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    TAN V CA

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    Raven Claire Malaca
    The court ruled that the Philippine American Life Insurance Company (Philamlife) could rescind the life insurance policy of Tan Lee Siong. The policy had been in force for only one year and five months before Tan's death from hepatoma, less than the two-year incontestability period required. Philamlife was therefore not barred from proving the policy was void due to Tan's fraudulent concealment of his history of hypertension, diabetes, and liver disorders on his insurance application. As the deceased signed the application, it was presumed he understood it and intended the ordinary consequences of not disclosing his medical conditions.

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    TAN V CA

    Uploaded by

    Raven Claire Malaca
    82 views2 pages
    The court ruled that the Philippine American Life Insurance Company (Philamlife) could rescind the life insurance policy of Tan Lee Siong. The policy had been in force for only one year and five months before Tan's death from hepatoma, less than the two-year incontestability period required. Philamlife was therefore not barred from proving the policy was void due to Tan's fraudulent concealment of his history of hypertension, diabetes, and liver disorders on his insurance application. As the deceased signed the application, it was presumed he understood it and intended the ordinary consequences of not disclosing his medical conditions.

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    TAN v CA

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    The court ruled that the Philippine American Life Insurance Company (Philamlife) could rescind the life insurance policy of Tan Lee Siong. The policy had been in force for only one year and five months before Tan's death from hepatoma, less than the two-year incontestability period required. Philamlife was therefore not barred from proving the policy was void due to Tan's fraudulent concealment of his history of hypertension, diabetes, and liver disorders on his insurance application. As the deceased signed the application, it was presumed he understood it and intended the ordinary consequences of not disclosing his medical conditions.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views2 pages

    TAN V CA

    Uploaded by

    Raven Claire Malaca
    The court ruled that the Philippine American Life Insurance Company (Philamlife) could rescind the life insurance policy of Tan Lee Siong. The policy had been in force for only one year and five months before Tan's death from hepatoma, less than the two-year incontestability period required. Philamlife was therefore not barred from proving the policy was void due to Tan's fraudulent concealment of his history of hypertension, diabetes, and liver disorders on his insurance application. As the deceased signed the application, it was presumed he understood it and intended the ordinary consequences of not disclosing his medical conditions.

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    © All Rights Reserved
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    of 2

    EMILIO TAN, JUANITO TAN, ALBERTO TAN and ARTURO TAN vs.

    COURT OF
    APPEALS and THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY
    (June 29, 1989 GUTIERREZ, JR., J.)
    The incontestability clause precludes the insurer from raising the defenses of false
    representations or concealment of material facts insofar as health and previous
    diseases are concerned if the insurance has been in force for at least two years during
    the insured's lifetime.

    FACTS:
    Tan Lee Siong, father of petitioners, applied for life insurance (P80,000.00) with
    respondent Philamlife. It was approved and issued with petitioners as the beneficiaries.

    Tan died of hepatoma. Petitioners then filed with Philamlife their claim for the
    proceeds of the life insurance policy. However, Philamlife denied petitioners' claim and
    rescinded the policy by reason of the alleged misrepresentation and concealment of
    material facts made by the deceased Tan in his application for insurance. The premiums
    paid on the policy were refunded.

    Petitioners filed a complaint against the Philamlife. Both the Insurance


    Commissioner and CA dismissed petitioners' complaint.

    ISSUE:
    WON respondent PHILAMLIFE can rescind the contract of inurance.

    RULING:
    YES. The incontestability clause precludes the insurer from raising the defenses
    of false representations or concealment of material facts insofar as health and previous
    diseases are concerned if the insurance has been in force for at least two years during
    the insured's lifetime. The phrase "during the lifetime" found in Section 48 simply means
    that the policy is no longer considered in force after the insured has died. The key phrase
    in the second paragraph of Section 48 is "for a period of two years."

    The policy was thus in force for a period of only one year and five months (issued
    on November 6,1973 and the insured died on April 26,1975). Considering that the insured
    died before the two-year period had lapsed, respondent company is not barred from
    proving that the policy is void ab initio by reason of the insured's fraudulent concealment
    or misrepresentation.

    Moreover, the deceased (a businessman) would not have affixed his signature on
    the application form unless he clearly understood its significance. The presumption is that
    a person intends the ordinary consequence of his voluntary act and takes ordinary care
    of his concerns.

    Due to the concealment made by the deceased of his consultations and treatments
    for hypertension, diabetes and liver disorders, Philamlife was misled into accepting the
    risk and approving his application as medically standard and dispensing with further
    medical investigation and examination. For as long as no adverse medical history is
    revealed in the application form, an applicant for insurance is presumed to be healthy and
    physically fit and no further medical investigation or examination is conducted by
    respondent company.

    NOTE: There is no strong showing that the "fine print" or "contract of adhesion" rule in
    Sweet Lines, Inc. v. Teves should be applied in this case.

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