Manulife Philippines v. Ybañez
REITERATIONFacts
The Antecedents: Manulife Philippines, Inc. (Manulife) filed a Complaint for Rescission of Insurance Contracts against Hermenegilda Ybañez and BPI Family Savings Bank. Manulife alleged that two insurance policies issued in favor of Dr. Gumersindo Solidum Ybañez (insured), with Hermenegilda as revocable beneficiary, were void due to concealment or misrepresentation of material facts in the applications. The insured died on November 17, 2003, less than two years after the policies were issued. Hermenegilda filed a death claim, but Manulife denied it, refunding the premiums. Manulife claimed the insured misrepresented his medical history, citing confinement for parotidectomy due to a tumor, history of hypertension, diagnosis of leptospirosis, and confinement for acute pancreatitis. Procedural History: The Regional Trial Court (RTC) dismissed Manulife's complaint for insufficiency of evidence, ordering Manulife to pay Hermenegilda actual expenses and attorney's fees. The RTC found that Manulife failed to prove the alleged misrepresentation or concealment, noting that its sole witness did not provide first-hand evidence and that the medical records were inadmissible hearsay. The Court of Appeals (CA) affirmed the RTC's decision, reiterating that misrepresentation or concealment is an affirmative defense that the insurer must prove with convincing evidence. The CA also found the medical records inadmissible due to lack of authentication. Manulife's motion for reconsideration was denied, leading to the present petition. The Petition: Manulife sought review of the CA's decision, arguing that the CA committed reversible error in affirming the RTC's dismissal of its complaint for rescission due to failure to prove concealment.
Issue(s)
Whether the Court of Appeals committed any reversible error in affirming the RTC Decision dismissing Manulife's Complaint for rescission of insurance contracts for failure to prove concealment on the part of the insured. Whether Manulife sufficiently proved the alleged concealment or misrepresentation of material facts by the insured to warrant rescission of the insurance policies.
Ruling
The Petition is DENIED. The assailed Decision of the Court of Appeals dated April 26, 2012 and its December 10, 2012 Resolution are AFFIRMED.
Ratio Decidendi
On the issue of whether the CA committed reversible error in affirming the RTC Decision dismissing Manulife's Complaint for rescission of insurance contracts for failure to prove concealment on the part of the insured: The Supreme Court held that it is horn-book law that in an appeal by certiorari under Rule 45, the findings of fact by the CA, especially when they affirm the findings of the RTC, are conclusive upon the Court. The Supreme Court does not re-examine evidence unless exceptions apply, none of which were present in this case. Therefore, the Court must defer to the findings of fact of the RTC, as affirmed by the CA, that Manulife's complaint for rescission was bereft of factual and legal bases because it failed to prove the alleged misrepresentation or concealment by the insured. The RTC correctly ruled that the medical records were inadmissible hearsay due to the failure to present the physician or a responsible official from the hospital to attest to their authenticity and due execution. Manulife failed to prove by convincing evidence that it was deceived into issuing the policies to an unhealthy individual. The Court emphasized that the fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the contract, and misrepresentation as a defense is an affirmative defense that the insurer must prove with satisfactory and convincing evidence. For failure to prove intent to defraud, Manulife could not validly sue for rescission. On the issue of whether Manulife sufficiently proved the alleged concealment or misrepresentation of material facts by the insured to warrant rescission of the insurance policies: The Supreme Court affirmed the findings of the lower courts that Manulife failed to discharge its burden of proof. The Court reiterated that misrepresentation or concealment in insurance is an affirmative defense that the insurer must establish by convincing evidence. Manulife's sole witness, Ms. Victoriano, merely identified documentary exhibits but did not testify on the circumstances of their execution or their contents. The RTC correctly found the medical records inadmissible as hearsay because the physicians or responsible officials of the hospital were not presented to authenticate them. Furthermore, Manulife's own company physician, Dr. Lumapas, had noted the insured's scar from a previous operation and categorized his health as "below average" in the Medical Evidence Exam (MEE). This indicated that Manulife had ample opportunity to inquire further into the insured's medical history but opted not to. The Court stressed that the mere mechanical act of identifying documentary exhibits, without the testimonies of the actual participating parties, adds nothing to validate or explain the documents. The insurer's claim that the insured misrepresented or concealed material facts was not substantiated by satisfactory and convincing evidence, thus preventing rescission of the insurance contracts.
Main Doctrine
An insurer seeking to rescind an insurance contract based on concealment or misrepresentation must prove the same by convincing evidence. The burden of proof rests upon the insurer, and the defense of concealment or misrepresentation is an affirmative defense that must be established satisfactorily. Hearsay evidence, such as unauthenticated medical records, lacks probative value.