Vda de Sindayen v Insular (1935)

Ponente: Butte
Petitioner: Fortunata Lucero VIuda de Sindayen
Respondent: Insular Life Assurance Co., Ltd.

Under what topic: Perfection of the Contract of Insurance Offer acceptance;
consensuality DELIVERY OF POLICY

Synopsis: Petitioners deceased husband, Sindayen, applied for a policy of life insurance on
his life. The same was accepted and the respondent insurer issued the policy. As per
instruction of Sindayen, the policy was delivered to his agent; however, the Sindayen died a
day after the delivery. Insurance company asked Sindayens agent to return the policy. This
action was then brought to enforce the payment of the policy. The Court decided in favor of
the petitioner.

Doctrine: Having decided that all the conditions precedent to the taking effect of the policy
had been complied with and having accepted the premium and delivered the policy
thereafter to the insured, it is now estopped to assert that it never intended that the policy
should take effect.
Facts:
Arturo Sindayen (Sindayen), a linotype operator in the Bureau of Printing at Manila,
and his wife went to Camiling, Tarlac to spend Christmas with his aunt, Felicidad
Estrada (Estrada).
Dec. 26, 1932- Sindayen applied for an insurance policy
o Sindayen made a written application to Insular Life Assurance Co., Ltd.
(Insular), through its agent, Cristobal Mendoza (Mendoza), for a policy of
insurance on his life in the sum of P1000.
o Sindayen paid part of the premium, amounting to P15, to Mendoza. It was
agreed upon that the policy should be delivered to Estrada.
o Sindayen left P26.06 to his aunt to complete the payment of the first annual
premium of P40.06 to be given at the delivery.
Jan. 1, 1933- Sindayen, who was 29 years old, was examined by a doctor who made a
favorable report.
Jan. 11, 1933- Insular accepted the risk and issued the policy, dated Dec. 1, 1932, and
mailed it to Mendoza for delivery.
Jan. 12, 1933- Sindayen got sick



o Sindayen complained of a severe headache. He called a doctor a few days
after who found that he was suffering from acute nephritis and uremia. He
was not treated for his illness.
Jan. 18, 1933- Delivery of the policy
o Mendoza delivered the policy to Estrada upon her payment of the remaining
balance.
o Mendoza asked Estrada if her nephew was in good health and she replied that
she believed so because she had no information that she was sick.
Jan. 19, 1933- Sindayen died
Jan. 20, 1933- Mendoza found out about Sindayens death
o He called Estrada to return the policy
o Estrada returned it but Mendoza did not return of offer to return the premium
paid
Feb. 4, 1933- Insular obtained from the widow of Sindayen her signature to a legal
document entitled, ACCORD, SATISFACTION, AND RELEASE which stipulated:
o Whereby in consideration of the sum of P40.06 paid to her by a check of the
company, she "assigns, releases and forever discharges said Insular...
Check was never cashed but was returned to the company.
Thereupon, this action was brought to enforce payment of the policy.
Issue/s:
1. WON there was delivery despite the fact that the policy was not delivered to and
accepted by the insured in person

2. WON the Sindayens bad health at the time of the delivery (re: paragraph 3 of the
application)
1
rendered the policy void.

Held-Ratio:
1. Yes, the delivery was made.
Delivery to the insured is not necessary and may be made by mail of to a duly
constituted agent.
2. No, the policy remains enforceable.

1
The application which the insured signed in Camiling, Tarlac, on December 26, 1932, contained among others the following
provisions:
2. That if this application is accepted and a policy issued in my favor, I bind myself to accept the same and to pay at least the
first year's premium thereon in the City of Manila.
3. That the said policy shall not take effect until the first premium has been paid and the policy has been
delivered to and accepted by me, while I am in good health.
4. That the agent taking this application has no authority to make, modify or discharge contracts, or to waive any of the
Company's right or requirements.".




The act of delivery of the policy in the absence of fraud or other ground for
rescission consummates the insurance. Insular having decided that all the
conditions precedent to the taking effect of the policy had been complied
with and having accepted the premium and delivered the policy thereafter to
the insured, it is now estopped to assert that it never intended that the policy
should take effect.
o Mendoza was authorized by the company to make the delivery of the
policy when he received the payment of the first premium and he was
satisfied that the insured was in good health.
o Mendoza's decision is just as binding on the company as if the decision
had been made by its board of directors.

Dispositive:
We hold that the defendant company assumed the risk covered by policy No. 47710 on the
life of Arturo Sindayen on January 18, 1933, the date when the policy was delivered to the
insured. The judgment appealed from is therefore reversed with directions to enter
judgment against the appellee in the sum of P1,000 together with interest at the legal rate
from and after May 4, 1933, with costs in both instances against the appellee.

Digesters notes: (other info)
It is the interest not only the applicant but of all insurance companies as well that
there should be some act which gives the applicant the definite assurance that the
contract has been consummated.
When the policy is issued and delivered, in the absence of fraud or other grounds for
rescission, it is plainly not within the intention of the parties that there should be any
questions held in abeyance or reserved for future determination that leave the very
existence of the contract in suspense and doubt. If this were not so, the entire
business world which deals so voluminously in insurance would be affected by this
uncertainly.
The fact that the agent to whom it has entrusted this duty (and corporation can only
act through agents) is derelict or negligent or even dishonest in the performance of
the duty which has been entrusted to him would create a liability of the agent to the
company but does not resolve the company's obligation based upon the authorized
acts of the agent toward a third party who was not in collusion with the agent.