Rafael Enriquez v. Sun Life Assurance Company of Canada

Summary

This case involved a dispute over whether a life annuity contract was perfected when the applicant died before receiving notification of acceptance. Joaquin Herrer applied for and paid P6,000 for a life annuity in September 1917. The insurance company's head office accepted the application in November 1917 and instructed the Manila office to notify Herrer. However, while a notification letter was prepared, evidence showed it was never actually mailed. Herrer died in December 1917 without receiving notice. The Supreme Court, applying Civil Code Article 1262, held that acceptance by letter only binds the offeror when it comes to his knowledge. Since the acceptance never reached Herrer, no contract was formed. The Court ordered the insurance company to return the P6,000 with interest, establishing the principle that actual or constructive communication of acceptance is essential for contract perfection in insurance matters.