G.R.No.L15895November29,1920

RAFAELENRIQUEZ,asadministratoroftheestateofthelateJoaquinMa.Herrer,plaintiffappellant,vs.SUNLIFEASSURANCECOMPANYOFCANADA,defendantappellee.

JoseA.Espirituforappellant.Cohn,FisherandDeWittforappellee.

MALCOLM,J.:

ThisisanactionbroughtbytheplaintiffadadministratoroftheestateofthelateJoaquinMa.Herrertorecoverfromthedefendantlifeinsurancecompanythesumofpesos6,000paidbythe deceased for a life annuity. The trial court gave judgment for the defendant. Plaintiffappeals.

Theundisputedfactsarethese:OnSeptember24,1917,JoaquinHerrermadeapplicationtotheSunLifeAssuranceCompanyofCanada through itsoffice inManila fora lifeannuity.TwodayslaterhepaidthesumofP6,000tothemanagerofthecompany'sManilaofficeandwasgivenareceiptreadingasfollows:

MANILA,I.F.,26deseptiembre,1917.

PROVISIONALRECEIPTPesos6,000

RecibilasumadeseismilpesosdeDonJoaquinHerrerdeManilacomoprimadela Renta Vitalicia solicitada por dicho Don Joaquin Herrer hoy, sujeta alexamenmedicoyaprobaciondelaOficinaCentraldelaCompaia.

Theapplicationwas immediately forwarded to theheadofficeof thecompanyatMontreal,Canada. On November 26, 1917, the head office gave notice of acceptance by cable toManila. (Whether on the sameday the cablewas receivednoticewas sent by theManilaoffice of Herrer that the application had been accepted, is a disputed point, whichwill bediscussedlater.)OnDecember4,1917,thepolicywasissuedatMontreal.OnDecember18,1917,attorneyAurelioA.TorreswrotetotheManilaofficeofthecompanystatingthatHerrerdesired towithdrawhisapplication.The followingday the localofficereplied toMr.Torres,statingthatthepolicyhadbeenissued,andcalledattentiontothenotificationofNovember26,1917.ThisletterwasreceivedbyMr.TorresonthemorningofDecember21,1917.Mr.HerrerdiedonDecember20,1917.

As above suggested, the issue of fact raised by the evidence is whether Herrer receivednoticeofacceptanceofhisapplication.Toresolvethisquestion,weproposetogodirectlytotheevidenceofrecord.

Thechief clerkof theManilaofficeof theSunLifeAssuranceCompanyofCanadaat thetimeof the trial testified thatheprepared the letter introduced inevidenceasExhibit3,ofdateNovember26,1917,andhandedittothelocalmanager,Mr.E.E.White,forsignature.Thewitnessadmittedoncrossexaminationthatafterpreparingtheletterandgivingittohemanager,henewnothingofwhatbecameof it.The localmanager,Mr.White, testified tohavingreceivedthecablegramacceptingtheapplicationofMr.HerrerfromthehomeofficeonNovember26,1917.HesaidthatonthesamedayhesignedaletternotifyingMr.Herrer

ofthisacceptance.Thewitnessfurthersaidthatletters,afterbeingsigned,weresenttothechiefclerkandplacedonthemailingdeskfortransmission.Thewitnesscouldnottelliftheletterhadeveryactuallybeenplacedinthemails.Mr.Tuason,whowasthechiefclerk,onNovember26,1917,wasnotcalledasawitness.Forthedefense,attorneyManuelTorrestestifiedtohavingpreparedthewillofJoaquinMa.Herrer,thatonthisoccasion,Mr.Herrermentionedhisapplicationforalifeannuity,andthathesaidthattheonlydocumentrelatingto the transaction in his possession was the provisional receipt. Rafael Enriquez, theadministratorof theestate, testified thathehadgone through theeffectsof thedeceasedandhadfoundnoletterofnotificationfromtheinsurancecompanytoMr.Herrer.

OurdeductionfromtheevidenceonthisissuemustbethattheletterofNovember26,1917,notifyingMr.Herrerthathisapplicationhadbeenaccepted,waspreparedandsignedinthelocalofficeoftheinsurancecompany,wasplacedintheordinarychannelsfortransmission,but as far as we know, was never actually mailed and thus was never received by theapplicant.

Notforgettingourconclusionoffact,itnextbecomesnecessarytodeterminethelawwhichshouldbeappliedtothefacts.Inordertoreachourlegalgoal,theobvioussignpostsalongthewaymustbenoticed.

Until quite recently, all of the provisions concerning life insurance in the Philippines werefound in theCodeofCommerceand theCivilCode. In theCodeof theCommerce, thereformerlyexistedTitleVIIIofBook IIIandSection IIIofTitle IIIofBook III,whichdealtwithinsurance contracts. In the Civil Code there formerly existed and presumably still exist,ChaptersIIandIV,entitledinsurancecontractsandlifeannuities,respectively,ofTitleXIIofBookIV.OntheafterJuly1,1915,therewas,however,inforcetheInsuranceAct.No.2427.Chapter IVof thisActconcerns lifeandhealth insurance.TheActexpresslyrepealedTitleVIIIofBook IIandSection IIIofTitle IIIofBook IIIof thecodeofCommerce.The lawofinsuranceisconsequentlynowfoundintheInsuranceActandtheCivilCode.

