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PHILIPPINE REPORTS ANNOTATED VOLUME 074

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468 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

Moreover, the alleged discovery would not affect the

validity of the bond given by him, which was conditioned
upon the payment of the costs "down to the time of the final
judgment in the action." There was a judgment rendered by
a com​petent court after due hearing, and to stay its
execution said bond was given as required by law. Were it
not for that bond the judgment of the justice of the peace in
favor of the plaintiff would have been executed more than
seven years ago. Thanks to that bond, the defendant and
her successor in interest have been able to continue in the
possession and enjoyment of the land in litigation. And yet
after the costs were incurred and after his client has
enjoyed the possession and use of the land in question,
counsel has the temerity now to ask the Court to cancel
said bond so that the surety-bondsmen may not respond for
the costs. The manifest unfairness of the proposition is its
best ref​utation.
The admission by the respondent judge of the amended
complaint is within his authority and sound discretion,
which, we find, he has not abused.
The order complained of is affirmed and the petition is
dismissed, with double costs against the petitioners.

Yulo, C.J., Moran, Paras, Horrilleno, and Bocobo, JJ.,

concur.

Order affirmed; petition dismissed.

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[No. 47593. December 29, 1943]

THE INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs.
SERAFIN D. FELICIANO ET AL., respondents.

1.LIFE INSURANCE; VALIDITY OF POLICY CONTAINING FALSE STATEMENTS

REGARDING HEALTH OF THE INSURED.·The policies were issued on the
basis of the statement subscribed by the applicant to the effect that
he was and had been in good health, when as a matter of fact he was
then suffering from advanced pulmonary tuberculosis. Held: Altho
the agent and the medical examiner knew that statement to be false,
no valid contract of insurance was entered into because there was no
real meeting of the minds of the parties.

469

VOL. 74, DECEMBER 29, 1943 469

Insular Life Assurance Co. vs. Feliciano et al.

2.ID.; ID.·When Evaristo Feliciano, the applicant for insurance, signed

the application in blank and authorized the soliciting agent and/or
the medical examiner of the Company to write the answers for him,
he made them his own agents for that pur​pose, and he was
responsible for their acts in that connection. If they falsified the
answers for him, he could not evade the responsibility for the
falsification. He was not supposed to sign the application in blank. He
knew that the answers to the questions therein, contained would be
"the basis of the pol​icy," and for that very reason he was required
with his signature to vouch for the truth thereof.
3.ID.; ID.; CONNIVANCE WITH SOLICITING AGENT AND MEDICAL EXAMINER.·
From all the facts and circumstances of the case, we are constrained
to conclude that the insured was a coparticipant, and coresponsible
with Agent David and Medical Examiner Valdez, in the fraudulent
procurement of the policies in question and that by reason thereof
said policies are void ab initio.

RESOLUTION on motion for reconsideration.

The facts are stated in the opinion of the court.
Manuel Roxas and Araneta, Zaragoza, Araneta &
Bautista for petitioner.
Delfin Joven and Pablo Lorenzo for respondents.
Ramirez & Ortigas as amici curiae.

OZAETA, J.:
In a four-to-three decision promulgated on September
13, 1941,1 this Court affirmed the judgment of the Court of
Ap​peals in favor of the respondents and against the
petitioner for the sum of P25,000, representing the value of
two insurance policies issued by the petitioner on the life of
Evaristo Feliciano. A motion to reconsider and set aside
said decision has been filed by the petitioner, and both
parties have submitted exhaustive and luminous written
ar​guments in support of their respective contentions.
The facts of the case are set forth in the majority and
dis​senting opinions heretofore handed down by this Court,
the salient points of which may be briefly restated as
follows:
Evaristo Feliciano, who died on September 29, 1935, was

1 Reported in 40 Off. Gaz., (Oct. 4, 1941) 2842-2855.

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470 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

suffering with advanced pulmonary tuberculosis when he

signed his application for insurance with the petitioner on
October 12, 1934. On that same date Doctor Trepp, who
had taken X-ray pictures of his lungs, informed the
respond​ent Dr. Serafin D. Feliciano, brother of Evaristo,
that the latter "was already in a very serious and
practically hopeless condition." Nevertheless the question
contained in the ap​plication·"Have you ever suffered from
any ailment or disease of the lungs, pleurisy, pneumonia or
asthma?"· appears to have been answered, "No." And
above the sig​nature of the applicant, following the answers
to the various questions propounded to him, is the
following printed state​ment:

"I declare on behalf of myself and of any person who shall have
or claim any interest in any policy issued hereunder, that each of
the above answers is full, complete and true, and that to the best of
my knowledge and belief I am a proper subject for life insurance."
(Exhibit K.)

