INSURANCE LAW

MELISSA M. MARTIN
Reporter
Title of the Case:

IGNACIO SATURNINO, in his own behalf and as JUDICIAL GURDIAN OF

CARLOS SATURNINO, minor V.
THE PHILIPPINE AMERICAN LIFE INSRURANCE COMPANY
G.R. No. 7 SCRA 316, 319
February 28, 1963
People Behind this Case:

 Estefania A. Saturnino – Life Insurance Policy holder.

 Ignacio Saturnino – plaintiffs-appellant, husband of Estefania, the claimant of
the Life Insurance Policy
 Philippine American Life Insurance Company - defendant
 Edward A. Santos – appellee’s agent
FACTS:
 Plaintiffs, now appellants, filed this action in the Court of First Instance of
Manila to recover the sum of P5,000.00 corresponding to the face value of an
insurance policy issued by defendant on the life of Estefania A. Saturnino and
a sum of P1,500.00 as attorney’s fees.
 Contracted a 20 year endowment non-medical life insurance with the
appellee.
 This kind of policy dispenses with the medical examination of the applicant
usually required in ordinary policies.
 Detailed information is called for in the application concerning the health of
and medical history.
 The written application was submitted by Saturnino to the appellee on
November 16, 1957 through the appellee’s agent Edward A. Santos.
 The policy was issued on the same day upon payment of the first year’s
premium of P339.25.
FACTS:
 On September 9, 1957, 2 months prior to the issuance of the policy, Saturnino
was operated on for cancer, involving complete removal of the right breast,
including the pectoral muscles and the glands found in the right armpit.
 Estefania Saturnino did not make a disclosure thereof in her application for
insurance.
 On the contrary, she stated therein that she did not have, nor had she ever
had, among other ailments listed in the application, cancer or other tumors.
 On Septmeber 19, 1958 Saturnino died of pneumonia, secondary to influenza.
ISSUE:
 Whether or not Saturnino is entitled to the
insurance claim.
RULING:
 No. Saturniono is not entitled to the insurance claim.
 Under the law, each party to a contract of insurance is bound to
communicate to the other, in good faith, all facts within his knowledge which
are material to the contract, and to which he makes no warranty, and which
the other has not the means of ascertaining.
 In the instant case, there can be no dispute that the information given by her
in her application was false, namely, that she had never cancer or tumors or
undergone any operation in the preceding five years. It is evident that she is
guilty of concealment.
 As to appellant’s contention that since the contract was a non-medical
insurance, concealment of her previous health conditions were immaterial
and has no merit. The waiver of medical examination renders even more
material in the information required of the applicant concerning previous
condition of health and diseases suffered.
RULING:
 Such information necessarily constitutes an important factor which the insurer
takes into consideration in deciding whether to issue the policy or not.
 It is also logical to assume that if the appellee had been properly apprised of the
insured’s medical history, she would have at least been made to undergo medical
examination in order to determine her insurability.
 Lastly, it is argued that if ever there was concealment on the part of Saturnino,
the same was not fraudulent for she was devoid of knowledge that she was
operated for cancer.
 In this jurisdiction, a concealment, whether intentional or unintentional, entitles
the insurer to rescind the contract of insurance.
 Concealment being defined as “negligence to communicate that which a party
knows and ought to communicate” (Sections 24 & 26, Act No.2427).
 The judgment appealed from, dismissing the complaint and awarding the return
to appellants of the premium already paid, with an interest of 6% up to January
29, 1959, AFFIRMED, with costs against appellants.