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Yu Pang Cheng vs. CA

1) Yu Pang Cheng submitted an application for life insurance and paid the first premium, receiving a policy from the insurer (CA). 2) Cheng later died of stomach cancer and his brother (the beneficiary) demanded the insurance payout, which was refused by CA on grounds of misrepresentation. 3) The court ruled in favor of CA, finding that Cheng had concealed material facts by not disclosing a prior hospitalization for peptic ulcer and related symptoms, which would have influenced CA's decision to issue the policy.

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69 views1 page

Yu Pang Cheng vs. CA

1) Yu Pang Cheng submitted an application for life insurance and paid the first premium, receiving a policy from the insurer (CA). 2) Cheng later died of stomach cancer and his brother (the beneficiary) demanded the insurance payout, which was refused by CA on grounds of misrepresentation. 3) The court ruled in favor of CA, finding that Cheng had concealed material facts by not disclosing a prior hospitalization for peptic ulcer and related symptoms, which would have influenced CA's decision to issue the policy.

Uploaded by

John Mark Revilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Yu Pang Cheng vs.

CA
G.R. No. L-12465
May 29, 1959

Facts

Yu Pang Eng submitted parts II and III of his application for insurance consisting if
the medical declaration made by him to the medical examiner of defendant and the
medical examiner’s report. Afterwards, he submitted part I of his application which
is the declaration made by him to an agent of defendant. Upon payment of the first
premium, defendant issued to the insured the policy.

The insured entered St. Luke’s Hospital for medical treatment but died two months
later. According to the death certificate, he died of "infitrating medullary carcinoma,
Grade 4, advanced catdiac and of lesser curvature, stomach metastases spleen."
Petitioner, brother and beneficiary of the insured, demanded from respondent the
payment of the proceeds of the insurance policy and when the demand was refused
on the ground of misrepresentation and concealment of material facts.

Issue & Ruling

Whether or not the insured is guilty of concealment of material facts which should
have been disclosed to the insurer

Yes. Our Insurance Code provides that a neglect to communicate that which a party
knows and ought to communicate, is called concealment which entitles the insurer
to rescind the contract of insurance. The Insurance Code even 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.

In this case, the insured gave his answers regarding his previous ailment, particularly
with regard to "Gaztritis, Ulcer of the Stomach or any disease of that organ" and
"Vertigo, Dizziness, Fainting-spells or Unconsciousness", he concealed the ailment
of which he was treated in the Chinese General Hospital. The negative answers given
by the insured regarding his previous ailment, or his concealment of the fact that he
was hospitalized and treated for some time of peptic ulcer and had suffered from
"dizziness, anemia, abdominal pains and tarry stools", deprived defendant of the
opportunity to make the necessary inquiry as to the nature of his past illness so that
it may form its estimate relative to the approval of his application.

Had defendant been given such opportunity, considering the previous illness of the
insured as disclosed by the records of the Chinese General Hospital, defendant
would probably had never consented to the issuance of the policy in question. In
fact, according to the death certificate, the insured died of "infiltrating medullary
carcinoma, Grade 4, advanced cardiac and of lesser curvature, stomach metastases
spleen", which may have a direct connection with his previous illness.

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