DELFIN NARIO vs. PHILIPPINE AMERICAN LIFE INSURANCE COMPANYG.R. No. L-22796, June 26, 1967

FACTS:Mrs. Alejandra Santos-Mario was, upon application, issued, on June 12, 1959, by the Philippine American Life Insurance Co., a life insurance policy under a 20-year endowment plan, with a face value of P5,000.00. She designated thereon her husband, Delfin Nario, and their unemancipated minor son, Ernesto Nario, as her irrevocable beneficiaries. About the middle of June, 1963, she then applied for a loan on the above policy with PHILAMLIFE to w/c she is entitled to as policy holder when the policy has been in force for more than three years. The purpose of such loan was for the school expenses ofErnesto. Theapplication bore the written signature and consent of Delfin Nario in two capacities first, as one of the irrevocable beneficiaries of the policy; and the other, as the father-guardian of said minor son and irrevocable beneficiary, Ernesto Nario, and as the legal administrator of the minors properties, pursuant to Article 320 of the Civil Code of the Philippines. PHILAMLIFE denied the loan application contending that written consent of the minor son must not only be given by his father as legal guardian but it must also be authorized by the court in a competent guardianship proceeding. Mrs. Nario then signified her decision to surrender her policy and demand its cash value which then amounted to P 520. The Insurance Company also denied the surrender of the policy on the same ground as that given in disapproving the loan application. Mrs. Nario sued PHILAMLIFE praying that the latter grant their loan application and/or accept the surrender of said policy in exchange for its cash value. On September 10, 1963, Mrs. Nario and her husband, Delfin, sued PHILAMLIFE praying that the latter grant their loan application and/or accept the surrender of said policy in exchange for its cash value. Defendant PHILAMLIFE contends that the loan application and the surrender of the policy involved acts of disposition and alienation of the property rights of the minor, said acts are not within the power of administrator granted under Art. 320 in relation to art. 326 CC, hence, mere written consent given by the father-guardian, for and in behalf of the minor son, without any court authority therefor, was not a sufficient compliance of the law. The lower court ruled agreeing with defendants contention, sustained defendants affirmative defense, and rendered, on January 28, 1964, its decision dismissing plaintiffs complaint. Unable to secure reconsideration of the trial Courts ruling, petitioner appealed directly to this Court, contending that the minors interest amounted to only one-half of the policys cash surrender value of P520.00; that under Rule 96, Section 2 of the Revised Rules of Court, payment of the wards debts is within the powers of the guardian, where no realty is involved; hence, there is no reason why the father may not validly agree to the proposed transaction on behalf of the minor without need of court authority.ISSUE:Whether or not PHILAMLIFE was justified in refusing to grant the loan application and the surrender of the policy.HELD:YES. The decision appealed from is affirmed. Costs against appellants Nario. The appeal is unmeritorious.SC agreed with the lower court that the vested interest or right of the beneficiaries in the policy should be measured on its full face value and not on its cash surrender value, for in case of death of the insured, said beneficiaries are paid on the basis of its face value and in case the insured should discontinue paying premiums, the beneficiaries may continue paying it and are entitled to automatic extended term or paid-up insurance options, etc. and that said vested right under the policy cannot be divisible at any given time. SC likewise agreed with the conclusion of the lower court that the proposed transactions in question constitute acts of disposition or alienation of property rights and not merely of management or administration because they involve the incurring or termination of contractual obligations. The full face value of the policy is P5,000.00 and the minors vested interest therein, as one of the two (2) irrevocable beneficiaries, consists of one-half () of said amount or P2,500.00. Applying laws (CC and rules of Court),the father a must file a petition for guardianship and post a guardianship bond.In the case at bar, the father did not file any petition for guardianship nor post a guardianship bond, and as such cannot possibly exercise the powers vested on him as legal administrator of the minors property. The consent gives for and in behalf of the son without prior court authorization to the loan application and the surrender was insufficient and ineffective and PHILAMLIFE was justified in disapproving the said applications. Assuming that the property of the ward was less than P2,000, the effect would be the same, since the parents would only be exempted from filing a bond and judicial authorization, but their acts as legal administrators are only limited to acts of management or administration and not to acts of encumbrance or disposition.

