ARANILLA V. INSULAR LIFE CONCEALMENT 69 OG NO.4 637 - Facts: > In 1959, Jose Aranilla applied for life insurance with Insular. In his application, these 2 questions appeared: o WON he has suffered from any disease of the kidney and urinary tract, to which he answered NO. o WON he has been confined in a hospital for consultation and treatment, to which he answered that in 1947, he was confined due to influenza. > The truth however, was that a few months prior to his application, he was confined and treated for nephritis, a disease of the kidney and urinary tract, and he was accordingly informed of the cause. > When Aranilla died of cirrhosis of the liver, Insular refused to pay the proceeds due to concealment. Issue: Whether rescinded. the contract can be G.R. No. 186983 February 22, 2012 MA. LOURDES S. FLORENDO, Petitioner, vs. PHILAM PLANS, INC., PERLA ABCEDE MA. CELESTE ABCEDE, Respondents. FACTS: Manuel Florendo filed an application for comprehensive pension plan with respondent Philam Plans, Inc. (Philam Plans) Manuel signed the application and left to Perla the task of supplying the information needed in the application. Respondent Ma. Celeste Abcede, Perla’s daughter, signed the application as sales counselor. Philam Plans issued Pension Plan Agreement to Manuel, with petitioner Ma. Lourdes S. Florendo, his wife, as beneficiary. In time, Manuel paid his quarterly premiums. Eleven months later, Manuel died of blood poisoning. Subsequently, Lourdes filed a claim with Philam Plans for the payment of the benefits under her husband’s plan but Philam Plans declined her claim prompting her to file the present action against the pension plan company before the Regional Trial Court (RTC) of Quezon City and ruled in favor of Ma. Lourdes. However, the Court of Appeals then reversed the RTC decision. Hence this appeal. ISSUE: Whether or not Ma. Lourdes could claim benefits as the beneficiary of her husband under the insurance plan despite consideration that her husband Manuel concealed the true condition of his health. RULING: The Supreme Court answers this to the negative and the AFFIRMED in its entirety the decision of the Court of Appeals. The comprehensive pension plan that Philam Plans issued contains a oneyear incontestability period. It states: VIII. INCONTESTABILITY After this Agreement has remained in force for one (1) year, we can no longer contest for health reasons any claim for insurance under this Agreement, except for the reason that installment has not been paid (lapsed), or that you are not insurable at the time you bought this pension program by reason of age. If this Agreement lapses but is reinstated afterwards, the one (1) year Held: Yes. If an answer given by the insured to a specific question asked by the insurer in an application for life insurance turns out to be false, it is a concealment of a material fact which entitles the insurer to rescind, even if the insured died of an ailment which has NO connection with the specific questions falsely answered by him. This is because materiality is to be determined NOT by the event but ONLY by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract or in making his inquiries. Ma. Lourdes S. Florendo v. Philam Plans, Inc., Perla Abcede and Ma. Celeste Abcede, G.R. No. 186983, February 22, 2012 contestability period shall start again on the date of approval of your request for reinstatement. The above incontestability clause precludes the insurer from disowning liability under the policy it issued on the ground of concealment or misrepresentation regarding the health of the insured after a year of its issuance. Since Manuel died on the eleventh month following the issuance of his plan, the one year incontestability period has not yet set in. Consequently, Philam Plans was not barred from questioning Lourdes’ entitlement to the benefits of her husband’s pension plan. > Grepalife was ordered to pay the widow by the Insurance Commissioner holding that there was no intentional concealment on the Part of Canilang and that Grepalife had waived its right to inquire into the health condition of the applicant by the issuance of the policy despite the lack of answers to "some of the pertinent questions" in the insurance application. CA reversed. Issue: Whether or not Grepalife is liable. Held: SC took note of the fact that Canilang failed to disclose that hat he had twice consulted Dr. Wilfredo B. Claudio who had found him to be suffering from "sinus tachycardia" and "acute bronchitis. Under the relevant provisions of the Insurance Code, the information concealed must be information which the concealing party knew and "ought to [have] communicate[d]," that is to say, information which was "material to the contract. The information which Canilang failed to disclose was material to the ability of Grepalife to estimate the probable risk he presented as a subject of life insurance. Had Canilang disclosed his visits to his doctor, the diagnosis made and the medicines prescribed by such doctor, in the insurance application, it may be reasonably assumed that Grepalife would have made further inquiries and would have probably refused to issue a non-medical insurance policy or, at the very least, required a higher