Philamcare (PHSI) v.
CA and Julita Trinos (2002)  asked for reimbursement of expenses plus
 
Ynares-Santiago, ​J.
I. Facts:   medical and hospital coverage.
● Ernani Trinos (husband of the respondent)
applied for health care coverage with PHSI
(Philamcare Health Systems Inc.). In the
question “have you or any of your family  
members ever been treated for high blood
pressure, heart trouble, diabetes, cancer,
liver disease, asthma or peptic ulcer? (If Yes,
give details)”, he answered NO.
● Application was approved for 1 year and in
the agreement, he was entitled to avail of
hospitalization benefits (ordinary or
emergency), out-patient benefits, preventive
health care and other out-patient services.  
● The agreement was extended for another
year upon termination and the amount of
coverage was increased to a max sum of
75k per disability.
● During the period of coverage, Ernani
suffered a heart attack and was confined at
Manila Medical Center for a month. Julita
tried to claim the benefits covered by the
healthcare agreement but PHSI denied her
claim saying that the agreement was void
because of “concealment” regarding Ernani’s
medical history. Allegedly, at the time of the
confinement, the doctors at the hospital
discovered that he was hypertensive,
diabetic, asthmatic--contrary to his answer in
the application form. Respondent paid for the
hospitalization herself.
● Ernani was discharged but then hospitalized
again at Chinese General Hospital, but
because of financial difficulties, Julita took
him home. Shortly, Ernani was brought back
to CGH, but he died the same day.
● July 24, 1990 - respondent filed an action for
damages against petitioner and its president
(Dr. Benito Reverente) with the RTC. She
moral damages and attorneys fees.
● RTC: ​Ruled against the petitioners and
ordered them to pay and reimburse the
● CA: ​RTC decision affirmed but deleted all
awards for damages and absolved the
petitioner, Reverente.
II. Issue:  
● W/N a healthcare agreement is not an
insurance contract and, hence, the
“incontestability clause” under the Insurance
code does not apply. ​NO, a healthcare 
agreement is in the nature of a non-life 
insurance which is primarily a contract of 
indemnity. 
III. Rationale: 
● Section 2 (1) of the Insurance code defines a
contract of insurance as an ​agreement
whereby one undertakes for a
consideration to indemnify another
against loss, damage or liability arising
from an unknown or contingent event.
● The following are the elements of an
insurance contract:
○ The insured has an insurable
interest;
○ The insured is subject to a risk of
loss by the happening of the
designated peril;
○ The insurer assumes the risk;
○ Such assumption of risk is part of a
general scheme to distribute actual
losses among a large group of
persons bearing a similar risk; and
○ In consideration of insurers
promise, the insured pays a
premium.
● In the case at bar, the insurable interest of
respondents husband in obtaining the health
care agreement was his own health. The
 health care agreement was in the nature of membership of the patient and this period
non-life insurance, which is primarily a has already expired.
contract of indemnity. Once the member
incurs hospital, medical or any other IV. Dispositive: ​WHEREFORE, the petition is
expense arising from sickness, injury or DENIED. The assailed decision of the CA is
other stipulated contingent, the health care AFFIRMED.
provider must pay for the same to the extent
agreed upon under the contract.
● As to Ernani’s answer to the question about
his medical history, the SC says that this
depended largely on the opinion of Ernani
rather than fact. What matters here is his
good faith when he answered the form. It is
upon the insurer to prove that there is
fraudulent intent on the part of the insured in
order to warrant recission of the insurance
contract.
● Moreover, no rescission was actually made
in this case. Also, the cancellation of health
care agreements as insurance policies
require the concurrence of the ff conditions:
○ Prior notice of cancellation to
insured;
○ Notice must be based on the
occurrence after effective date of
the policy of one or more of the
grounds mentioned;
○ Must be in writing, mailed or
delivered to the insured at the
address shown in the policy;
○ Must state the grounds relied upon
provided in Section 64 of the
Insurance Code and upon request
of insured, to furnish facts on which
cancellation is based.
● None of these were fulfilled. SC said that
insurance contracts being contracts of
adhesion, the terms are to be construed
strictly against the party which prepared the
contract.
● As to the incontestability, RTC said that
PHSI had 12 months to contest the