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VOL. 74, DECEMBER 29, 1943 471

Insular Life Assurance Co. vs. Feliciano et al.

Each of the policies sued upon contains the following

stipulations:

"This policy and the application herefor constitute the entire

contract between the parties hereto. * * * Only the President, or
the Manager, acting jointly with the Secre​tary or Assistant
Secretary (and then only in writing signed by them) have power in
behalf of the Company to issue per​mits, or to modify this or any
contract, or to extend the time for making any premium payment,
and the Company shall not be bound by any promise or
representation heretofore or hereafter given by any person other than
the above-named officials, and by them only in writing and signed
conjointly as stated."

The application contains, among others, the following

statements:

"18. I [the applicant] hereby declare that all the above

statements and answers as well as all those that I may make to the
Company's Medical Examiner in continuation of this application, to
be complete, true and correct to the best of my knowledge and
belief, and I hereby agree as follows:
"1. That this declaration, with the answers to be given by me to
the Medical Examiner, shall be the basis of the policy and form part
of same.
***********
"3. That the said policy shall not take effect until the first
premium has been paid and the policy has been de​livered to and
accepted by me, while I am in good health.
"4. That the agent taking this application has no authority to
make, modify or discharge contracts, or to waive any of the
Company's rights or requirements.
"5. My acceptance of any policy issued on this application will
constitute a ratification by me of any corrections in or, additions to
this application made by the Company in the space provided 'For
Home Office Corrections or Additions Only.' I agree that
photographic copy of this application as corrected or added to shall
constitute sufficient notice to me of the changes made." (Emphasis
added.)

472

472 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

The petitioner insists that upon the facts of the case the
policies in question are null and void ab initio and that all
that the respondents are entitled to is the refund of the
premiums paid thereon. After a careful re-examination of
the facts and the law, we are persuaded that petitioner's
contention is correct. To the reasons adduced in the
dissenting opinion heretofore published, we only desire to
add the following considerations:
When Evaristo Feliciano, the applicant for insurance,
signed the application in blank and authorized the
soliciting agent and/or the medical examiner of the
Company to write the answers for him, he made them his
own agents for that purpose, and he was responsible for
their acts inxthat con​nection. If they falsified the answers
for him, he could not evade the responsibility for the
falsification. He was not supposed to sign the application in
blank. He knew that the answers to the questions therein
contained would be "the basis of the policy," and for that
very reason he was re​quired with his signature to vouch for
the truth thereof.
Moreover, from the facts of the case we cannot escape
the conclusion that the insured acted in connivance with
the soliciting agent and the medical examiner of the
Company in accepting the policies in question. Above the
signature of the applicant is the printed statement or
representation: "* * * I am a proper subject for life
insurance." In an​other sheet of the same application and
above another signature of the applicant was also printed
this statement: "That the said policy shall not take effect
until the first premium has been paid and the policy has
been delivered to and accepted by me, while I am in good
health." When the applicant signed the application he was
"having difficulty in breathing, * * * with a very high
fever." He had gone three times to the Santol Sanatorium
and had X-ray pictures taken of his lungs. He therefore
knew that he was not "a proper subject for life insurance."
When he accepted the policy, he knew that he was not in
good health. Nevertheless, he not only accepted the first
policy of P20,000 but then and

473

VOL. 74, DECEMBER 29, 1943 473

Insular Life Assurance Co. vs. Feliciano et al.

there applied for and later accepted another policy of

P5,000.
We cannot bring ourselves to believe that the insured
did not take the trouble to read the answers contained in
the photostatic copy of the application attached to and
made a part of the policy before he accepted it and paid the
premium thereon. He must have noticed that the answers
to the questions therein asked concerning his clinical
history were false, and yet he accepted the first policy and
applied for another. In any event, he obligated himself to
read the policy when he subscribed to this statement: "My
accept​ance of any policy issued on this application will
constitute a ratification by me of any corrections in or
additions to this application made by the Company * * *"
By ac​cepting the policy he became charged with knowledge
of its contents, whether he actually read it or not. He could
not ostrich-like hide his head from it in order to avoid his
part of the bargain and at the same time claim the benefit
there​of. He knew, or was chargeable with knowledge, from
the very terms of the two policies sued upon (one of which
is printed in English and the other in Spanish) that the
solicit​ing agent and the medical examiner had no power to
bind the Company by any verbal promise or oral
representation. The insured, therefore, had no right to rely
·and we cannot believe he relied in good faith·upon the
oral representation of said agent and medical examiner
that he (the applicant) was a fit subject for insurance
notwithstanding that he had been and was still suffering
with advanced pulmonary tu​berculosis.
From all the facts and circumstances of this case, we are
constrained to conclude that the insured was a
coparticipant, and coresponsible with Agent David and
Medical Ex​aminer Valdez, in the fraudulent procurement of
the policies in question and that by reason thereof said
policies are void ab initio.
Wherefore, the motion for reconsideration is sustained
and the judgment of the Court of Appeals is hereby
reversed. Let another judgment be entered in favor of the
respondents

