Sunlife Assurance Company of Canada vs.

CA
PETITIONER: Sunlife Assurance Company of Canada
RESPONDENT: Court of Appeals, Spouses Rolando and Bernarda Bacani

DOCTRINE: CONCEALMENT In weighing the evidence presented, the trial

court
concluded
that
indeed
there
was
concealment
and
misrepresentation, however, it was done in good faith and the facts
concealed or misrepresented were irrelevant since the policy was nonmedical. SC disagrees. Section 26 of The Insurance Code is explicit in
requiring a party to a contract of insurance to communicate to the other, in
good faith, all facts within his knowledge which are material to the
contract and as to which he makes no warranty, and which the other has no
means of ascertaining. Said Section provides: A neglect to communicate
that which a party knows and ought to communicate, is called
concealment.

FACTS:
Robert Bacani procured life insurance from petitioner Sunlife. It
was valued at P100,000.00, with double indemnity in case of
accidental death. The designated beneficiary was his mother,
respondent Bernarda Bacani.
Robert died in a plane crash.
Bernarda filed a claim with Sunlife.
o Sunlife rejected the claim after conducting investigation.
o In a letter, Sunlife explained that Robert did not disclose
material facts relevant to the issuance of the policy, thus
rendering the contract of insurance voidable.
o A check representing the total premiums paid in the
amount of P10,172.00 was attached to said letter.
Sunlife alleges that Robert gave false statements in his application.
o He answered that he did not go to any doctor or have been
admitted in any institution when in fact, it was found that
he did.

He was examined and diagnosed in the Lung Center with

renal failure.
Spouses Bacani filed an action for specific performance in RTC.
Sunlife filed a counterclaim. It used the documents of Robert in the
Lung Center.
RTC: Ruled in favor of Spouses Bacani. The facts concealed by
Robert were made in good faith and under a belief that they
need not be disclosed.
CA: Affirmed RTC. Sunlife cannot avoid its obligation by claiming
concealment because the cause of death was unrelated to the facts
concealed by the insured.
o

ISSUE: W/N Spouses Bacani (beneficiary) can claim even if there is

concealment NO
RATIO:
Sec. 26 of The Insurance Code is explicit in requiring a party to a
contract of insurance to communicate to the other, in good faith,
all facts within his knowledge which are material to the contract
and as to which he makes no warranty, and which the other has no
means of ascertaining.
Materiality is to be determined not by the event, but solely by the
probable and reasonable influence of the facts upon the party to
whom communication is due, in forming his estimate of the
disadvantages of the proposed contract or in making his inquiries.
In here, Robert failed to disclose information that are material and
relevant to the issuance of the insurance policy. The matters may
affect the application: either he will be charged for a higher
premium or the insurer rejecting his application.
Good faith is NOT a defense for concealment.
o The act of Robert not reporting that he has been
hospitalized raises doubts. It appears that the concealment
was deliberate on his part.
Petition GRANTED.