While, as just noticed, the Insurance Act deals with life insurance, it is silent as to themethods to be followed in order that theremay be a contract of insurance.On the otherhand, theCivilCode, in article 1802, not only describesa contact of life annuitymarkedlysimilartotheoneweareconsidering,but intwootherarticles,givesstrongcluesastotheproper disposition of the case. For instance, article 16 of theCivil Code provides that "Inmatterswhicharegovernedbyspeciallaws,anydeficiencyofthelattershallbesuppliedbytheprovisionsof thisCode."On thesupposition, therefore,which is incontestable, that thespecial law on the subject of insurance is deficient in enunciating the principles governingacceptance,thesubjectmatteroftheCivilcode,iftherebeany,wouldbecontrolling.IntheCivilCodeisfoundarticle1262providingthat"Consentisshownbytheconcurrenceofofferandacceptancewith respect to the thingand theconsiderationwhichare toconstitute thecontract.Anacceptancemadeby letter shall not bind thepersonmaking theoffer exceptfrom the time it came to his knowledge. The contract, in such case, is presumed to havebeenenteredintoattheplacewheretheofferwasmade."Thislatterarticleisinoppositiontotheprovisionsofarticle54oftheCodeofCommerce.

If no mistake has been made in announcing the successive steps by which we reach aconclusion,thentheonlydutyremainingisforthecourttoapplythelawasit isfound.Thelegislatureinitswisdomhavingenactedanewlawoninsurance,andexpresslyrepealedtheprovisionsintheCodeofCommerceonthesamesubject,andhavingthusleftavoidinthecommercial law, it would seem logical to make use of the only pertinent provision of lawfoundintheCivilcode,closelyrelatedtothechapterconcerninglifeannuities.

TheCivilCoderule,thatanacceptancemadebylettershallbindthepersonmakingtheoffer

only from the date it came to his knowledge,may not be the best expression ofmoderncommercialusage.Stillitmustbeadmittedthatitsenforcementavoidsuncertaintyandtendstosecurity.Notonlythis,butinorderthattheprinciplemaynotbetakentoolightly,letitbenoticed that it is identical with the principles announced by a considerable number ofrespectablecourts in theUnitedStates.Thecourtswhotakethisviewhaveexpresslyheldthatanacceptanceofanofferof insurancenotactuallyorconstructivelycommunicated totheproposerdoesnotmakea contract.Only themailingof acceptance, it hasbeensaid,completesthecontractofinsurance,asthelocuspoenitentiaeisendedwhentheacceptancehaspassedbeyondthecontroloftheparty.(IJoyce,TheLawofInsurance,pp.235,244.)

Inresume,therefore,thelawapplicabletothecaseisfoundtobethesecondparagraphofarticle1262oftheCivilCodeprovidingthatanacceptancemadebylettershallnotbindthepersonmakingtheofferexceptfromthetimeitcametohisknowledge.Thepertinentfactis,that according to the provisional receipt, three things had to be accomplished by theinsurancecompanybeforetherewasacontract:(1)Therehadtobeamedicalexaminationof the applicant (2) there had to be approval of the application by the head office of thecompanyand(3)thisapprovalhadinsomewaytobecommunicatedbythecompanytotheapplicant. The further admitted facts are that the head office in Montreal did accept theapplication, did cable theManila office to that effect, did actually issue the policy anddid,through itsagent inManila,actuallywrite the letterofnotificationandplace it in theusualchannelsfortransmissiontotheaddressee.Thefactastotheletterofnotificationthusfailsto concur with the essential elements of the general rule pertaining to the mailing anddeliveryofmailmatterasannouncedbytheAmericancourts,namely,whenaletterorothermailmatterisaddressedandmailedwithpostageprepaidthereisarebuttablepresumptionoffactthatitwasreceivedbytheaddresseeassoonasitcouldhavebeentransmittedtohimintheordinarycourseofthemails.Butifanyoneoftheseelementalfactsfailstoappear,itisfataltothepresumption.Forinstance,aletterwillnotbepresumedtohavebeenreceivedbytheaddresseeunlessitisshownthatitwasdepositedinthepostoffice,properlyaddressedandstamped.(See22C.J.,96,and49L.R.A.[N.S.],pp.458,etseq.,notes.)

Weholdthat thecontract fora lifeannuity in thecaseatbarwasnotperfectedbecause ithasnotbeenprovedsatisfactorily that theacceptanceof theapplicationevercame to theknowledgeoftheapplicant.la w p h !l.n e t

Judgmentisreversed,andtheplaintiffshallhaveandrecoverfromthedefendantthesumofP6,000with legal interest fromNovember20,1918,untilpaid,withoutspecial findingas tocostsineitherinstance.Soordered.

Mapa,C.J.,Araullo,AvanceaandVillamor,JJ.,concur.Johnson,J.,dissents.