SUNLIFE ASSURANCECOMPANY OF CANADAv

s.The Hon.COURT OF APPEALS and

SpousesROLANDO andBERNARDABACANI

G.
R.No.105135

June22,1995

Fact
s:

Rober
tJohnB.Bacanipr ocuredal if
einsurancecontractforhimsel
ff rom petit
ioner
,wi
th
hi
smot her
,Bernar
dabacani,ast hesi
gnat
ed benefi
ciar
ywas hi s mother.The insured di
ed
i
napl anecr ash;
hence,
Ber nardaBacanifi
ledacl aim wit
hpet i
ti
oner,seeki
ngt hebenefi
ts
oftheinsurancepol
icytakenbyherson.

Peti
tionerconducted an investigat
ion and itsf i
ndi
ngs prompted ittor ej
ectt he claim.
Peti
tionerinf
ormed respondentBer narda,thatt heinsur
ed did notdiscl
osemat er
ialfacts
rel
evantt otheissuanceoft hepol icy
,thusr enderi
ng thecontractofinsurancev oi
dable.
Witht hequest
ionifheconsultedadoct or
,the deceased answer ed i
nt he affi
rmativ
e but
l
imited hisanswert o a part
icularconsul
tati
onf orcough and fl
ucompl i
cati
ons.Theot her
questionsconcerni
ngmedi caltestsoradvi
sesoughtby ,heansweredi nthenegat i
ve.

Peti
ti
onerdi scovered thatt wo weeks pri
orto hi
s appli
cati
on f
ori nsurance,t
he insur
ed
was exami ned andconf i
ned at t he Lung Center of t
he Phil
ippines,where he was
di
agnosed f or renalf ail
ure.During hisconf
inement,the deceased was subj ect
ed to
ur
inal
ysis,ultr
a-sonographyandhemat ol
ogytests.

I
nr uli
ng forpriv
aterespondents,the t
ri
alcourtconcluded t
hatthe f
act
s concealed by
t
hei nsur
edwer emadei ngoodf ai
thandunderabel i
eft hattheyneednotbedi sclosed.
Moreover
,i t hel
d that the health hi
stor
y ofthe insured was i
mmateri
al si
nce t he
i
nsurancepoli
cywas" non-medical"
.

Peti
ti
onerappeal
ed t
othe Cour
tofAppeal
s,whi
ch af
fi
rmed t
he deci
sion oft
he t
ri
al
cour
t.

I
ssue:

Whetherornottheconcealmentofsuchmater
ialf
act,
despi
teitnotbei
ngt
hecauseofdeat
hof
t
heinsured,
issuffi
cientt
orendert
heinsur
ancecontr
actvoi
dable
Rul
i
ng:

Yes,t
hecont r
actisvoidabl
eevenifthemat eri
alf
actconcealedisnotthecauseofdeat hofthe
i
nsured.Section 26 ofThe Insurance Code is ex
pli
citinr equi
ri
ng a par
tyt o a contr
act
ofinsurance to communicatetot he other
,in good fai
th,allfacts wi
thi
n his knowledge
which are materi
altot he cont
ractand as t o which hemakes no war rant
y,and whi ch
theotherhasnomeansofascer tai
ning.Sai
dSect i
onpr ovi
des:

A negl
ectto communi
cat
ethatwhi
ch a par
ty knows and oughtt
o communi
cat
e,i
s
cal
l
edconceal
ment.

I
nt hiscase,the informati
on whi ch t he insured f ai
led to disclose were materi
aland
rel
evantt ot he approvaland i ssuanceoft he insurance policy.The mat t
ers concealed
would hav edefini
tel
yaf f
ected petiti
oner'
sact ion on hisappl
icat i
on,eit
herbyappr oving i
t
witht hecorrespondi
ngadj ustmentf orahi gherpr emium orr ejecti
ngthesame.Mor eover
,
a disclosur
e mayhav e warrant
ed a medi calexami nati
on oft he insur
ed bypet i
ti
oneri n
orderfori ttoreasonablyassesst her i
skinv olv
edi nacceptingt heappl i
cat
ion.

Thus," good f
ait
h"is no def
ense i
n conceal
ment.The insured'
sf ai
lur
et o di
scl
ose t
he
factthathe washospital
i
zed fort
wo weeks pri
ortof i
l
ing his appli
cati
on f
orinsur
ance,
rai
ses gr av
e doubts about hisbonafi
des. I
t appear
s t hat such concealment was
deli
berateonhi spar
t.

Anentt hefinding thatthef act

sconcealed had no beari
ng t othecauseofdeat hofthe
i
nsured,i tis wellsett
led t
hatt he i
nsur
ed need notdi e oft he di
sease he had f
ail
ed t
o
discl
ose t othe i nsur
er.Iti s suff
ici
entthatthis non-discl
osure misl
ed the insur
erin
forming his esti
mat es of t he ri
sks of the proposed i nsur
ance poli
cy orin making
i
nquiries