ANG KA YU vs. PHOENIX ASSURANCE CO. LTD.1 CAR 704 28 September 1961

FACTS:Ang Ka Yu, herein petitioner, was engaged in the business of dyeing and washing clothes. This would require his clients to deliver and deposit to the petitioner such clothes that would require his service. He acquired from Phoenix Assurance Co. Ltd., herein respondent, a policy insuring the effects of his business. When the clothes he had in his possession were lost, Ang Ka Yu sought to recover from Phoenix Assurance. However, the latter refused the claim and denied liability on the ground that the petitioner was a mere possessor of said items, and therefore did not have any insurable interest to the same.ISSUE:Whether or not the petitioner, allegedly being a mere possessor, has an insurable interest in the property of concern.HELD:Yes. A person to whom clothes are delivered for dyeing or washing has insurable interest on such clothes, because destruction of the textiles will mean pecuniary loss to him as he will be deprived of the compensation he would be entitled to for dyeing the same, not to mention his pecuniary liability for labour and expenses.A person who is interested in the safety and preservation of materials in his possession belonging to third parties because he stands either to benefit from their continued existence or to be prejudiced by their destruction, has an insurable interest thereon which is not necessarily limited to the extent of his liability to the owners thereof. A person having mere right of possession of property may insure it to its full value and in his own name, even when he is not responsible for its safekeeping.

Philamcare Health Systems vs. Court of Appeals, G.R. No. 125678, March 18, 2002Facts:Ernani Trinos applied for ahealth carecoverage with Philam. He answered no to a question asking if he or his family members were treated to heart trouble, asthma,diabetes, etc.The application was approved for 1 year. He was also given hospitalization benefits and out-patient benefits. After the period expired, he was given an expanded coverage for Php 75,000. During the period, he suffered from heart attack and was confined at MMC. The wife tried to claim the benefits but the petitioner denied it saying that he concealed his medical history by answering no to the aforementioned question. She had to pay for the hospitalbillsamounting to 76,000. Her husband subsequently passed away. She filed a case in the trial court for the collection of the amount plus damages. She was awarded 76,000 for thebillsand 40,000 for damages. The CA affirmed but deleted awards for damages. Hence, this appeal.

Issue: WON ahealth careagreement is not an insurance contract; hence the incontestability clause underthe InsuranceCode does not apply.

Held: No. Petition dismissed.Petitioner claimed that it granted benefits only when the insured is alive during the one-year duration. It contended that there was no indemnification unlike in insurance contracts. It supported this claim by saying that it is a health maintenance organization covered by the DOH and notthe InsuranceCommission. Lastly, it claimed that the Incontestability clause didnt apply because two-year and not one-year effectivity periods were required. Section 2 (1) ofthe InsuranceCode defines a contract of insurance as an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.Section 3 states: every person has an insurable interest in the life and health:(1) of himself, of his spouse and of his children.In this case, the husbands health was the insurable interest. Thehealth careagreement was in the nature of non-life insurance, which is primarily a contract of indemnity. The provider must pay for themedical expensesresulting from sicknessor injury.While petitioner contended that the husband concealed material fact of hissickness, the contract stated that:that any physician is, by these presents, expressly authorized to disclose or give testimony at anytime relative to any information acquired by him in his professional capacity uponany questionaffecting the eligibility forhealth carecoverage of the Proposed Members.This meant that the petitioners required him to sign authorization to furnish reports about hismedical condition. The contract also authorized Philam to inquire directly to his medical history.Hence, the contention of concealment isnt valid.They cant also invoke the Invalidation of agreement clause where failure of the insured to disclose information was a grounds for revocation simply because the answer assailed by the company was the heart condition question based on the insureds opinion. He wasnt amedical doctor, so he cant accurately gauge his condition.Fraudulent intent must be proven to rescind the contract. This was incumbent upon the provider.Having assumed a responsibility underthe agreement, petitioner is bound to answer the same to the extent agreed upon. In the end, the liability of thehealth care providerattaches once the member is hospitalized for the disease or injury covered bythe agreementor whenever he avails of the covered benefits which he has prepaid.Section 27 ofthe InsuranceCode- a concealment entitles the injured party to rescind a contract of insurance.As to cancellation procedure- Cancellation requires certain conditions:1. Prior notice of cancellation to insured;2. Notice must be based on the occurrence after effective date of the policy of one or more of the grounds mentioned;3. Must be in writing, mailed or delivered to the insured at the address shown in the policy;4. Must state the grounds relied upon provided in Section 64 ofthe InsuranceCode and upon request of insured, to furnish facts on which cancellation is basedNone were fulfilled by the provider.As to incontestability- The trial court said that under the title Claim procedures of expenses, the defendant Philamcare Health Systems Inc. had twelve months from the date of issuance ofthe Agreementwithin which tocontest the membership of the patient if he had previous ailment of asthma, and six months from the issuance ofthe agreementif the patient was sick ofdiabetesor hypertension. The periods having expired, the defense of concealment or misrepresentation no longer lie.