RAFAEL ENRIQUEZ, as administrator of the estate of the late Joaquin Ma. Herrer, plaintiff-appellant, vs. SUN LIFE ASSURANCE COMPANY OF CANADA, defendant-appellee; G.R. No. L-15895 November 29, 1920

TOPIC: Article 18. In matters which are governed by the Code of Commerce and special laws, their deficiency shall be supplied by the provisions of this Code.

RATIONALE:

FACTS:

1. Action to recover P6,000 from Sun Life Assurance Co. paid by the deceased for a life annuity.

2. (1917)

September 24: Joaquin Herrer applied to un Life Assurance Company of Canada (Manila Office)  for a life annuity and paid P6,000.00 2 days later. 

November 26:   the head office gave notice of acceptance by cable to Manila (Whether on the same day the cable was received notice was sent by the Manila office of Herrer that the application had been accepted, is a disputed point, which will be discussed later.)

December 4: the policy was issued at Montreal.

December 18: wrote to the Manila office of the company stating that Herrer desired to withdraw his application. 

December 19: the local office replied to Mr. Torres, stating that the policy had been issued, and called attention to the notification of November 26, 1917. 

December 20: Mr. Herrer died.

December 21: Said letter was received by Mr. Torres in the morning.

ISSUE:

Whether Herrer received notice of acceptance of his application

RULING:

NO. Herrer didn't receive notice of acceptance of his application.

While the Insurance Act deals with life insurance, it is silent as to the methods to be followed in order that there may be a contract of insurance.

Article 16 of the Civil Code provides that "In matters which are governed by special laws, any deficiency of the latter shall be supplied by the provisions of this Code.

Article 1262 of the Civil Code provides that "Consent is shown by the concurrence of offer and acceptance with respect to the thing and the consideration which are to constitute the contract. An acceptance made by letter shall not bind the person making the offer except from the time it came to his knowledge. The contract, in such case, is presumed to have been entered into at the place where the offer was made." This latter article is in opposition to the provisions of article 54 of the Code of Commerce

The law applicable to the case is found to be the second paragraph of article 1262 of the Civil Code providing that an acceptance made by letter shall not bind the person making the offer except from the time it came to his knowledge. The pertinent fact is, that according to the provisional receipt, three things had to be accomplished by the insurance company before there was a contract:

(1) There had to be a medical examination of the applicant;

(2) there had to be approval of the application by the head office of the company; and

(3) this approval had in some way to be communicated by the company to the applicant. 

In the case at bar, the head office in Montreal did accept the application, did cable the Manila office to that effect, did actually issue the policy and did, through its agent in Manila, actually write the letter of notification and place it in the usual channels for transmission to the addressee. Rafael Enriquez, the administrator of the estate, testified that he had gone through the effects of the deceased and had found no letter of notification from the insurance company to Mr. Herrer.

The letter of November 26, 1917, notifying Mr. Herrer that his application had been accepted, was prepared and signed in the local office of the insurance company, was placed in the ordinary channels for transmission, but as far as we know, was never actually mailed and thus was never received by the applicant.

American courts held that when a letter or other mail matter is addressed and mailed with postage prepaid, there is a rebuttable presumption of fact that it was received by the addressee as soon as it could have been transmitted to him in the ordinary course of the mails. But if any one of these elemental facts fails to appear, it is fatal to the presumption. For instance, a letter will not be presumed to have been received by the addressee unless it is shown that it was deposited in the post-office, properly addressed and stamped.  . (See 22 C.J., 96, and 49 L. R. A. [N. S.], pp. 458, et seq., notes.)

Thus, the contract for a life annuity in the case at bar was not perfected because it has not been proved satisfactorily that the acceptance of the application ever came to the knowledge of the applicant.

Judgment is reversed, and the plaintiff shall have and recover from the defendant the sum of P6,000 with legal interest from November 20, 1918, until paid, without special finding as to costs in either instance.