On January 10, 2001, Atty. Jesus Sibya, Jr. (Atty. Jesus Jr.

) applied for life insurance with Sun

"Last 1987, had undergone lithotripsy due to kidney stone under Dr. Jesus Benjamin Mendoza
at National Kidney Institute, discharged after 3 days, no recurrence as claimed." [6]
On February 5, 2001, Sun Life approved Atty. Jesus Jr.'s application and issued Insurance
Policy No. 031097335. The policy indicated the respondents as beneficiaries and entitles them
to a death benefit of P1,000,000.00 should Atty. Jesus Jr. dies on or before February 5, 2021,
[7]
or a sum of money if Atty. Jesus Jr. is still living on the endowment date.

On May 11, 2001, Atty. Jesus Jr. died as a result of a gunshot wound in San Joaquin, Iloilo. As
such, Ma. Daisy filed a Claimant's Statement with Sun Life to seek the death benefits
[8]
indicated in his insurance policy.

In a letter dated August 27, 2001, however, Sun Life denied the claim on the ground that the
details on Atty. Jesus Jr.'s medical history were not disclosed in his application.
Simultaneously, Sun Life tendered a check representing the refund of the premiums paid by
[9]
Atty. Jesus Jr.

The respondents reiterated their claim against Sun Life thru a letter dated September 17,
2001. Sun Life, however, refused to heed the respondents' requests and instead filed a
Complaint for Rescission before the RTC and prayed for judicial confirmation of Atty. Jesus
[10]
Jr.'s rescission of insurance policy.

In its Complaint, Sun Life alleged that Atty. Jesus Jr. did not disclose in his insurance
application his previous medical treatment at the National Kidney Transplant Institute in May
and August of 1994. According to Sun Life, the undisclosed fact suggested that the insured
was in "renal failure" and at a high risk medical condition. Consequently, had it known such
[11]
fact, it would not have issued the insurance policy in favor of Atty. Jesus Jr.

For their defense, the respondents claimed that Atty. Jesus Jr. did not commit
misrepresentation in his application for insurance. They averred that Atty. Jesus Jr. was in
good faith when he signed the insurance application and even authorized Sun Life to inquire
further into his medical history for verification purposes. According to them, the complaint is
[12]
just a ploy to avoid the payment of insurance claims.

Ruling of the RTC

[13]
On March 16, 2009, the RTC issued its Decision dismissing the complaint for lack of merit.
[14]
The RTC held that Sun Life violated Sections 241, paragraph 1(b), (d), and (e) and
[15]
242 of the Insurance Code when it refused to pay the rightful claim of the respondents.
Moreover, the RTC ordered Sun Life to pay the amounts of P1,000,000.00 as death benefits,
P100,000.00 as moral damages, P100,000.00 as exemplary damages, and P100,000.00 as
attorney's fees and costs of suit.

The RTC held that Atty. Jesus Jr. did not commit material concealment and misrepresentation
when he applied for life insurance with Sun Life. It observed that given the disclosures and the
waiver and authorization to investigate executed by Atty. Jesus Jr. to Sun Life, the latter had
 [16]
all the means of ascertaining the facts allegedly concealed by the applicant.

Aggrieved, Sun Life elevated the case to the CA.

Ruling of the CA

[17]
On appeal, the CA issued its Decision dated November 18, 2013 affirming the RTC decision
in ordering Sun Life to pay death benefits and damages in favor of the respondents. The CA,
however, modified the RTC decision by absolving Sun Life from the charges of violation of
[18]
Sections 241 and 242 of the Insurance Code.

The CA ruled that the evidence on records show that there was no fraudulent intent on the
part of Atty. Jesus Jr. in submitting his insurance application. Instead, it found that Atty.
Jesus Jr. admitted in his application that he had sought medical treatment for kidney ailment.
[19]

[20]
Sun Life filed a Motion for Partial Reconsideration dated December 11, 2013 but the same
[21]
was denied in a Resolution dated February 13, 2014.

Undaunted, Sun Life filed an appeal by way of petition for review on certiorari under Rule 45
of the Rules of Court before this Court.