premium for the same coverage. The materiality of the information withheld by Canilang from Grepalife did not depend upon the state of mind of Jaime Canilang. A man's state of mind or subjective belief is not capable of proof in our judicial process, except through proof of external acts or failure to act from which inferences as to his subjective belief may be reasonably drawn. Neither does materiality depend upon the actual or physical events which ensue. Materiality relates rather to the "probable and reasonable influence of the facts" upon the party to whom the communication should have been made, in assessing the ------------- Vda. De Canilang v. CA, 223 SCRA 443 (1993) VDA. DE CANILANG V. CA CONCEALMENT 223 SCRA 443 (1993) - Facts: > Canilang consulted Dr. Claudio and was diagnosed as suffering from "sinus tachycardia." Mr. Canilang consulted the same doctor again on 3 August 1982 and this time was found to have "acute bronchitis." > On the next day, 4 August 1982, Canilang applied for a "non-medical" insurance policy with Grepalife naming his wife, as his beneficiary. Canilang was issued ordinary life insurance with the face value of P19,700. > On 5 August 1983, Canilang died of "congestive heart failure," "anemia," and "chronic anemia." The wife as beneficiary, filed a claim with Grepalife which the insurer denied on the ground that the insured had concealed material information from it. > Vda Canilang filed a complaint with the Insurance Commissioner against Grepalife contending that as far as she knows her husband was not suffering from any disorder and that he died of kidney disorder. risk involved in making or omitting to make further inquiries and in accepting the application for insurance; that "probable and reasonable influence of the facts" concealed must, of course, be determined objectively, by the judge ultimately. SC found it difficult to take seriously the argument that Grepalife had waived inquiry into the concealment by issuing the insurance policy notwithstanding Canilang's failure to set out answers to some of the questions in the insurance application. Such failure precisely constituted concealment on the part of Canilang. Petitioner's argument, if accepted, would obviously erase Section 27 from the Insurance Code of 1978. therefore was made in good faith. Asian should have made an inquiry as to the illness and operation of Kwong when it appeared on the face of the application that a question appeared to be imperfectly answered. Asian’s failure to inquire constituted a waiver of the imperfection in the answer. ----- Grepalife v. CA GREPALIFE V. CA 89 SCRA 543 Facts: > On March 14, 1957, respondent Ngo Hing filed an application with Grepalife for a 20-yr endowment policy for 50T on the life of his one year old daughter Helen Go. > All the essential data regarding Helen was supplied by Ngo to Lapu-Lapu Mondragon, the branch manager of Grepalife-Cebu. Mondragon then typed the data on the application form which was later signed by Ngo. > Ngo then paid the insurance premium and a binding deposit receipt was issued to him. The binding receipt contained the following provision: ―If the applicant shall not have been insurable xxx and the Company declines to approve the application, the insurance applied for shall not have been in force at any time and the sum paid shall be returned to the applicant upon the surrender of this receipt.‖ > Mondragon wrote on the bottom of the application form his strong recommendation for the approval of the insurance application. > On Apr 30, 1957, Mondragon received a letter from Grepalife Main office disapproving the insurance application of Ngo for the simple reason that the 20yr endowment plan is not available for minors below 7 yrs old. > Mondragon wrote back the main office again strongly ---------Ng Gan Zee v. Asian Crusader Life, 122 SCRA 461 NG GAN ZEE V. ASIAN CRUSADER LIFE - IMPERFECTION IN THE APPLICATION FORM 122 SCRA 61 Facts: > In 1962, Kwon Nam applied for a 20yr endowment insurance on his life with his wife, Ng Gan Zee as the beneficiary. > He stated in his application that he was operated on for tumor of the stomach associated with ulcer. > In 1963, Kwong died of cancer of the liver with metastasis. Asian refused to pay on the ground of alse information. > It was found that prior to his application, Kwong was diagnosed to have peptic ulcers, and that during the operation what was removed from Kwong’s body was actually a portion of the stomach and not tumor. Issue: Whether or not the contract may be rescinded on the ground of the imperfection in the application form. Held: NO. Kwong did not have sufficient knowledge as to distinguish between a tumor and a peptic ulcer. His statement recommending the approval of the endowment plan on the life of Helen, adding that Grepalife was the only insurance company NOT selling endowment plans to children. > On may 1957, Helen died of influenza with complication of broncho pneumonia. Ngo filed a claim with Gepalife, but the latter denied liability on the ground that there was no contract between the insurer and the insured and a binding receipt is NOT evidence of such contract. Issue: Whether or not the binding deposit receipt, constituted a temporary