G.R. No. 175666, July 29, 2013 MANILA BANKERS LIFE INSURANCE CORORA!ION, Petitioner, v. CRESENCIA . ABAN,Respondent . Facts: On July 3, 1993, Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life nsurance !orporation (Bankers Life), "esi#natin# respon"ent !resencia $. %&an (%&an), 'er niece, as 'er &eneciary. $etitioner issue" nsurance $olicy *o. ++11 (t'e policy), -it' a face alue of $1//,///.//, in Sotero0s faor on %u#ust 3/, 1993, after t'e reuisite me"ical e2amination an" payment of t'e insurance premium. crala- irtuala- li&rary On %pril 1/, 199, + -'en t'e insurance policy 'a" &een in force for more t'an t-o years an" seen mont's, Sotero "ie". 4espon"ent le" a claim for t'e insurance procee"s on July 9, 199. $etitioner $etitioner con"ucte" an inesti#ation into t'e claim, 5 an" came out -it' t'e follo-in# n"in#s6 1. Sotero "i" not personally personally apply apply for insurance coera#e, as s'e -as illiterate7 8. Soter Sotero o -as sick sickly ly since since 199/ 199/ 3. Sotero "i" not 'ae 'ae t'e nancial nancial capa&ility capa&ility to pay pay t'e insurance insurance premiums premiums on nsurance nsurance $olicy *o. ++11 . Sotero Sotero "i" not si#n si#n t'e July 3, 1993 1993 applicati application on for insura insurance7 nce7 9 an": . 4espon"ent 4espon"ent -as t'e t'e one .-'o le" t'e insurance insurance application, application, an" 2 2 2 "esi#nate" "esi#nate" 'erself 'erself as t'e &eneciary. ;or t'e a&oe reasons, petitioner "enie" respon"ent0s claim on %pril 1, 199+ an" refun"e" t'e premiums pai" on t'e policy. On %pril 8, 199+, petitioner le" a ciil case for rescission an"rial !ourt. >'e main t'esis of t'e !omplaint -as t'at t'e policy -as o&taine" &y frau", concealment an"
Ruling of RTC: >'e 4>! #rante" respon"ent0s Motion to Dismiss6 n "ismissin# t'e case, t'e trial court foun" t'at Sotero, an" not respon"ent, -as t'e one -'o procure" t'e insurance7 t'us, Sotero coul" le#ally take out insurance on 'er o-n life an" ali"ly "esi#nate = as s'e "i" @ respon"ent as t'e &eneciary. t 'el" furt'er t'at un"er Section 5, petitioner 'a" only t-o years from t'e eAectiity of t'e policy to uestion t'e same7 since t'e policy 'a" &een in force for more t'an t-o years, petitioner is no- &arre" from contestin# t'e same or seekin# a rescission or annulment t'ereof.
Ruling of CA: >'e !% sustaine" t'e trial court. %pplyin# Section 5 to petitioner0s case, t'e !% 'el" t'at petitioner may no lon#er proe t'at t'e su&ect policy -as oi" ab initio or rescin"i&le &y reason of frau"ulent concealment or misrepresentation after t'e lapse of more t'an t-o years from its issuance. t ratiocinate" t'at petitioner -as euippe" -it' ample means to "etermine, -it'in t'e rst t-o years of t'e policy, -'et'er frau", concealment or misrepresentation -as present -'en t'e insurance coera#e -as o&taine". f it faile" to "o so -it'in t'e statutory t-o=year perio", t'en t'e insure" must &e protecte" an" allo-e" to claim upon t'e policy.
I""u#$ ?O* >C !OE4> O; %$$%LS 44D * SES>%**F >C %$$L!%>O* O; >C *!O*>S>%BL>G $4OHSO* * >C *SE4%*! !OD BG >C >4%L !OE4>.
Rul%&'$ >'e !ourt "enie" t'e $etition. >'e !ourt -ill not "epart from t'e trial an" appellate courts0 n"in# t'at it -as Sotero -'o o&taine" t'e insurance for 'erself, "esi#natin# respon"ent as 'er &eneciary. Bot' courts are in accor" in t'is respect, an" t'e !ourt is loat' to "istur& t'is. ?'ile petitioner insists t'at its in"epen"ent inesti#ation on t'e claim reeals t'at it -as respon"ent, posin# as Sotero, -'o o&taine" t'e insurance, t'is claim is no lon#er feasi&le in t'e -ake of t'e courts0 n"in# t'at it -as Sotero -'o o&taine" t'e insurance for 'erself. >'is n"in# of fact &in"s t'e !ourt. >'e so=calle" Iincontesta&ility clauseI preclu"es t'e insurer from raisin# t'e "efenses of false representations or concealment of material facts insofar as 'ealt' an" preious "iseases are concerne" if t'e insurance 'as &een in force for at least t-o years "urin# t'e insure"s lifetime. >'e p'rase I"urin# t'e lifetimeI foun" in Section 5 simply means t'at t'e policy is no lon#er consi"ere" in force after t'e insure" 'as "ie". >'e key p'rase in t'e secon" para#rap' of Section
5 is Ifor a perio" of t-o years.I %s &orne &y t'e recor"s, t'e policy -as issue" on %u#ust 3/. 1993, t'e insure" "ie" on %pril 1/, 199, an" t'e claim -as "enie" on %pril 1, 199+. >'e insurance policy -as t'us in force for a perio" of 3 years, + mont's, an" 8 "ays. !onsi"erin# t'at t'e insure" "ie" after t'e t-o=year perio", t'e plaintiA=appellant is, t'erefore, &arre" from proin# t'at t'e policy is oi" ab initio &y reason of t'e insure" frau"ulent concealment or misrepresentation or -ant of insura&le interest on t'e part of t'e &eneciary, 'erein "efen"ant=appellee. >'e Incontesta&ility !lauseI un"er Section 5 of t'e nsurance !o"e proi"es t'at an insurer is #ien t-o years K from t'e eAectiity of a life insurance contract an" -'ile t'e insure" is alie K to "iscoer or proe t'at t'e policy is oi" a& initio or is rescin"i&le &y reason of t'e frau"ulent concealment or misrepresentation of t'e insure" or 'is a#ent. %fter t'e t-o=year perio" lapses, or -'en t'e insure" "ies -it'in t'e perio", t'e insurer must make #oo" on t'e policy, een t'ou#' t'e policy -as o&taine" &y frau", concealment, or misrepresentation.
