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Yu Pang Cheng v. CA (1959)

The petitioner sued an insurance company to collect the policy proceeds after his brother, the insured, died. The insurance company denied the claim, arguing the insured concealed material facts in his application. Specifically, the insured did not disclose that he received treatment for dizziness, anemia, abdominal pains and tarry stools at a hospital before applying for insurance. The court ruled in favor of the insurance company, finding the insured was guilty of concealment by not disclosing his prior illness, which was material to the risk being insured. Had the insurer known of the insured's medical history, it likely would not have approved the application or issued the policy.

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415 views1 page

Yu Pang Cheng v. CA (1959)

The petitioner sued an insurance company to collect the policy proceeds after his brother, the insured, died. The insurance company denied the claim, arguing the insured concealed material facts in his application. Specifically, the insured did not disclose that he received treatment for dizziness, anemia, abdominal pains and tarry stools at a hospital before applying for insurance. The court ruled in favor of the insurance company, finding the insured was guilty of concealment by not disclosing his prior illness, which was material to the risk being insured. Had the insurer known of the insured's medical history, it likely would not have approved the application or issued the policy.

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Nap Gonzales
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YU PANG CHENG, petitioner, vs. THE COURT OF APPEALS, ET AL., respondents.

G.R. L-12465, May 29, 1959



Note: Walang sinabi sa case kung ano yung insurance company. -_-

FACTS:
- On September 1950, Yu Pang Eng submitted his application for insurance to an insurance company. He
answered no to questions on his medical history (stomach diseases, dizziness, ulcers, vertigo, cancer, tumors,
etc.) as well as to the question of WON he consulted any physician regarding said diseases. Upon payment of the
first premium, the company issued to him an insurance policy. On December 1950, he went to St. Lukes for
medical treatment but he died two months later. According to the death certificate, he died of infiltrating medullary
carcinoma, Grade 4, advanced cardiac and of lesser curvature, stomach metastases spleen.
- His brother and beneficiary, Yu Pang Cheng [petitioner], demanded from the insurance company the payment of
the policy proceeds [10k], but his demand was refused so he brought the present action. The insurance
companys defense was that the insured was guilty of misrepresentation and concealment of material facts in that
he gave false and untruthful answers to questions asked him in his application; hence, the effect is the avoiding of
the policy.
- It appears that the insured entered the Chinese General Hospital for medical treatment on January 1950 [before
application for insurance policy], complaining of dizziness, anemia, abdominal pains and tarry stools. His illness
history shows that this started a year ago as frequent dizziness. An x-ray picture of his stomach and the diagnosis
was that he suffered from peptic ulcer, bleeding

ISSUE:
- Whether or not the insured is guilty of concealment of some facts material to the risk insured that consequently
avoids the policy.

HELD:
- YES. Petition dismissed.
- The first confinement took place from January 29, 1950 to February 11, while his application was submitted on
September 5, 1950. When he gave his answers to the policy, he concealed the ailment of which he was treated in
the hospital.
- The negative answers given by the insured regarding his previous ailment deprived defendant of the opportunity
to make the necessary inquiry as to the nature of his past illness so that as it may form its estimate relative to the
approval of his application. Had defendant been given such opportunity, the company would probably had never
consented to the issuance of the policy in question. In fact, according to the death certificate, the insureds death
may have direct connection with his previous illness.
- Concealment is a neglect to communicate that which a party knows and ought to communicate. Whether
intentional or not, concealment entitles the insurer to rescind the contract. The law requires the insured to
communicate to the insurer all facts within his knowledge which are material to the contract and which the other
party has not the means of ascertaining. The materiality is determined not by the event but by the probable and
reasonable influence of the facts upon the party to whom the communication is due.
- As held in Argente vs. West Coast- One ground for the rescission of a contract of insurance under the insurance
Act is "a concealment", which in section 25 is defined "A neglect to communicate that which a party knows and
ought to communicate."
- 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 answers become the determining factor. If the policy
was procured by fraudulent representations, the contract of insurance was never legally existent. It can fairly be
assumed that had the true facts been disclosed by the assured, the insurance would never have been granted.

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