Case Summary (G.R. No. 217426)
Factual Background
Atty. Jesus S. Sibya, Jr. applied for life insurance disclosing a 1987 lithotripsy at National Kidney Institute and authorizing Sun Life to verify his medical history. Sun Life issued the policy on February 5, 2001. Upon the insured’s death on May 11, 2001, his beneficiaries filed for the ₱1,000,000.00 death benefit. Sun Life denied the claim on August 27, 2001, alleging nondisclosure of 1994 kidney treatments and tendered premium refunds. Thereafter, Sun Life filed for rescission of the policy before the RTC.
RTC Decision
On March 16, 2009, the RTC dismissed Sun Life’s rescission complaint for lack of merit. It ruled that the insured made no material misrepresentation or concealment, given his disclosure of kidney treatment and execution of an authorization permitting further inquiry. The RTC found Sun Life liable under Sections 241 and 242 of the Insurance Code for unjustly refusing to pay the claim and awarded:
• ₱1,000,000.00 – death benefits
• ₱100,000.00 – moral damages
• ₱100,000.00 – exemplary damages
• ₱100,000.00 – attorney’s fees and costs
Court of Appeals Ruling
The CA, in its November 18, 2013 decision, affirmed the RTC’s award of benefits and damages but absolved Sun Life of violations under Sections 241 and 242. It agreed there was no fraudulent intent or concealment by the insured, noting his admission of a kidney ailment and the broad authorization given to Sun Life to obtain medical records.
Issue on Appeal
Whether the CA erred in upholding the finding that Atty. Sibya, Jr. committed no misrepresentation or concealment in his insurance application and whether Sun Life was therefore entitled to rescind the policy.
Contestability Period Analysis
Invoking Section 48 of the Insurance Code, as interpreted in Manila Bankers Life Ins. Corp. v. Aban (715 Phil. 404, 2013), the Court reiterated that an insurer’s right to rescind for fraud or nondisclosure expires two years from policy inception or upon the insured’s death within that period. Sun Life issued the policy on February 5, 2001; the insured died on May 11, 2001—well within two years—thus extinguishing any right to rescind.
Misrepresentation and Concealment Analysis
Even assuming the cont
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Citation and Procedural Posture
- Supreme Court of the Philippines, Third Division
- G.R. No. 211212, June 08, 2016
- Petition for review on certiorari under Rule 45 seeking to annul and set aside the Decision dated November 18, 2013 and Resolution dated February 13, 2014 of the Court of Appeals in CA-G.R. CV No. 93269
- Both CA rulings affirmed the Regional Trial Court of Makati City, Branch 136’s March 16, 2009 Decision in Civil Case No. 01-1506, with modification as to statutory violations
Parties
- Petitioner: Sun Life of Canada (Philippines), Inc.
- Respondents:
- Ma. Daisy S. Sibya
- Jesus Manuel S. Sibya III
- Jaime Luis S. Sibya
- Estate of the Deceased Atty. Jesus S. Sibya, Jr.
Statement of Facts
- January 10, 2001: Atty. Jesus Sibya, Jr. applied for life insurance with Sun Life, disclosing past kidney lithotripsy in 1987 and asserting “no recurrence.”
- February 5, 2001: Sun Life issued Policy No. 031097335, providing P1,000,000 death benefit if death occurred before February 5, 2021.
- May 11, 2001: Insured died of a gunshot wound in Iloilo.
- August 27, 2001: Sun Life denied the claim for alleged non-disclosure of medical history and refunded premiums.
- September 17, 2001: Respondents reiterated their claim; Sun Life instead filed a Complaint for Rescission before the RTC.
- Sun Life alleged material concealment of 1994 kidney treatments at the National Kidney Transplant Institute, arguing rescission was warranted.
- Respondents contended there was no misrepresentation, that the insured had authorized full medical inquiry, and that Sun Life’s action was a pretext to evade liability.
RTC Decision
- Date: March 16, 2009
- Dismissed Sun Life’s Complaint for Rescission for lack of merit.
- Held Sun Life violated Sections 241 (unfair claim set