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Eguaras vs. Great Eastern Life Assurance

The petitioner filed a complaint against the respondent insurance company to collect on a life insurance policy after the insured passed away. The insurance company refused to pay, claiming fraud in obtaining the policy. The court ruled in favor of the petitioner, finding that the insurance was valid. Specifically, the court found that 1) the insured substituted a healthy person for the medical exam, deceiving the company, and 2) deception prior to a contract is valid grounds to invalidate consent, even if it does not constitute a criminal act. Therefore, the fraud of the insured and agent in substituting another for the medical exam did not invalidate the insurance contract.

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74 views1 page

Eguaras vs. Great Eastern Life Assurance

The petitioner filed a complaint against the respondent insurance company to collect on a life insurance policy after the insured passed away. The insurance company refused to pay, claiming fraud in obtaining the policy. The court ruled in favor of the petitioner, finding that the insurance was valid. Specifically, the court found that 1) the insured substituted a healthy person for the medical exam, deceiving the company, and 2) deception prior to a contract is valid grounds to invalidate consent, even if it does not constitute a criminal act. Therefore, the fraud of the insured and agent in substituting another for the medical exam did not invalidate the insurance contract.

Uploaded by

John Mark Revilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Eguaras vs.

Great Eastern Life Assurance


G.R. No. 10436
January 24, 1916

Facts

Dominador Albay applied with respondent insurance company to insure his life and
naming petitioner as the beneficiary. Respondent company accepted the application
for insurance. Dominador died and despite the fact that the beneficiary submitted
satisfactory proofs of his death and after respondent company investigated the event,
still it refused to pay to the plaintiff the value of the policy. Petitioner, through
counsel, filed a complaint against respondent. The counsel for respondent set up as
a special defense of fraud and deceit in obtaining the insurance policy based on a
complaint of frustrated estafa filed against Dominador. The court ruled in favor of
petitioner.

Issue & Ruling

Whether or not life insurance obtained by the insured was issued through fraud
or deceit

Yes. In the present case the fraud consisted in the fact that a healthy and robust
person was substituted in place of the insured invalid when Dr. Vidal made the
physical examination of the one who was seeking to be insured, for the real person
who desired to be insured and who ought to have been examined was in bad health
on and before the date of executing the insurance contract, of which facts the insured
Dominador Albay and the insurance agent Ponciano Remigio had full knowledge.

It is essential to the nature of the deceit, to which the foregoing article refers, that
said deceit be prior to or contemporaneous with the consent that is a necessary
requisite for perfecting the contract, but not that it may have occurred or happened
thereafter. A contract is therefore deceitful, for the execution whereof the consent of
one of the parties has been secured by means of fraud, because he was persuaded by
words or insidious machinations, statements or false promises, and a defective
consent wrung from him, even though such do not constitute estafa or any other
criminal act subject to the penal law.

The defendant company accepted the application for insurance made by Dominador
Albay and executed the contract comprised under articles 416 to 431 of the Code of
Commerce, although for the perfecting thereof the insured, Albay, as he was not in
good health, by connivance with the insurance company’s agent, presented Castor
Garcia to the physician Vidal, who was commissioned by the company to examine
applicants for life insurance and in view of the favorable report of the said physician,
who reported and certified that the person examined by him under the name of
Dominador Albay was in good health and possessed the qualifications required by
said insurance company for perfecting the contract, so the company freely and
willingly consented to the execution thereof, effectively induced thereto by the result
of the medical examination and of the favorable professional report issued in view
of the appearance of an individual who was in good health, but different from the
invalid who was seeking to be insured and who died one month and twenty-three
days after the insurance had been granted.

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