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117 SCRA 187 – Mercantile Law – Insurance Law – Representation – Collection of Premium Even Though Insured is Disqualified (Age)
In April 1969, Carmen Lapuz filled out an application form for insurance under Manila Banker Life Assurance Corporation. She stated that her date of birth was July 11, 1904. Upon payment of the Php20.00 premium, she was issued the insurance policy in April 1969. In May 1969, Carmen Lapuz died in a vehicular accident. Regina Edillon, who was named a beneficiary in the insurance policy sought to collect the insurance proceeds but Manila Banker denied the claim. Apparently, it is a rule of the insurance company that they were not to issue insurance policies to “persons who are under the age of sixteen (16) years of age or over the age of sixty (60) years …” Note, that Lapuz was already 65 years old when she applied for the insurance policy.
ISSUE: Whether or not Edillon is entitled to the insurance claim as a beneficiary.
HELD: Yes. Carmen Lapuz did not conceal her true age. Despite filling out the form and disclosing her date of birth therein, the insurance company still received premium from Lapuz and issued the corresponding insurance policy to her. When the accident happened, the insurance policy has been in force for 45 days already and such time was already sufficient for Manila Banker to notice the fact that Lapuz is already over 60 years old and thereby cancel the insurance policy. If Manila Banker failed to act, it is either because it was willing to waive such disqualification; or, through the negligence or incompetence of its employees for which it has only itself to blame, it simply overlooked such fact. Under the circumstances, Manila Banker is already deemed in estoppel.