eG ” aT ena Reston and ss = Cont a ato 200 oe sematecinnnti tts aa contrac of insurance is bound 9 know pen to his inquiry, equally with political or material perils SEC, 32. ach party 102 aut ee general causes ich a open aerate other and which may afet the etcmptated: and all general usages of ec. 33, The sight to information of matcal acs may be eae cir by the tems of insurance of BY neplec! 19 make ates teach fc, where they 6 distinc implied in other {ack of which information iscommanic from Sections 31 and 32 of NOTES. These Sections were taken f fand 33 ofthe Insurance the Imsurance Act andthe same as Sections 32 Cade of 197, ‘Ser discussions under Section ‘SEC. 4. Information of the nature or amownt of the interest of one insured need not be communicated unless in ansmer to an Inquiry, except as prescribed by Section SI. NOTES. This was copie from Section Sof the Insurance Act and the same a Section M ofthe Insurance Code of 197% NATURE AND AMOUNT OF INTEREST. The insur peed not communicate the nature ot amount of his interest except a) hen the {nauree makes an inguty thereon, and () where the insured i not the absolute owner ofthe propery insured.” SEC. 3. Nether pty toa contrac of innurance is bound t@ communicate, even spam ngs, information of his own jude! “upon the matters in question. ae NOTES. This sector is section was copies! from Section 34 of the Insurance [Act and the same as Seton 35 ofthe Insurance Code of 1978 OPINION OR JUDGMENT. Apart isnotbound to communicate Information of his own opinion, or judgment upon the matter i —— sane ae ele aT aS ta San res a nae en _gusion eve when asked" And in cae apt advanes his opinion eetggment the oer. an untrue statement wl not avoid the oly ge in good faith without nerton to deceive Th were the if maey expreses an opinion that his house i of certain value the insute cat fora moment be justified in thinking that the vale of inate seal just wha the owner estimates ito be fore must be te ad to how thatthe vale ofthe property ordinary capable of eset ascertainment oly by a sale WHEN OPINION MUST BE COMMUNICATED. In marine surance, "information ofthe belie or expectation of third person, nt inswegce to material fat mater” and must be communicated. stereo therein feted that ofa third person and not that of the insured rimtes REPRESENTATION, SEC. 36. A representation may be oa or writen. SSEC.37.A epresentation may be made atthe time of, or befor, insuance ofthe policy. NOTES Section 6 ws coped fom Seon 3 he nance et OTS, Seas 2 samy te same Section 3 of he Ac le Sect Dead 7 ae these a Sections 60nd 37 of thetmuronce Ae 178 crneceNTATION DEFINED. A represen ao 1 ee eer condion fein he sk made the rien tate of mp eng ace he sue 0 ssoume the risk wn pra Anes? Carre wn i tS oben aac voters eet et ace Porta padetan seertet ot ces re i itz ort Oe ee wl oc ek an~ PAOLPPINE COMMERCIAL LANS VOLUME! Sea. 36 MISREPRESENTATION DEFINED. Misrepresentation ig. statement of something a a fact which i untrie and material tothe risk and which the insured states knowing ittobe untrue in an attemps to deceive, or which he states positively as true without knowing it fo ‘be true and which has a tendency to deceive [NATURE OF REPRESENTATION. Representation i a olateral rater which induces the execution ofthe contrat of insurance ‘They are preliminary saterent of facts of cumstances relating fo the proposed adventure, made for the information ofthe insur = isa ellaterl inducement forthe insurer to enter into contrat of srsurance WHEN REPRESENTATION MAY BE MADE. Since repre: sentation saninducement toa contact of insurance must onina tremade a the me of suing the plc or Before it" submited, however, that representation may ewe be made after the sun the policy when the purpose thro sto induce the insurer to modiy sn etn rans cna ie he provi on eps