Case Digest (G.R. No. 92492)
Facts:
Thelma Vda. de Canilang v. Hon. Court of Appeals and Great Pacific Life Assurance Corporation, G.R. No. 92492, June 17, 1993, Supreme Court Third Division, Feliciano, J., writing for the Court.
Petitioner Thelma Vda. de Canilang was the named beneficiary and widow of Jaime Canilang, who applied on 4 August 1982 for a non‑medical life insurance policy with respondent Great Pacific Life Assurance Company and was issued Policy No. 345163 effective 9 August 1982 with a face amount of P19,700. Prior to the application, Jaime Canilang consulted Dr. Wilfredo B. Claudio on 18 June 1982 (diagnosed with “sinus tachycardia”) and again on 3 August 1982 (diagnosed with “acute bronchitis”); prescribed medications included Trazepam and Aptin. Jaime Canilang died on 5 August 1983 of congestive heart failure and related conditions.
Great Pacific denied the beneficiary’s claim on 5 December 1983 on the ground of concealment of material health information. Petitioner filed a complaint with the Insurance Commission seeking recovery of the proceeds. After hearings (including petitioner’s testimony and the deposition of Dr. Claudio, and testimony by Great Pacific’s medical underwriter, Dr. Esperanza Quismorio), Insurance Commissioner Armando Ansaldo on 5 November 1985 ordered Great Pacific to pay P19,700 plus legal interest and P2,000 attorney’s fees, finding: (1) the insured’s ailment was not so serious that disclosure would assuredly have defeated issuance; (2) Great Pacific waived inquiry by issuing the policy despite omissions; (3) concealment was not intentional because the insured believed he had a minor ailment; and (4) B.P. Blg. 874 (which restored language that concealment, whether intentional or unintentional, entitles rescission) was not applicable as it took effect only on 1 June 1985.
On appeal, the Court of Appeals (decision dated 16 October 1989 in C.A.-G.R. SP No. 08696) reversed and set aside the Insurance Commissioner’s decision, dismissed petitioner’s complaint, and denied Great Pacific’s counterclaim. The Court of Appeals held that the dispositive issue before the Insurance Commissioner was whether Jaime Canilang committed material concealment (not whether such concealment was intentional), that his failure to disclose prior medical consultations and treatment was material and should have been communicated to the insurer, and that the Ng Gan Zee case (addressing misrepresentation) was inapplicable to concealment.
Petitioner sought review in the Supreme Court by a Petition for Review on Certiorari, arguing (1) that the agreed issue before the Insurance Commissioner involved intentional concealment and (2) that nondisclosure did not amount to fraud and that respondent insurer had waived inquiry. The Supreme Court considered the medical declaration (which contained negative statements about prior hospitalization and consultation and an “Exceptions” space left blank), relevan...(Pro-only)
Issues:
- Did the parties, in the pretrial before the Insurance Commission, agree that the controlling issue was whether Jaime Canilang "intentionally" made a material concealment?
- Did Jaime Canilang’s failure to disclose his prior medical consultations and diagnosis constitute a material concealment that justified rescission and denial of the claim?
- Does Section 27 of the Insurance Code (as it then read) require that concealment be intenti...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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