contract of life insurance. Held: NO. The binding receipt in question was merely an acknowledgement on behalf of the company, that the latter’s branch office had received from the applicant, the insurance premium and had accepted the application subject for processing by the insurance company, and that the latter will either approve or reject the same on the basis of whether or not the applicant is insurable on standard rates. Since Grepalife disapproved the insurance application of Ngo, the binding deposit receipt had never became on force at any time, pursuant to par. E of the said receipt. A binding receipt is manifestly merely conditional and does NOT insure outright. Where an agreement is made between the applicant and the agent, NO liability shall attach until the principal approves the risk and a receipt is given by the agent. The acceptance is merely conditional, and is subordinated to the act of the company in approving or rejecting the application. Thus in life insurance, a binding slip or binding receipt does NOT insure by itself. --------- Henson v. Philamlife, 56 OG 7328 HENSON V. PHILAMLIFE CONCEALMENT 56 OG 7328 Facts: - > Celestino Henson was insured by Philamlife in 1954 upon his application or a 20-yr endowment life policy. > In 1955, the policy lapsed due to non-payment of the premiums. > Upon payment of the premiums due, the policy was reinstated, but in the application for reinstatement, Henson did not disclose the fact that he had been previously diagnosed for pyelonephritis, enlarged liver and hernia. He also did not disclose that he had been examined by a physician. > In 1956, Henson died, and his beneficiaries’ claim was rejected by Philamlife on the ground of concealment. > The company then filed for rescission. Beneficiaries’ contend that the intent to conceal must be proven to warrant rescission. Issue: Whether or not there is need to prove intent to conceal to warrant rescission. Held: NO. Sec. 26 provides that ―a concealment whether intentional or unintentional entitles the injured party to rescind the contract of insurance‖. And aside from this, intent, being a state of the mind is hard to prove. According to Sec. 30 of the Insurance Code: Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. In essence therefore, the insured need not have died of the very diseases he had failed to reveal to the insurance company. It is sufficient that his non- revelation had misled the insurer in forming its estimate of the disadvantages of the proposed policy reinstatement or in making its inquiries, in order to entitle the latter to rescind the contract. > On Nov. 18, 1925, during the effectivity of the policy, Vicenta died of cerebral apoplexy. Thereafter, Bernardo claimed payment but was refused. > It is admitted that in the Medical Examiner’s report, Vicenta, in response to the question asked by the medical examiner, her replies were as follows: o ―How frequently do you use beer, wine, spirits and other intoxicants?‖ she answered ―beer only in small quantities‖. o ―What physician have you consulted or been treated by within the last 5 years and for what illness or ailment?‖ she answered ―none‖ > It is however, not disputed that in 1924, Vicenta was taken to a hospital for what was first diagnosed as alcoholism and later changed to manic-depressive psychosis and then again changed to pscyhonuerosis. Issue: Whether or not on the basis of the misrepresentations of Vicenta, Bernardo is barred from recovery. Held: YES. The court found that the representations made by Vicenta in his application for life insurance were false with respect to her state of health and that she knew and was aware that the representations so made by her were false. In an action on a life insurance policy where the evidence conclusively shows that the answers to questions concerning diseases were untrue, the truth or falsity of the answer becomes the determining factor. If the policy was procured by fraudulent misrepresentations, the contract of insurance apparently set forth therein was never legally existent. It can be fairly assumed that had the true facts been disclosed by the insured, the insurance would never have been granted. ----------- Yu Pang Cheng v. CA, 105 PHIL 1930 YU PANG CHENG V. CA- LIFE INSURANCE POLICY 105 PHIL 1930 Facts: > Yu Pang Eng obtained a life insurance policy naming his brother Yu Pang Cheng as beneficiary. > Eng subsequently died of medullary carcinoma, Grade 4, advanced and lesser curvature. > Cheng claims the proceeds of the policy. > Insurance co. refused payment on the ground that the policy was void due to the concealment. Issue: Whether or not the policy is void. Held: YES. In the application for the policy, Eng was asked whether he had been ill or had consulted a doctor due to symptoms or illnesses enumerated in the questionnaire. He answered ― No‖, when in fact he was hospitalized seven months prior to his application for the said policy. --------------- Argente v. West Coast Life Insurance Co., 51 PHIL 725 ARGENTE V. WEST COAST LIFE INSURANCE CO.