G.R. No. L-32613-4 - People vs. Ferrer

On October 23, 1997, Manuel Florendo submitted an application to Philam Plans, Inc. after persuasion by sales counselor Perla Abcede for a “Comprehensive Pension Plan” (Plan PP43005584).
The plan featured a preneed price of ₱997,050.00 payable over ten years and a maturity value of ₱2,890,000.00 after twenty years; it included a group life insurance component under a master policy issued by Philam Life.

Manuel signed the application but left medical-history questions blank, delegating completion to Perla Abcede; Ma. Celeste Abcede signed as sales counselor.
The application contained declarations that the applicant had “never been treated for heart condition, … diabetes, … in the last five years” and was in “good health,” with spaces provided for detailing any contrary facts.

Philam Plans issued the Pension Plan Agreement on October 30, 1997, naming Manuel’s wife, Lourdes, as beneficiary; Manuel paid quarterly premiums until his death.
Manuel died of blood poisoning on September 15, 1998, within eleven months of issuance. Lourdes filed a claim, which Philam Plans forwarded to Philam Life. On May 3, 1999, the claim was denied due to nondisclosure of heart disease (including an implanted pacemaker) and diabetes.
Lourdes sued before the RTC, which on March 30, 2006, ruled Manuel did not conceal his conditions and ordered Philam Plans and the Abcedes to pay plan benefits (₱997,050.00 plus maturity value of ₱2,890,000.00), moral damages, and costs.
On December 18, 2007, the CA reversed, finding (1) Manuel breached the duty of utmost good faith by concealing material health facts, (2) Manuel was bound by information provided under his direction, and (3) acceptance of premiums did not bar rescission within the one-year incontestability period.

Whether Manuel concealed material facts regarding his health in his pension plan application, justifying rescission.
Whether Manuel is bound by the omissions of his soliciting agent, Perla Abcede, in the application form.
Whether the one-year incontestability clause in the pension plan precludes Philam Plans from denying Lourdes’s claim when death occurred within eleven months of issuance.