Sun Life of Canada (Philippines) Inc. v. Sandra Tan Kit, G . R. No.

183272, October
15, 2014

DOCTRINE/S:

Compensatory interest is only due the obligor if it is proven that he has failed to comply with
his obligation.

FACTS:

Respondent Sandra (widow) is the beneficiary of the life insurance policy of Norberto with
petitioner Sun Life. Upon Norbertos death, Sandra tried to collect the insurance proceeds
from Sunlife but was denied due to non-disclosure of material and relevant information
about Norbertos health. In his insurance policy application filled out on October 1999,
Norberto answered "No" to the question inquiring whether he had smoked cigarettes or
cigars within the last 12 months prior to filling out said application. This is contrary to the
medical report issued by his doctors stating that he was a smoker and stopped only in
August 1999. Sandra refused to accept Sun Lifes offer to reimburse premiums and filed a
case to recover the full policy benefits. RTC ruled in favor of Sandra and ordered Sun Life to
pay full face amount of the policy plus interests. CA reversed ruling and ordered Sun Life to
simply pay the full amount of premiums plus interests.

ISSUE/S: WON Sun Life is liable for interest on top of the premiums to be refunded?

HELD:

NO. Compensatory interest is only due the obligor if it is proven that he has failed to comply
with his obligation. In this case, the cause of non-payment was a consequence of Norbertos
concealment of material information, therefore not the fault of Sun Life.

Petitioner Sun Life properly gave notice of its rescission of the policy due to concealment
and tendered refund of the premiums through a check attached in the said notice.
Respondent, however, refused to accept the check. Petitioner Sun Life also timely filed its
appeal with the CA based from adverse judgment of the RTC. There was no delay on the part
of Sun Life as to render it liable for damages.