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Vda Canilang v. CAG.R. No. 92492 June 17, 1993

Facts:

Canilang was found to have suffered from sinus tachycardia then bronchitis after a check-upfrom his doctor. The next day, he applied for a "non-medical" insurance policy withrespondent Grepalife naming his wife, Thelma Canilang, as his beneficiary. This was to the

value of !,#$$.

%e died of "congestive heart failure," "anemia," and "chronic anemia." The widow filed aclaim with Great acific which the insurer denied on the ground that the insured hadconcealed material information from it.

etitioner then filed a complaint against Great acific for recovery of the insurance proceeds.etitioner testified that she was not aware of any serious illness suffered by her late husbandand her husband had died because of a kidney disorder. The doctor who gave the check up

stated that he treated the deceased for &sinus tachycardia' and "acute bronchitis."

Great acific presented a physician who testified that the deceased(s insurance application hadbeen approved on the basis of his medical declaration. )he explained that as a rule, medicalexaminations are re*uired only in cases where the applicant has indicated in his applicationfor insurance coverage that he has previously undergone medical consultation andhospitali+ation.

The nsurance Commissioner ordered Great acific to pay !,#$$ plus legal interest and

,$$$.$$ as attorney(s fees. n appeal by Great acific, the Court of /ppeals reversed. tfound that the failure of 0aime Canilang to disclose previous medical consultation andtreatment constituted material information which should have been communicated to Great

acific to enable the latter to make proper in*uiries.

%ence this petition by the widow.

ssue:12 Canilang was guilty of misrepresentation.

!eld:3es. There was a right of the insurance company to rescind the contract if it was proventhat the insured committed fraud in not affirming that he was treated for heart condition andother ailments stipulated.

/part from certifying that he didn4t suffer from such a condition, Canilang also failed todisclose in the that he had twice consulted a doctor who had found him to be suffering from

"sinus tachycardia" and "acute bronchitis."

5nder the nsurance Code6

)ec. 7. / neglect to communicate that which a party knows and ought to communicate, iscalled a concealment.

)ec. 8. 9ach party to a contract of insurance must communicate to the other, in good faith,all factors within his knowledge which are material to the contract and as to which he makesno warranty, and which the other has not the means of ascertaining.

The information concealed must be information which the concealing party knew and should

have communicated. The test of materiality of such information is contained in )ection :!6

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)ec. :!. ;ateriality is to be determined not by the event, but solely by the probable andreasonable influence of the facts upon the party to whom the communication is due, informing his estimate of the disadvantages of the proposed contract, or in making his in*uiries.The information which 0aime Canilang failed to disclose was material to the ability of Greatacific to estimate the probable risk he presented as a sub