474

474 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

and against the petitioner for the refund of the premiums

amounting to P1,389, with legal interest thereon from the
date of the complaint, and without any finding as to costs.

Moran, Paras, and Bocobo, J J., concur.

YULO, C.J., concurring:
I can find no quarrel with the legal considerations and
conclusions set forth in the original decision promulgated
by this Court. As. general rules of law they find f uil
support not only in reason and in logic, but also in simple
human sense of justice. More so, modern and complicated
practices attendant to the ever growing trade in life
insurance de​mand the strictest accountability by insurance
companies for acts of their authorized agents. In this way
only may the State afford reasonable protection to the
unwary public from abuse by such organizations as may be
found to be of questionable moral standards.
But a careful consideration of the evidentiary facts as
set forth in the decision of the Court of Appeals leads me to
conclude that the ends of justice would not be served by the
application to the present case of the rules so enunciated.
Rather, to serve the ends of justice the case of the
respondents should be removed from the protection of such
rules.
The subject of the insurance policies under consideration
is the life of the assured. It is contended by his
beneficiaries that they took these policies on the basis of a
life expectancy of a person gravely stricken with
tuberculosis. They have consistently made protestations
that they had so informed the agents of the insurance
company. But the policies were issued upon the life of the
assured, as a perfectly normal and healthy person. The
error is vital and goes to the very existence of the contract
itself. Who is responsible for the error ?
The direct cause, of course, is the false recitals in the ap​-
plication for insurance. While it is true that it was the
agents of the insurance company who filled out such
applica​tion, yet it was the assured who, by signing the
applica-

475

VOL. 74, DECEMBER 29, 1943 475

Insular Life Assurance Co. vs. Feliciano et al.

tion in blank, made it possible for the said agents to

procure the issuance of the policies on the basis of false
information, in order to suit their own purposes. Upon the
admitted facts, I am of the opinion that in justice and in
equity, the responsibility for the falsifications made by the
insurance agents in the preparation of the insurance
application should be laid at the door of the assured and
his beneficiaries.
I vote with the majority in granting the motion for
recon​sideration and in reversing the decision under review.
HONTIVEROS, J., dissenting:
The reasons given in the dissenting opinion in this case,
as published in the Official Gazette of October 4, 1941 (pp.
2847 to 2855), supplemented by those in the resolution of
the majority on the motion for reconsideration, do not seem
to me sufficient to overthrow the decision rendered by the
Court of First Instance, confirmed by the Court of Appeals,
and sustained by this Supreme Court in its decision of Sep​-
tember 18, 1941. The alleged connivance between the in​-
sured Evaristo Feliciano, the agent Romulo M. David, and
the medical examiner Dr. Gregorio Valdez not only does not
clearly appear of record, but on the contrary is denied in
the finding of facts of the court a quo and of the Court of
Ap​peals which cannot be reviewed or altered by this Court.
The mere fact that the insured signed at the bottom of
the application for insurance when some of its lines
intended for answers to certain questions were still in
blank, answers which according to the evidence and to the
findings of the two inferior courts he had grounds to believe
will be made in accordance with the information which he
and his family had given to agent David and to Dr. Valdez,
does not convert these two persons into agents of the
insured in a way as to make the latter responsible for the
acts of the former. That the photostatic copies of said forms
which are attached to the policies object of this case are
almost illegible, is a fact which should be taken into
account, together with the other fact that Evaristo
Feliciano does not know English, the

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476 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

language in which those documents are written. In sup​port

of this dissenting opinion, the following authorities may be
cited:

