G.R. No. L-31845 - Great Pacific Life Assurance Co. vs. Court of Appeals

Two petitions for certiorari by way of appeal (G.R. Nos. L-31845 and L-31878) were consolidated on April 29, 1970, challenging the amended decision of the Court of Appeals which affirmed in toto the Court of First Instance of Cebu’s ruling ordering petitioners Great Pacific Life Assurance Company and Lapulapu D. Mondragon to pay private respondent Ngo Hing the sum of ₱50,000 with interest at 6% from the date of complaint, plus ₱10,000 attorney’s fees and costs.
In its original decision, the Court of Appeals had set aside the CFI ruling, absolved petitioners of liability, and ordered reimbursement of ₱1,077.75 to respondent without interest.

On March 14, 1957, Ngo Hing applied for a twenty-year endowment policy of ₱50,000 on his one-year-old daughter, Helen Go. Agent Mondragon filled out and typed the application (Exhibit I-M), which Ngo Hing signed. Ngo Hing paid ₱1,077.75 as premium (deposit to the Company) and retained ₱1,317 as his commission. A binding deposit receipt (Exhibit E) was issued.
On April 30, 1957, Pacific Life issued a letter (Exhibit 3-M) disapproving the application—its twenty-year endowment plan was unavailable to minors under seven—and offered instead the Juvenile Triple Action Plan. Mondragon’s May 6, 1957 letter (Exhibit 4-M) reiterated the recommendation for approval of the original plan. Ngo Hing was allegedly not informed of the rejection. Helen Go died on May 28, 1957, of influenza complicated by bronchopneumonia. Upon claim denial, Ngo Hing sued for policy proceeds.

Exhibit E provided that the deposit created only a provisional insurance contract, effective upon (a) company’s satisfaction of insurability at standard rates, (b) applicant’s acceptance of any alternative policy offered, and (c) full compliance with other conditions precedent.
Since Pacific Life disapproved the original application and offered a different plan which Ngo Hing did not accept, the conditions precedent were not met, and no binding contract ever arose.

Whether the binding deposit receipt (Exhibit E) constituted a temporary contract of insurance.
Whether private respondent Ngo Hing concealed material facts regarding the insured child’s health and physical condition, rendering Exhibit E void.