- MISREPRESENTATION 51 PHIL 725 Facts: > A joint life insurance policy was issued to Bernardo Argente and his wife Vicenta upon payment of premium, by West Coast. ----------- Saturnino v. Philamlife7 SCRA 316 SATURNINO V. PHILAMLIFE FALSE REPRESENTATION 7 SCRA 316 influence of the facts upon the party to whom the communication is due, in forming his estimate of the proposed contract, or making his inquiries. Facts: > 2 months prior to the insurance of the policy, Saturnino was operated on for cancer, involving complete removal of the right breast, including the pectoral muscles and the glands, found in the right armpit. > Notwithstanding the fact of her operation, Saturnino did not make a disclosure thereof in her application for insurance. > She stated therein that she did not have, nor had she ever had, among others listed in the application, cancer or other tumors; that she had not consulted any physician, undergone any operation or suffered any injury within the preceding 5 years. > She also stated that she had never been treated for, nor did she ever have any illness or disease peculiar to her sex, particularly of the breast, ovaries, uterus and menstrual disorders. > The application also recited that the declarations of Saturnino constituted a further basis for the issuance of the policy. Issue: Whether or not the insured made such false representation of material facts as to avoid the policy. Held: YES. There can be no dispute that the information given by her in the application for insurance was false, namely, that she never had cancer or tumors or consulted any physician or undergone any operation within the preceding period of 5 years. The question to determine is: Are the facts then falsely represented material? The Insurance Law provides that ―materiality is to be determined not by the event, but solely by the probable and reasonable The contention of appellants is that the facts subject of the representation were not material in view of the non-medical nature of the insurance applied for, which does away with the usual requirement of medical examination before the policy is issued. The contention is without merit. If anything, the waiver of medical examination renders even more material the information required of the applicant concerning previous condition of health and diseases suffered, for such information necessarily constitutes an important factor which the insurer takes into consideration in deciding whether to issue the policy or not. Appellants also contend that there was no fraudulent concealment of the truth inasmuch as the insured herself did not know, since her doctor never told her, that the disease for which she had been operated on was cancer. In the first place, concealment of the fact of the operation itself was fraudulent, as there could not have been any mistake about it, no matter what the ailment. Secondly, in order to avoid a policy, it is not necessary to show actual fraud on the part of the insured. In this jurisdiction, concealment, whether intentional or unintentional entitled the insurer to rescind the contract of insurance, concealment being defined as ―negligence to communicate that which a party knows and ought to communicate.‖ The basis of the rule vitiating the contract in cases of concealment is that it misleads or deceives the insurer into accepting the risk, or accepting it at a rate of premium agreed upon. The insurer, relying upon the belief that the insured will disclose every material fact within his actual or presumed knowledge, is misled into a belief that the circumstances withheld does not exist, and he is thereby induced to estimate the risk upon a false basis that it does not exist. Edillon vs. Manila Bankers Life Insurance Corporation [G.R. No. L-34200, 117 SCRA 187, September 30, 1982] Post under case digests, Commercial Law at Saturday, March 03, 2012 Posted by Schizophrenic Mind Facts: Sometime in April 1969, Carmen O, Lapuz applied Manila Bankers for insurance coverage against accident and injuries. She filled up the blank application form given to her and filed the same with the respondent insurance corporation. In the said application form she gave the date of her birth as July 11, 1904. On the same date, she paid the sum of P20.00 representing the premium for which she was issued the corresponding receipt signed by an authorized agent of Manila Bankers. Upon the filing and the payment of the premium, the respondent insurance corporation issued to Carmen O. Lapuz its Certificate of Insurance. The policy was to be effective for a period of 90 days. During the effectivity of the certificate of insurance Carmen Lapuz died on a vehicular accident in the North Diversion Road. On June 7, 1969, petitioner Regina L. Edillon, a sister of the insured and who was the named beneficiary in the policy, filed her claim for the proceeds of the insurance, submitting all the necessary papers and other requisites. However, her claim was denied by the respondent corporation hence her filing of complaint in the Court of First Instance of Rizal on August 27, 1969. The respondent insurance corporation asserts that since Carmen Lapuz was over 60 years of age the policy in question was null and void because there is a provision in the certificate of insurance excluding its liability to pay claims under the policy in behalf of persons who are under the age of sixteen (16) years of age or