Se applicable not only to the orignal formation ofan inurance But abo toits modiietion = = HLusTRavion: A insured his bulding apart fre, Ater the policy was ‘sou, Aelized tha the premiums charged were higher tecane ‘part ofthe bulding was ccupiedby a bkery Auhed the ieutes {rece the premium forthe usp portion o he oly onde ‘rete that he bakery war no linger inte busing ce rte ‘vas sl thee The insre reduced the remiu Question De the insured make a misepresntton? Anewer Yes are ‘made » masepeetation although the sateen wos tat ace the anc ofthe poly, bean was nnd to deco te Insurer it consenting a mosictono th poly FORMS OF REPRESENTATION. No porticularform is necesary forthe validity of repreventation. It may be oral or writen = I oy BERGA 2 Per One ie CBN. 80 td 32 rowan : onan = =one, Soscew. oe KINDS OF REPRESENTATION, Repeenaton say ether be 1. _Afirmative which isan affemation of fac exiting the contact begins oF = ae 2, Promissory which i statement by the insured wat ito happen dung the terme nanan oS ILLUSTRATIONS. Co) Atimatve representation sbundrcr of we ne ees alone Pamatirmotve preset ony and ene dasha et een eee eee (0) Promiaoyrpesriaion | representation in an appiation fra iy bond hat the employer's books ei Ream spatd per promiory representation” ‘SEC. 38. The language of representation is tobe interpreted ‘bythe same rules as the language of contracts in general NOTES. Thswascpe fom Seon 7 than Atand these Scone nance 9 CONSTRUCTION OF REPRESENTATION. A wprecation not nt ely tank ace) nape promis repesett Ht sc hy ae stn Spd ke TEs sossrr cOMMEECIALLAY Se Send anc ttn mete 210 ILLUSTRATIVE CASE: fa Union Assurance Co. 38 48 ding tought car for 80. Harding then gave the a sagittis The ie napping for insrance onthe sd SEAEN tat pie pd bythe prope” ws P3300 Sere value was T3060, Question: Considering tha the ad ete a didnt pay the pice ai was merely FRRRre tg wah guy of mseepresenation? Aner Foe acrepesentn ral rath was not neces. Tee ee masumed tat the sour should not have sued cma lo vas cic tae hat the pie representing Bertha hed been pid by the insured and by no other eit wculd ature an automate acquired By gift Fert echunge x any ater ie nt requting the owner tak espe a oly fort action” Hang « Commerc i ‘SEC. 39. A representation as to the future is to be deemed a promive unset appears that it was merely a statement of belief oF ‘expectation. NOTES. This Section was copied from Section 38 ofthe Insurance [Actand the same as Section 39 ofthe Insurance Code of 1978 STATEMENT OF BFLIEF OR EXPECTATION NOT PROMIS- ORY REPRESENTATION. Represetaton of expectation or inten Stor beet are be cl stings fom promissory repre ‘sentations, as follows: * ” ree (2) Repreertations of expectation or belt ar statements of farce acs oF evr whch ae tena coingent and which te ng here ut have stew acts tanita ey they ae {ot pest, actual knowledge” While promiory reprsentation 8 pram tobe performed afr deco atos cme into een (©) Unless made with fraudulent inten, dhe eventual asi er nontlilment os represnaon a expecatin ofB il rod the poy whee fay of prema representation on gs Cm son are Ca, 3 eat Go a A 8 ort ‘Sonn Go nad, 8 mean ith CC ay SC 8 Wak ea ays VOLUME! sc: PART — THE NSURANCE CODE se CHARTER THE CONTRACT OF NSURANCE o jn entitles the injured party to rescind the contract from the vial anata Topresentation becomes aie * me the rep ILLUSTRATIONS: (ay Representation of expectation: “The fay of sateen a8 tthe time wen the wee routed will the natura hecarg be shipped ad the Inoue the profits expected wil mot avd te oly i the a frau the same ae merely sate of expectation tral (Promissory representation: Statements thatthe vessel tobe epsied at certain pace coc witbenlyedochets ae promissory representation tht must Se abstntly complied wth SEC. 40. A representation cannot qualify