G.R. No. 204736 - Manulife Philippines, Inc. vs. Ybanez

Manulife Philippines, Inc. initiated a complaint for rescission of two life insurance contracts (Policy Nos. 6066517-1 and 6300532-6) issued on October 25, 2002 and July 25, 2003, respectively.
The complaint was filed against Hermenegilda Ybaäez, the designated beneficiary and later claimant, and against the BPI Family Savings Bank, which was involved as the assignee of one policy.
The subject insurance policies were purportedly void due to alleged concealment or misrepresentation of material facts by the insured, Dr. Gumersindo Solidum Ybaäez, in his insurance applications.

Manulife alleged that the insured misrepresented or concealed material facts in connection with the insurance application forms, namely the Non-Medical Evidence (NME), Medical Evidence Exam (MEE), and the Declaration of Insurability (DOI).
Specific allegations included:

Failure to disclose previous hospital confinements—including a total parotidectomy due to a tumor, an episode of acute pancreatitis, and a diagnosis of leptospirosis.
Concealment of a history of hypertension and a shrunken kidney condition.
The insured’s status as “below average” in health as noted by the insured’s examinations.

Based on the investigation into these issues (which involved credentials from various annexed documents and medical records), Manulife concluded that material facts were deliberately or negligently concealed, justifying the rescission of the policies and the denial of the death claims.

Dr. Ybaäez died on November 17, 2003, within a short period after the policies were in force (one policy for only one year and three months, the other for four months).
Hermenegilda, then the widow of the insured and the designated beneficiary on the policies, filed a death claim on December 10, 2003.
Manulife, relying on its investigation and the alleged evidence of concealment, denied the death claims and refunded the premiums paid.

The Regional Trial Court (RTC) of Makati City received the complaint and conducted a pre-trial, during which evidence, including documentary exhibits (NME, MEE, DOI, medical records, death certificate, and assignment documents), was offered.
Manulife presented its sole witness, Ms. Jessiebelle Victoriano, who identified the documentary exhibits but did not provide direct or firsthand testimony about the circumstances or authenticity of the alleged concealments.
Hermenegilda countered with her own evidence and testimony (including that of her counsel, Atty. Edgardo Mayol) to refute each ground of denial raised by Manulife.
The RTC, based on the evidence presented and on the inadequacy of Manulife’s supporting evidence—particularly the hearsay nature of the purported medical records—dismissed the complaint for rescission.
In rendering its decision, the RTC ordered Manulife to pay Hermenegilda actual expenses and attorney’s fees while denying her claim for moral and exemplary damages.

On appeal, the Court of Appeals (CA) adopted the findings of fact and conclusions of law set forth by the RTC.
The CA reiterated that misrepresentation or concealment constitutes an affirmative defense for the insurer, one which must be established by convincing evidence—a burden that Manulife failed to discharge.
The CA emphasized the inadmissibility and lack of probative value of the allegedly supportive evidence (e.g., the CDH medical records) due to the absence of proper authentication and live testimony.

Manulife eventually sought review by filing a Petition for Review on Certiorari before the Supreme Court, challenging the CA’s affirmation of the RTC’s decision.
The central claim of the petition was that the trial and appellate courts erred in affirming the dismissal of Manulife’s complaint because they failed to hold that there was sufficient evidence of concealment on the part of the insured.

Whether the Court of Appeals committed any reversible error in affirming the RTC’s dismissal of Manulife’s complaint for rescission of the insurance contracts.

The issue centers on whether there was sufficient evidence to establish that the insured concealed or misrepresented material facts necessary to justify rescission.
A related issue is whether the CA improperly evaluated or disregarded evidence that could have supported Manulife’s claims, specifically concerning the role of hearsay and the lack of live testimony regarding the alleged concealments.