over the age of sixty (60) years. The trial court dismissed the complaint. Hence, this petition. Issue: Whether or not the acceptance by the private respondent insurance corporation of the premium and the issuance of the corresponding certificate of insurance should be deemed a waiver of the exclusionary condition of overage stated in the said certificate of insurance Held: Yes. The age of the insured Carmen 0. Lapuz was not concealed to the insurance company. Her application for insurance coverage which was on a printed form furnished by private respondent and which contained very few items of information clearly indicated her age of the time of filing the same to be almost 65 years of age. Despite such information which could hardly be overlooked in the application form, considering its prominence thereon and its materiality to the coverage applied for, the respondent insurance corporation received her payment of premium and issued the corresponding certificate of insurance without question. The accident which resulted in the death of the insured, a risk covered by the policy, occurred on May 31, 1969 or FORTY-FIVE (45) DAYS after the insurance coverage was applied for. There was sufficient time for the private respondent to process the application and to notice that the applicant was over 60 years of age and thereby cancel the policy on that ground if it was minded to do so. If the private respondent 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, the insurance corporation is already deemed in estoppel. Its inaction to revoke the policy despite a departure from the exclusionary condition contained in the said policy constituted a waiver of such condition. > In its letter, Sun Life informed Berarda, that the insured did not disclosed material facts relevant to the issuance of the policy, thus rendering the contract of insurance voidable. A check representing the total premiums paid in the amount of P10,172.00 was attached to said letter. > Bernarda and her husband, filed an action for specific performance against Sun Life. RTC ruled for Bernarda holding that the facts concealed by the insured were made in good faith and under the belief that they need not be disclosed. Moreover, it held that the health history of the insured was immaterial since the insurance policy was "non-medical." CA affirmed. Issue: Whether or not the beneficiary can claim despite the concealment. SUN LIFE V. CA - CONCEALMENT IN INSURANCE 245 SCRA 268 (1995) Facts: > On April 15, 1986, Bacani procured a life insurance contract for himself from Sun Life. He was issued a life insurance policy with double indemnity in case of accidental death. The designated beneficiary was his mother, Bernarda. > On June 26, 1987, the insured died in a plane crash. Bernarda Bacani filed a claim with Sun Life, seeking the benefits of the insurance. Sun Life conducted an investigation and its findings prompted it to reject the claim. > Sun Life discovered that 2 weeks prior to his application, Bacani was examined and confined at the Lung Center of the Philippines, where he was diagnosed for renal failure. During his confinement, the deceased was subjected to urinalysis, ultrasonography and hematology tests. He did not reveal such fact in his application. Held: NOPE. Section 26 of the Insurance Code is explicit in requiring a party to a contract of insurance to communicate to the other, in good faith, all facts within his knowledge which are material to the contract and as to which he makes no warranty, and which the other has no means of ascertaining. Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom communication is due, in forming his estimate of the disadvantages of the proposed contract or in making his inquiries (The Insurance Code, Sec 31) The terms of the contract are clear. The insured is specifically required to disclose to the insurer matters relating to his health. The information which the insured failed to disclose were material and relevant to the approval and the issuance of the insurance policy. The matters concealed would have definitely affected petitioner's action on his application, either by approving it with the corresponding adjustment for a higher premium or rejecting the same. Moreover, a disclosure may have warranted a medical examination of the insured by petitioner in order for it to reasonably assess the risk involved in accepting the application. aware of the true medical condition of Feliciano yet they still made it appear that he was healthy in the insurance application form; that Feliciano signed the application in blank and the agent filled the information for him. ISSUE: Whether or not Insular Life can avoid the insurance policy by reason of the fact that its agent knowingly and intentionally wrote down the answers in the application differing from those made by Feliciano hence instead of serving the interests of his principal, acts in his own or another’s interest and adversely to that of his principal, the said principal is not bound by said acts of the agent. HELD: No. Insular Life must pay the insurance policy. The weight of authority is that if an agent of the insurer, after obtaining from an applicant for insurance a correct and truthful answer to