Henson v. Philamlife - Concealment

56 OG 7328

Facts:

>  Celestino Henson was insured by Philamlife in 1954 upon his application or a 20-yr endowment life policy.

>  In 1955, the policy lapsed due to non-payment of the premiums.

>  Upon payment of the premiums due, the policy was reinstated, but in the application for reinstatement, Henson did not disclose the fact that he had been previously diagnosed for pyelonephritis, enlarged liver and hernia.  He also did not disclose that he had been examined by a physician.

>  In 1956, Henson died, and his beneficiaries’ claim was rejected by Philamlife on the ground of concealment.

>  The company then filed for rescission.  Beneficiaries’ contend that the intent to conceal must be proven to warrant rescission.

Issue:

Whether or not there is need to prove intent to conceal to warrant rescission.

Held:

NO.

Sec. 26 provides that “a concealment whether intentional or unintentional entitles the injured party to rescind the contract of insurance”.  And aside from this, intent, being a state of the mind is hard to prove.

According to Sec. 30 of the Insurance Code:  Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his estimate of the disadvantages of the proposed contract, or in making his inquiries. In essence therefore, the insured need not have died of the very diseases he had failed to reveal to the insurance company.  It is sufficient that his non-revelation had misled the insurer in forming its estimate of the disadvantages of the proposed policy reinstatement or in making its inquiries, in order to entitle the latter to rescind the contract.