The Supreme Court ruled that for concealment to exist, the insured must have knowledge of a material fact and intentionally withheld it. In this case, the insured stated he had a tumor removed, but did not have sufficient medical knowledge to distinguish between a peptic ulcer and tumor. Therefore, his statement was made in good faith. Additionally, the insurer approved the policy without further inquiry, so any imperfect answers were waived. The court found no concealment or deception by the insured, so it ruled for the widow beneficiary.
The Supreme Court ruled that for concealment to exist, the insured must have knowledge of a material fact and intentionally withheld it. In this case, the insured stated he had a tumor removed, but did not have sufficient medical knowledge to distinguish between a peptic ulcer and tumor. Therefore, his statement was made in good faith. Additionally, the insurer approved the policy without further inquiry, so any imperfect answers were waived. The court found no concealment or deception by the insured, so it ruled for the widow beneficiary.
The Supreme Court ruled that for concealment to exist, the insured must have knowledge of a material fact and intentionally withheld it. In this case, the insured stated he had a tumor removed, but did not have sufficient medical knowledge to distinguish between a peptic ulcer and tumor. Therefore, his statement was made in good faith. Additionally, the insurer approved the policy without further inquiry, so any imperfect answers were waived. The court found no concealment or deception by the insured, so it ruled for the widow beneficiary.
[29] NG GAN ZEE v ASIAN CRUSADER LIFE such facts where they are distinctly implied in other facts
here they are distinctly implied in other facts of which information
G.R. No. L-30685 | May 30, 1983 is communicated.
TOPIC: Determination of Materiality
FACTS SUMMARY: Kwong Nam applied for a 20-year endowment insurance on his On May 12, 1962, Kwong Nam applied for a 20-year endowment life for Php 20,000, with his wife Ng Gan Zee as beneficiary. This was insurance on his life for the sum of P20,000.00, with his wife Ng approved by the respondent. When Kwong Nam died of cancer of the liver Gan Zee as beneficiary. with metastasis, the widow presented a claim for the insurance. However, it On the same date, respondent, upon receipt of the required was denied by the respondent alleging that there was misrepresentation on premium from the insured, approved the application and issued the part of the insured regarding the answers and statement on the the corresponding policy. application. On December 6, 1963, Kwong Nam died of cancer of the liver with metastasis. The Supreme Court ruled for concealment to exist, there must be knowledge o All premiums had been religiously paid at the time of his of a fact material to the risk, and honesty, good faith, and fair dealing requires death. that this should be communicated to the insurer but the insured intentionally On January 10, 1964, his widow Ng Gan Zee presented a claim in withholds the information. It must not only be material, but also fraudulent. In due form to respondent for payment of the face value of the policy. this case, since the insured has no sufficient medical to distinguish between o On the same date, she submitted the required proof of "peptic ulcer" and "a tumor", his statement should be construed as an death of the insured. expression made in good faith of his belief as to the nature of his ailment and o Respondent denied the claim on the ground that the operation. answers given by the insured to the questions appealing in his application for life insurance were DOCTRINE untrue. Concealment exists where the assured had knowledge of a fact Appellee brought the matter to the attention of the Insurance material to the risk, and honesty, good faith, and fair dealing Commissioner (Hon. Francisco Mandamos) requires that he should communicate it to the assurer, but he o After conducting an investigation, Insurance Commissioner designedly and intentionally withholds the same. wrote the respondent that he had found no material The concealment must, in the absence of inquiries, be not only concealment on the part of the insure. material, but fraudulent, or the fact must have been intentionally o Thus, petitioner should be paid the full face value of the withheld policy. Where, upon the face of the application, a question appears to Despite this, respondent still refused to settle the obligation be not answered at all or to be imperfectly answered, and the Respondent alleged that the insured was guilty of insurers issue a policy without any further inquiry, they waive misrepresentation when he answered "No" to the following the imperfection of the answer. question appearing in the application for life insurance o Has any life insurance company ever refused your application for insurance or for reinstatement of a lapsed PROVISIONS policy or offered you a policy different from that applied for? Sec 27 Insurance Law Act 2427: Such party to a contract of insurance must If, so, name company and date. communicate to the other, in good faith, all facts within his knowledge which According to respondent, the insured had in January, 1962, applied are material to the contract, and which the other has not the means of for reinstatement of his lapsed life insurance policy with the Insular ascertaining, and as to which he makes no warranty." Life Insurance Co., Ltd, but this was declined by the insurance company, although later on approved for reinstatement. Sec 32 Insurance Law: The right to information of material facts may be o Notwithstanding, this the said insured answered 'No.' waived either by the terms of insurance or by neglect to make inquiries as to Respondent further maintains that when the insured was examined o Such statement must be presumed to have been made in connection with his application for life insurance, he gave the by him without knowledge of its incorrectness and respondent's medical examiner false and misleading information. without any deliberate intent on his part to mislead the o Undisputed medical data showed insured was operated for respondent. peptic ulcer, involving the excision of a portion of the While it may be conceded that, from the viewpoint of a medical stomach expert, the information communicated was imperfect, the same was o Appellant argues that the insured’s statement in application nevertheless sufficient to have induced respondent to make further that “a tumor, hard and of a hen’s egg size, was removed inquiries about the ailment and operation of the insured. during the operation”, constituted material It has been held that where, upon the face of the application, a concealment question appears to be not answered at all or to be imperfectly RTC: dismissed case for being bereft of factual basis answered, and the insurers issue a policy without any further CA referred to SC on question of law. inquiry, they waive the imperfection of the answer. As noted by the lower court, if the ailment and operation of Kwong Nam had such an important bearing on the question of whether the ISSUE defendant would undertake the insurance or not, the court cannot W/N appellant, because of insured’s aforesaid representation, misled or understand why the defendant did not make any further deceived into entering the contract. – NO inquiries on such matters. o The defendant was too eager to accept the application and RATIO receive the insured's premium. It would be inequitable now Agreed with lower court’s decision to allow the defendant to avoid liability under the Concealment exists where the assured had knowledge of a fact circumstances. material to the risk, and honesty, good faith, and fair dealing requires that he should communicate it to the assurer, but he RULING designedly and intentionally withholds the same. Finding no reversible error committed by the trial court, the judgment appealed The concealment must, in the absence of inquiries, be not only from is hereby affirmed, with costs against appellant Asian-Crusader Life material, but fraudulent, or the fact must have been intentionally Assurance Corporation. withheld The evidence shows that the Insular Life Assurance Co., Ltd. approved Kwong Nam's request for reinstatement and amendment of his lapsed insurance policy on April 24, 1962. o It results, therefore, that when on May 12, 1962 Kwong Nam answered 'No' to the question whether any life insurance company ever refused his application for reinstatement of a lapsed policy he did not misrepresent any fact. Kwong Nam had informed the respondent's medical examiner that the tumor for which he was operated on was "associated with ulcer of the stomach." o In the absence of evidence that the insured had sufficient medical knowledge as to enable him to distinguish between "peptic ulcer" and "a tumor", his statement that said tumor was "associated with ulcer of the stomach," should be construed as an expression made in good faith of his belief as to the nature of his ailment and operation.