VDA DE SINDAYEN VS INSULAR

Sept 4, 1935 | J. Butte

Arturo Sindayen
linotype operator at Bureau of Printing in Manila
had xmas vacation in Tarlac with his aunt, Felicidad Estrada
while he was there, he made an application to defendant Insular
Life Assurance Co. through agent Mendoza for life insurance
policy P1K
paid P15 as part of first premium
it was agreed that the policy, if issued, should be delivered to his
aunt F. Estrada because he left P25.06 with her to complete the
payment of P40.06 first annual premium
Jan 1, 1933 Sindayen (29) examined by company doctor he passed
Jan 2 Sindayen returned to work
Jan 11 company issued policy dated back to Dec 1, 1932, mailed it to
Mendoza for delivery to insured
Jan 12 Sindayen complained of severe headache and remained at
home
Jan 15 he called a physician who diagnosed him with acute nephritis
and uremia
Jan 19 he died
Jan 16 Mendoza received the policy in Tarlac
Jan 18 he delivered the policy to F. Estrada per agreement
agent asked if Sindayen was in good health and F. Estrada said
she thought so
Jan 20 agent learned of Sindayens death and asked F. Estrada to
return the policy
Feb 4 company obtained from widow of A. Sindayen her signature to
a legal document entitled ACCORD, SATISFACTION AND RELEASE
in consideration of P40.06 paid to her by company, she assigns,
releases and forever discharges Insular Life Assurance Co. of all
claims, obli or indebtedness they may have because of the policy
court noted that the acknowledgment was fraudulent as per the
notary
check was never cashed but returned to company
The action was brought to enforce payment of the policy.
Terms of policy: annual premium of P40.06 due on Dec 1 every year,
covering period of Dec 1, 1932 to Dec 1, 1933
note that company assumed no actual risk prior to Jan 11, 1933

contested provision: 3. That said policy shall not take effect until
the first premium has been paid and the policy has been
delivered to and accepted by me, while I am in good health

R ARG: said policy never took effect because of par. 3 of the

application
at the time of delivery by the agent, the insured was not in good
health
Prevailing view in American decisions: the act of delivery of the policy
in the absence of fraud or other ground for rescission consummates
insurance
Mas gusto ni SC ang holding na: Mendoza was authorized by the
company to make the delivery of the policy when he received the
payment of the first premium and he was satisfied that the insured was
in good health.
McLaurin vs Mutual Life Insurance - power in the local agent to
withhold the policy involves the power to deliver it
This is not a case of waiver or of estoppel, but a case where the local
agents, in the exercise of the powers lodged in them, accepted the
premium and delivered the policy. That act binds their principal, the
defendant.
Mendoza duly licensed by Insurance Commissioner to act as agent of
defendant insurance company
not regarded as a machine by the company for the performance
of delivery
if that was the case, then the legally effective delivery of the
policy and the consummation occurred when the company
expressed its will to release the policy by mailing it to its agent
on Jan 11
o so ministerial na ang act, no more decision
o could do nothing but unconditional delivery
o legal result is the same since Jan 11, insured was in good
health performing his regular duties in Bureau of Printing
Court disinclined to take such a view of the agents authority
evidence on record shows that Mendoza had the authority to
withhold the delivery of the policy to the insured until the first
premium had been paid and the policy had been delivered to and
accepted by the insured while he was in good health
w/ that condition has been met calls for exercise of discretion

Mendozas decision that the condition was met and it was proper
to make delivery is just as binding on the company as if the
decision had been made by its board of directors
Yes, Mendoza made a mistake of judgment, but its not charged
that the mistake was induced by any misconduct or omission of
duty of insured

It is therefore in the public interest, for the public is profoundly and

generally interested in life insurance, as well as in the interest of the
insurance companies themselves by giving certainty and security to
their policies, that we are constrained to hold, as we do, that the
delivery of the policy to the insured by an agent of the company who is
authorized to make delivery or withhold delivery is the final act which
binds the company (and the insured as well) in the absence of fraud or
other legal ground for rescission.
HOLDING: that defendant company assumed the risk covered by the
policy on the life of A. Sindayen on Jan 18, 1933, the date when the
policy was delivered to the insured.