Enriquez vs. Sun Life Assurance Company of Canada

A contract is not perfected until acceptance of the offer comes to the knowledge of the offeror. For an acceptance communicated by letter, it only binds the offeror from the time such acceptance came to his knowledge.

This case arose from a dispute over a life annuity contract. The applicant, Joaquin Ma. Herrer, paid P6,000 and received a provisional receipt subject to medical examination and approval by the company's head office. The head office approved the application and cabled acceptance to its Manila office, but the applicant died before proven receipt of the notice.

• Filed in the Court of First Instance (now RTC) of Manila.
• The trial court rendered judgment in favor of the defendant, Sun Life.
• The plaintiff appealed directly to the Supreme Court.

• On September 24, 1917, Joaquin Herrer applied to Sun Life for a life annuity and paid P6,000, receiving a provisional receipt stating the application was subject to medical exam and central office approval.
• The application was forwarded to the head office in Montreal, Canada.
• On November 26, 1917, the head office cabled acceptance to the Manila office.
• The Manila office manager signed a letter of notification to Herrer on the same day, but the evidence was inconclusive on whether this letter was actually mailed.
• Herrer's attorney wrote to withdraw the application on December 18, 1917.
• The Manila office replied on December 19 that the policy had been issued and referenced the November 26 notification.
• Herrer died on December 20, 1917, before this reply was received by his attorney.
• The administrator of Herrer's estate found no letter of acceptance among the deceased's effects.

• The contract was never perfected because Herrer never received notice of the acceptance of his application before his death.
• The provisional receipt made the contract conditional on approval and notification; without proven notification, no binding contract arose.

• The company had accepted the application, issued the policy, and had taken all steps to notify the applicant.
• The mailing of the acceptance letter created a presumption of receipt, which should be upheld.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether a contract of life annuity was perfected between Herrer and Sun Life.
  • Whether the acceptance of the application was communicated to and came to the knowledge of the applicant, thereby creating a binding contract.

• Procedural: N/A
• Substantive: The SC ruled no contract was perfected. The acceptance of the offer did not come to the knowledge of the offeror (Herrer) before his death. Under Article 1262 of the Civil Code, an acceptance by letter only binds the person making the offer from the time it came to his knowledge. The company failed to prove the acceptance letter was actually mailed and received, thus the essential element of consent was not completed.

• Perfection of Consent in Contracts — Consent is manifested by the concurrence of offer and acceptance. For contracts where acceptance is made by letter, the contract is perfected only from the time the acceptance comes to the knowledge of the offeror.
• Supplementary Application of the Civil Code — When a special law (like the Insurance Act) is silent on a matter, the provisions of the Civil Code supply the deficiency. Here, the Insurance Act did not specify the rules for acceptance, so the Civil Code's rules on consent applied.

• "An acceptance made by letter shall not bind the person making the offer except from the time it came to his knowledge." — Citing Article 1262 of the Civil Code.
• "We hold that 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."

• N/A (The decision references general American insurance law principles and treatises like Joyce on Insurance, but does not cite specific prior Philippine or foreign cases as controlling precedent.)

• Article 1262, Civil Code — The governing rule that an acceptance by letter only binds the offeror from the time it comes to his knowledge.
• Article 16, Civil Code — Provides that deficiencies in special laws shall be supplied by the provisions of the Civil Code.
• Insurance Act No. 2427 — The special law governing insurance, which repealed prior provisions in the Code of Commerce but was silent on the method of acceptance for insurance contracts.

• Justice Johnson (Dissenting) — The dissent is noted but its reasoning is not detailed in the provided text.