"The mere failure of the insured to inform himself of the insertion of

false answers in the application which has been filled out by the agent of
the insurer does not convict him of lack of good faith." (Vol. 5, Cooley's
Briefs on Insurance, 2nd Ed., p. 4136, and many cases cited.)
"The insured is not chargeable -with such negligence as will render
him liable for false answers inserted by the agent merely because he
signed the application in blank and trusted the agent to fill out by the
agent, without reading it." (Id., p. 4136, and many cases cited.)
"An illiterate person or one who does not understand the English
language (as is the case with Evaristo Feliciano) is not guilty of
inexcusable negligence in failing to read the application or having it read
to him, nor can it be said that such person deliberately made a false
statement because he did not read over the application." (81 ALR 865,
866, W. 117 ALR 796.)
"Nor can it be said that the assured, who has fully, frank​ly, truthfully,
and in good faith answered all the required questions, is guilty of
negligence in signing, without reading, the application which is
thereupon prepared by the agent. He is justified in assuming that the
agent, has, with equal good faith, truthfully recorded the answers given.
He may well say to the Company: 'You accredited this man to me as your
representative, and I signed the application thus pre​pared by him,
relying upon the character which you gave him, when you commissioned
him to come to me as your agent. If he acted dishonestly in the matter,
you, and not I, must suffer the consequences * * * !' (Germania Life Ins.
Co. vs. Lunkeheimer [1931] Ind., 538; 26 N. E., 1052.)
"In such case the acceptance of the policy, with this application
attached, does not require the insured to institute an investigation into
its provisions, or the conditions upon which it was issued, to ascertain
whether the agent has

477

VOL. 74, DECEMBER 29, 1943 477

Insular Life Assurance Co. vs. Feliciano et al.

acted in good faith, since, under such circumstances, the insured may
rely upon the presumption that he has been honestly dealt with by the
insurer." (Otto vs. Hartford Ins. Co., 38 Minn., 423).
"Besides, the principles that the insured is not bound to know the
contents of the application, and may rely on the agent's assurances that
his answers have been correctly written will, of course, apply with special
force where the insured is illiterate and unable to read, or is ignorant of
the language." (Vol. 5, Cooley's Briefs on Insurance, 2nd Ed. p. 4138,
cases cited.)
"And also where the photostatic copies of the application embodied in
the policy are practically illegible, the insured is not bound to know the
contents of the application." (New York Ins. Co. vs. Holpem D. C, 57 Fed.
2d, 200).
"According to the great weight of authority, if an agent of the insurer,
after obtaining from an applicant for insur​ance a correct and truthful
answer to interrogations con​tained in the application for insurance,
without knowledge of the applicant fills in false answers, either
fraudulently or otherwise, the insurer cannot assert the falsity of such
an​swers as a defense to the liability on the policy and this is generally
without regard to the subject matter of the an​swers or the nature of the
agent's duties or limitations on his authority, at least if not brought to
the attention of the applicant. It is equally well settled that if a correct
repre​sentation is made in a written application, or the insurance agent
issuing the policy is appraised of the true facts con​cerning the matter in
question, as for instance the title to the insured premises, but the agent
inserts an incorrect statement in the policy, the insurer cannot rely upon
the error in avoidance of its liability". Home Ins. Co. vs. Mendenhall, 154
111., 452, 45 NE., 1078, 36 LRA., 374; Phoenix Ins. Co. vs. Tucker, 92
111., 64, 34 Am Rep., 106; Commer​cial Ins. Co. vs. Spanknoble, 52 111.,
53, 4 Am. Report, 582; Young vs. Hartford F. Ins. Co. 45 Iowa, 377, 24
Am. Rep., 754; Welsh vs. London Assur. 151 Pa., 607, 25 A, 142, 21

478

478 PHILIPPINE REPORTS ANNOTATED

Insular Life Assurance Co. vs. Feliciano et al.

Am St. Rep., 726·(Taken from Am Juris, on Insurance Vol. 29, par. 843).
"An insured may be justified in signing an application in blank at the
request of the insurer's agent, who agrees to fill it in from data furnished
by the insured or from an old application. In fact, an insurer cannot
urge the falsity of representations contained in the policy issued, or in
the application, where such representations were inserted therein, either
by the company or its agent, after the application was signed, without
the knowledge or consent of the in​sured, who has made no such
representations." (Couch on Insurance, Vol. 4, par. 842 b.)

I believe that the motion for reconsideration presented

in this case should be denied, not only because of the
weighty reasons relied upon in the decision which it
attacks, but also because a dangerous precedent would
other​wise be established, for, with the destruction of the
confi​dence which the public has hitherto reposed in the
duly accedited agents of insurance companies and in their
exam​ining physicians, this branch of the economic life of
the people, will have to be unfavorably affected.
IMPERIAL, J.: I concur in the forgoing dissenting opinion:

Motion sustained; judgment reversed.

(Note: Justices Imperial and Hontiveros of the Court of

Appeals took part in this case by special designation.)
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