interrogatories contained 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 answers as a defense to liability on the policy, and this is true generally without regard to the subject matter of the answers or the nature of the agent’s duties or limitations on his authority, at least if not brought to the attention of the applicant. Thus, "good faith" is no defense in concealment. The insured's failure to disclose the fact that he was hospitalized for two weeks prior to filing his application for insurance, raises grave doubts about his bonafides. It appears that such concealment was deliberate on his part. Insular Life Assurance vs Feliciano (1941) Insurance Law – Representation Insurance Agent’s Fraud – FACTS: Evaristo Feliciano was issued an insurance policy by Insular Life. In September 1935, he died. His heirs filed an insurance claim but Insular Life denied the application as it averred that Feliciano’s application was attended by fraud. It was later found in court that the insurance agent and the medical examiner of Insular Life who assisted Feliciano in signing the application knew that Feliciano was already suffering from tuberculosis; that they were The fact that the insured did not read the application which he signed, is not indicative of bad faith. It has been held that it is not negligence for the insured to sign an application without first reading it if the insurer by its conduct in appointing the agent influenced the insured to place trust and confidence in the agent. NG GAN ZEE V. ASIAN CRUSADER LIFE IMPERFECTION IN THE APPLICATION FORM 122 SCRA 61 Facts: > In 1962, Kwon Nam applied for a 20yr endowment insurance on his life with his wife, Ng Gan Zee as the beneficiary. > He stated in his application that he was operated on for tumor of the stomach associated with ulcer. > In 1963, Kwong died of cancer of the liver with metastasis. Asian refused to pay on the ground of alse information. > It was found that prior to his application, Kwong was diagnosed to have peptic ulcers, and that during the operation what was removed from Kwong’s body was actually a portion of the stomach and not tumor. imperfectly answered. Asian’s failure to inquire constituted a waiver of the imperfection in the answer. G.R. No. L-47593 December 29, 1943 THE INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. SERAFIN D. respondents. FELICIANO ET AL., Issue: Whether or not the contract may be rescinded on the ground of the imperfection in the application form. FACTS: Evaristo Feliciano, who died on September 29, 1935, was suffering with advanced pulmonary tuberculosis when he signed his applications for insurance with the petitioner on October 12, 1934. On that same date Doctor Trepp, who had taken Xray pictures of his lungs, informed the respondent Dr. Serafin D. Feliciano, brother of Evaristo, that the latter "was already in a very serious ad practically hopeless condition." Nevertheless the question contained in the application — "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 signature of the applicant. . The false answer above referred to, as well as the others, was written by the Company's soliciting agent Romulo M. David, in collusion with the medical examiner Dr. Gregorio Valdez, for the purpose of securing the Company's approval of the application so that the policy to be issued thereon might be credited to said agent. Agent David bribed Medical Examiner Valdez with money which the former Held: NO. Kwong did not have sufficient knowledge as to distinguish between a tumor and a peptic ulcer. His statement therefore was made in good faith. Asian should have made an inquiry as to the illness and operation of Kwong when it appeared on the face of the application that a question appeared to be borrowed from the applicant's mother by way of advanced payment on the premium. Before the insured signed the application he, as well as the members of his family, told the agent and the medical examiner that he had been sick and coughing for some time and that he had gone three times to the Santol Sanatorium and had X-ray pictures of his lungs taken; but that in spite of such information the agent and the medical examiner told them that the applicant was a fit subject for insurance. ISSUE: Whether or not 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. but then and there applied for and later accepted another policy of P5,000. HELD: Yes. 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 another 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 he first premium has been paid and the policy as 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 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 notice 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 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 . . ." By accepting the policy he became charged with knowledge of its contents, whether he actually read it or not. He could not ostrichlike hide his head from it in order to avoid his part of the bargain and at the same time claim the benefit thereof. 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 soliciting 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. 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 tuberculosis.