ENRIQUEZ VS.

SUN LIFE INSURANCE OF CANADA

G.R. No. L-15895; November 29, 1920

FACTS:

This is an action made by the administrator of the estate of Joaquin Herrer of P6,000.00 paid by the
deceased for a life annuity on the ground that the contract for a life annuity had not been perfected.

Joaquin Herrer made an application with Sun Life for a life annuity. He paid the amount of P6,000.00 to
the Manila manager who gave him a "provisional" receipt "subject to medical examination and approval
of the Company's Central Office." The application was forwarded to the head office in Canada and the
policy was issued on December 4, 1917 in Canada. Meanwhile, on December 18, 1917, Herrer's attorney
wrote to the Manila Office stating that Herrer wanted to withdraw his application to which the office
wrote a letter dated November 26, 1917 stating that the policy had already been issued. The letter was
received by the attorney on December 21, 1917. Herrer had died a day earlier on December 20, 1920.

The trial court ruled that the contract had been perfected, hence this appeal.

ISSUES:

1. Whether or not the policyholder had received notice of the acceptance of his policy;
2. Whether or not the contract of life annuity was perfected.

HELD:

1. NO. The facts clearly show that Herrer was not informed of the acceptance of the policy before his
death.

2. NO. The contract was not perfected. Art. 1262 provides that acceptance by letter does not bind the
person making the offer except from the time it came to his knowledge. The pertinent fact is that
according to the provisional receipt, the insurance company had to: 1) conduct a medical examination;
2) had to obtain the head office's approval; and 3) somehow communicate such approval. It is true that
the letter notifying acceptance was deposited in the post office, but the fact of notification is a
rebuttable presumption and the facts clearly show that Herrer never received the notice of the
acceptance before his death.
Great Pacific v CA

G.R. No. L-31845 April 30, 1979

Facts:

Ngo Hing filed an application with the Great Pacific for a twenty-year endowment policy in the amount
of P50,000.00 on the life of his one-year old daughter Helen. He supplied the essential data which
petitioner Mondragon, the Branch Manager, wrote on the form. The latter paid the annual premium the
sum of P1,077.75 going over to the Company, but he retained the amount of P1,317.00 as his
commission for being a duly authorized agent of Pacific Life.

Upon the payment of the insurance premium, the binding deposit receipt was issued Ngo Hing. Likewise,
petitioner Mondragon handwrote at the bottom of the back page of the application form his strong
recommendation for the approval of the insurance application. Then Mondragon received a letter from
Pacific Life disapproving the insurance application. The letter stated that the said life insurance
application for 20-year endowment plan is not available for minors below seven years old, but Pacific
Life can consider the same under the Juvenile Triple Action Plan, and advised that if the offer is
acceptable, the Juvenile Non-Medical Declaration be sent to the company.

The non-acceptance of the insurance plan by Pacific Life was allegedly not communicated by petitioner
Mondragon to private respondent Ngo Hing. Instead, on May 6, 1957, Mondragon wrote back Pacific
Life again strongly recommending the approval of the 20-year endowment insurance plan to children,
pointing out that since the customers were asking for such coverage.

Helen Go died of influenza. Ngo Hing sought the payment of the proceeds of the insurance, but having
failed in his effort, he filed the action for the recovery before the Court of First Instance of Cebu, which
ruled against him.

Issues:

1. Whether the binding deposit receipt constituted a temporary contract of the life insurance in
question

2. Whether Ngo Hing concealed the state of health and physical condition of Helen Go, which rendered
void the policy

Held: No. Yes. Petition dismissed.

Ratio:

1. The receipt was intended to be merely a provisional insurance contract. Its perfection was
subject to compliance of the following conditions: (1) that the company shall be satisfied that
the applicant was insurable on standard rates; (2) that if the company does not accept the
application and offers to issue a policy for a different plan, the insurance contract shall not be
binding until the applicant accepts the policy offered; otherwise, the deposit shall be refunded;
 and (3) that if the company disapproves the application, the insurance applied for shall not be in
force at any time, and the premium paid shall be returned to the applicant.

The receipt is merely an acknowledgment that the latter's branch office had received from the
applicant the insurance premium and had accepted the application subject for processing by the
insurance company. There was still approval or rejection the same on the basis of whether or
not the applicant is "insurable on standard rates." Since Pacific Life disapproved the insurance
application of respondent Ngo Hing, the binding deposit receipt in question had never become
in force at any time. The binding deposit receipt is conditional and does not insure outright. This
was held in Lim v Sun.

The deposit paid by private respondent shall have to be refunded by Pacific Life.

2. Ngo Hing had deliberately concealed the state of health of his daughter Helen Go. When he
supplied data, he was fully aware that his one-year old daughter is typically a mongoloid child.
He withheld the fact material to the risk insured.

“The contract of insurance is one of perfect good faith uberrima fides meaning good faith,
absolute and perfect candor or openness and honesty; the absence of any concealment or
demotion, however slight.”

The concealment entitles the insurer to rescind the contract of insurance.