G.R. No. L-34200 - Edillon vs. Manila Bankers Life Insurance Corp.

Petitioners-Appellants: Regina L. Edillon, assisted by her husband Marcial Edillon.
Respondents-Appellees: Manila Bankers Life Insurance Corporation and the Court of First Instance of Rizal, Branch V, Quezon City.

In April 1969, Carmen O. Lapuz applied for accident and injury insurance coverage with the respondent insurance corporation.
She filled out the printed application form which required basic personal information, including her date of birth (July 11, 1904), thereby indicating that she was nearly 65 years old at the time of application.
On the same day (April 15, 1969), Carmen O. Lapuz paid a premium of ₱20.00 and received a receipt signed by an authorized agent.
The insurance company subsequently issued Certificate of Insurance No. 128866, which stipulated a 90-day period of coverage.

On May 31, 1969—within the policy’s effectivity period—Carmen O. Lapuz was involved in a vehicular accident on North Diversion Road, which resulted in her death.
The insured’s advanced age was clearly indicated on the application form despite its materiality to the policy’s applicability under its terms.

On June 7, 1969, Regina L. Edillon, the beneficiary named in the policy and sister of the insured, filed a claim for the insurance proceeds.
All necessary documents and requisites were submitted to the insurance corporation.
The respondent insurance corporation, however, denied the claim on the ground that the policy contained an exclusionary condition disqualifying coverage for persons over 60 years of age.

The trial court (Court of First Instance of Rizal, Branch V, Quezon City) ruled in favor of the insurance corporation.
It dismissed the complaint and ordered Regina L. Edillon to pay attorney’s fees of ₱1,000.00 in favor of the respondent, while also directing the insurance corporation to refund the ₱20.00 premium.
The trial court’s reasoning was that the insurance contract is one of adhesion, and the insured, knowing the terms, should have sought a premium refund once she realized that the stipulated conditions (pertaining to age) made her ineligible.

Whether the acceptance of the premium and issuance of the Certificate of Insurance by the respondent constituted a waiver or estoppel effect over the exclusionary condition (regarding the age limit) expressly contained in the policy.

Was the insurance corporation justified in denying the claim based solely on Carmen O. Lapuz’s age which exceeded the prescribed limit?
Did the silence or inaction of the insurance company—despite clear indication of her age on the application form—amount to a waiver of the condition excluding coverage for persons over 60 years?

Whether the insurer’s failure to exercise its right to cancel the policy or notify the insured of the disqualifying condition prior to the occurrence of the insured event (vehicular accident) indicates an implied acceptance of the risk.

The applicability of established case precedents (such as Que Chee Gan vs. Law Union Rock Insurance Co., Ltd. and Capital Insurance & Surety Co., Inc. vs. Plastic Era Co., Inc.) in interpreting waiver by estoppel in insurance contracts, especially regarding deviations from policy conditions.