Enriquez vs. Sun Life Assurance Co.

of Canada
No. 15895; November 29, 1920

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, as the locus paenitentiae
is ended when the acceptance has passed beyond the control of the party.

Facts:
This is an appeal from a judgment of the Court of First Instance of Manila

On September 24, 1917, Joaquin Herrer applied for a life annuity under the Sun Life Assurance Company
of Canada through its office in Manila. After two days, he paid Php 6,000 to the Manila Office’s manager and
was given a provisional receipt. Said life annuity application was then forwarded to the company’s head office
in Canada.

On November 26, 1917, the head office gave its notice of acceptance by cable to Manila, and the Manila
office prepared a letter notifying Mr. Herrer that his application had been accepted and that this was placed in
the ordinary channels for transmission. However, it was not known whether the notification was actually mailed
and was received by the applicant.

Subsequently, on December 18, 1917, Atty. Aurelio Torres informed Sun Life’s Manila office that Herrer
wanted to withdraw his application. The following day, the local office in Manila responded to Atty. Torres,
stating that the policy had already been issued and called attention to the notification sent last November 26.
This letter of response from Sun Life was received by Atty. Torres on December 21, 1917. Mr. Herrer died on
December 20, 1917.

Rafael Enriquez, the administrator of Joaquin Herrer’s estate, filed to recover the amount of Php 6,000
paid by the late Mr. Herrer for the life annuity from Sun Life Assurance Co. through its office in Manila.

CFI/RTC – Decided in favor of Sun Life Assurance Co.

Issue: WON Mr. Herrer received notice of acceptance of his application, thereby perfecting his life annuity
contract.

Held : No. The life annuity contract was not perfected because it had not been satisfactorily proved that the
acceptance of the application came to the knowledge of the applicant. The law applicable to the case is found
in Art. 1262 par. 2, which provides that “an acceptance made by letter shall not bind the person making the
offer except from the time it came to his knowledge.”

According to the provisional receipt issued to Mr. Herrer, three things had to be accomplished by Sun
life to constitute the contract: 1) There had to be a medical examination of the applicant; 2) there had to be an
approval of the application by the head office of Sun Life (in Canada); and 3) the approval had to be
communicated in some way by the company to the applicant. However, the requirement that a letter of
notification be accepted by the applicant was not complied with as can be referred to from the facts above.

Judgement of the CFI is reversed, and Enriquez, as administrator of Mr. Herrer’s estate, shall recover from
Sun Life Php 6,000 with legal interest from November 20, 1918 until paid.