment grants the
Facts: A decision was rendred in Civil Case No. 6306 granting Golangco the private respondent subrogatory right which enables it to exercise legal
right to collect rentals from a building in Sta. Cruz, Manila. remedies that would otherwise be available to Caltex as owner of the lost
Traders denied any liability on the ground that since Golangco was not the cargo. The right of subrogation has its roots in equity. It is designed to
owner of the premises then he had no insurable interest in the same and promote and to accomplish justice and is the mode which equity adopts to
consequently, he could not collect the insurance proceeds. Issue: Whether compel the ultimate payment of a debt by one who in justice and good
or not plaintiff can claim the insurance proceeds. Held. YES. Both at conscience ought to pay. It is not dependent upon, nor does it grow out of,
the time of the issuance of the policy and at the time of the fire, plaintiff any privity of contract or upon written assignment of claim. It accrues simply
Golangco was in legal possession of the premises, collecting rentals from its upon payment by the insurance company of the insurance claim.
occupant. It seems plain that if the premises were destroyed as they were, Consequently, the payment made by the private respondent (insurer) to
by fire, Golangco would be, as he was, directly damnified thereby; and hence Caltex (assured) operates as an equitable assignment to the former of all the
he had an insurable interest therein. remedies which the latter may have against the petitioner.

5. TIU VS. ARRISGADO The payment made by the private respondent for
PARTIES TO THE CONTRACT the insured value of the lost cargo operates as waiver of its (private
1.Filipinas Cia de Seguros v. Christern Huenfeld & Co. - Enemy respondent) right to enforce the term of the implied warranty against Caltex
Corporation Facts: Filipinas denied liability on the ground that Christern was under the marine insurance policy. However, the same cannot be validly
an enemy corporation and cannot be insured. Issue: interpreted as an automatic admission of the vessel’s seaworthiness by the
Whether or not Filipinas is liable to Christern, Huenfeld & Co. private respondent as to foreclose recourse against the petitioner for any
Held: NO. Majority of the stockholders of Christern were German liability under its contractual obligation as a common carrier. The fact of
subjects. This being so, SC ruled that said corporation became an enemy payment grants the private respondent subrogatory right which enables it to
corporation upon the war between the US and Germany. The Phil Insurance exercise legal remedies that would otherwise be available to Caltex as owner
Law in Sec. 8 provides that anyone except a public enemy may be insured. It of the lost cargo. The right of subrogation has its roots in equity. It is
stands to reason that an insurance policy ceases to be allowable as soon as designed to promote and to accomplish justice and is the mode which equity
an insured becomes a public enemy. The purpose of the war is to cripple the adopts to compel the ultimate payment of a debt by one who in justice and
power ad exhaust the resources of the enemy, and it is inconsistent that one good conscience ought to pay.9 It is not dependent upon, nor does it grow
country should destroy its enemy property and repay in insurance the value out of, any privity of contract or upon written assignment of claim. It accrues
of what has been so destroyed, or that it should in such manner increase the simply upon payment by the insurance company of the insurance claim.
resources of the enemy or render it aid. Consequently, the payment made by the private respondent (insurer) to
Caltex (assured) operates as an equitable assignment to the former of all the
remedies which the latter may have against the petitioner.