The Issue

Essentially, the main issue of the instant case is whether or not the CA erred when it affirmed
the RTC decision finding that there was no concealment or misrepresentation when Atty.
Jesus Jr. submitted his insurance application with Sun Life.

Ruling of the Court

The petition has no merit.

[22]
In Manila Bankers Life Insurance Corporation v. Aban, the Court held that if the insured
dies within the two-year contestability period, the insurer is bound to make good its obligation
under the policy, regardless of the presence or lack of concealment or misrepresentation. The
Court held:

Section 48 serves a noble purpose, as it regulates the actions of both the insurer and the
insured. Under the provision, an insurer is given two years - from the effectivity of a life
insurance contract and while the insured is alive - to discover or prove that the policy is
void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation
of the insured or his agent. After the two-year period lapses, or when the insured dies within
the period, the insurer must make good on the policy, even though the policy was obtained by
fraud, concealment, or misrepresentation. This is not to say that insurance fraud must be
rewarded, but that insurers who recklessly and indiscriminately solicit and obtain business
must be penalized, for such recklessness and lack of discrimination ultimately work to the
detriment of bona fide takers of insurance and the public in general.[23] (Emphasis ours)
In the present case, Sun Life issued Atty. Jesus Jr.'s policy on February 5, 2001. Thus, it has
two years from its issuance, to investigate and verify whether the policy was obtained by
fraud, concealment, or misrepresentation. Upon the death of Atty. Jesus Jr., however, on May
11, 2001, or a mere three months from the issuance of the policy, Sun Life loses its right to
rescind the policy. As discussed in Manila Bankers, the death of the insured within the two-
year period will render the right of the insurer to rescind the policy nugatory. As such, the
incontestability period will now set in.

Assuming, however, for the sake of argument, that the incontestability period has not yet set
in, the Court agrees, nonetheless, with the CA when it held that Sun Life failed to show that
Atty. Jesus Jr. committed concealment and misrepresentation.

As correctly observed by the CA, Atty. Jesus Jr. admitted in his application his medical
treatment for kidney ailment. Moreover, he executed an authorization in favor of Sun Life to
conduct investigation in reference with his medical history. The decision in part states:

Records show that in the Application for Insurance, [Atty. Jesus Jr.] admitted that he had
sought medical treatment for kidney ailment. When asked to provide details on the said
medication, [Atty. Jesus Jr.] indicated the following information: year (" 1987"), medical
procedure ("undergone lithotripsy due to kidney stone "), length of confinement ("3 days"),
attending physician ("Dr. Jesus Benjamin Mendoza") and the hospital ("National Kidney
Institute").

It appears that [Atty. Jesus Jr.] also signed the Authorization which gave [Sun Life] the
opportunity to obtain information on the facts disclosed by [Atty. Jesus Jr.] in his insurance
application. x x x

x x x x

Given the express language of the Authorization, it cannot be said that [Atty. Jesus Jr.]
concealed his medical history since [Sun Life] had the means of ascertaining [Atty. Jesus
Jr.'s] medical record.

With regard to allegations of misrepresentation, we note that [Atty. Jesus Jr.] was not a
medical doctor, and his answer " no recurrence" may be construed as an honest opinion.
Where matters of opinion or judgment are called for, answers made in good faith and without
intent to deceive will not avoid a policy even though they are untrue. [24] (Citations omitted and
italics in the original)
Indeed, the intent to defraud on the part of the insured must be ascertained to merit
rescission of the insurance contract. Concealment as a defense for the insurer to avoid
liability is an affirmative defense and the duty to establish such defense by satisfactory and
[25]
convincing evidence rests upon the provider or insurer. In the present case, Sun Life failed
to clearly and satisfactorily establish its allegations, and is therefore liable to pay the
proceeds of the insurance.

Moreover, well-settled is the rule that this Court is not a trier of facts. Factual findings of the
lower courts are entitled to great weight and respect on appeal, and in fact accorded finality
[26]
when supported by substantial evidence on the record.

WHEREFORE, the petition for review is DENIED. The Decision dated November 18, 2013 and
Resolution dated February 13, 2014 of the Court of Appeals in CA-G.R. CV. No. 93269 are
hereby AFFIRMED.

SO ORDERED.

Velasco, Jr., (Chairperson), and Perez, JJ., concur.