an expres provision ina cniact of insurance, Bu tay qualify an implied waranty stanly the same as Section 39 of Tis provision bailey mn if Section 40 of the Insurance Code the ngurance Act and an exact copy o of 1978. exp array pat “ofthe contractand conta Hrorin another instrument See sd and erred he pou s¢ making Ah ie Repscnuation onthe other hand isa mere colar Ss aie r ert yok a pac ofthe policy” Such bing the cas. feta opt the contact canto Be 0a 5 ca fellow that 2 Part nt apart ofthe contact, On the oe Bees SP paren cis ft of he pey™ may e uals modifi by representation ers ey New England Mat “Shion Coe St ate Mant C8 seco oye 318, "acton #0.100 PHILIPPINE COMMERCIAL LAWS VOLUME ‘Thelnstace Cove and Financ Reitman adver Atof 2010 SEC. 41. representation may be altered of withdrawn before the insurance is effected, but not afterwards. Sen ry NOTES. This Section was copied from Section 40 of the Insurance ‘Act and the same as Section 4 of the Insurance Code of 1978, REASON FOR THE RULE. As discussed above, representations an inducement forthe other party to enter into a contract of insurance and, therefore, after the other party is s induced, such inducement ‘may no longer be altered or withdtawn. Thus, under this section, "a representation may be altered of withdrawn before the insurance ie effected but not afterwards” SEC. 42. A representation must be presumed to refer to the date ‘on which the contract goes into effect. NOTES. This Section was copied from Section 4 of the Insurance ‘Act and the same as Section 42 of the Insurance Code of 19%, REFERS TO TIME OF EFFECTIVTTY OF POLICY. A postive representation thats eran fact doce or doesnot eis eles to he Sime when the contac is completed, and Becomes binding ™ And Accordingly aera poi has en sued and deer sequent tmistatement bythe insred mae mgood fain elton tthe ok fr subjet mates wil ot ind the red Thus even though he ‘representation that noche insurance exits on he property tes trac at the ime tis made yetit sun at the tie he apcaton ie cepted andthe ply sed thenured guy ofmirereenaton ‘farina the ploy knowledge of| information which he has spon e810 be true, withthe explanation that he does so on the information of others; or he may submit the information, in its whole exten tothe insurer and in either cave is he responsible for its truth, unless it proceeds from an agent of the insured, whose duty it isto give the information. sey Conh a Abed, No 18 ar na, yeah 1 ee PSC) 8 20 hing Cart Pas Androoin Mal C02, 0,10) Me BUREN SB seo PART — ri NsuANCE COE ‘CHAPTER THE CONTRACT OF INSURANCE NOTES. This section was bse ftom Secon 42 of the Insurance ‘Act and the same as Setion 3 ofthe Insurance Cade of 178, NO PERSONAL KNOWLEDGE. When the insured has 10 personal knowledge ofa fct but merely reeves information frm fthershe may or may not communicate such information fo the insurer fd when he does, he will ot be responsible forts truth ILLUSTRATION: | puch 3c for PA gave the sida Ns wie sno he ht the ve oe wan POL The Tile oud he a and psc eee get ot Selinger sor a he armani ‘asthe aud pully of mevpesctaic”Anomer No bce Melnouredddeet stot he own nowt ate ance ee het etn te rE Pao Se me epee the rmton en Ian tse ne cine Yo ate fourc after norman ™ domain IONS, Aliph hep 9 ssid Tom esa wich ue 20 per oe a ‘Sov ed commenced et Se a cea dase be soma me Smt c vi nan tl hy ean wa seq ye gett ee ee Mowe ye te tone te mar ae ko tn aud rom hs grt but ewe oa a ie claitsbeaabear 8 ee wsurance, the information as to the belief or rt ne eae {communicates othe insurer 2 i mate expectation oft Sn must there be on a gcse eaINECONMERCALLAWSVOUMEL Se Psimbiacoree sean oe tency At 20 SEC. 44, A representation i to be deemed fase when the facts fail to correspond with its assertions or stipulations NOTES. This provision was copied from Section 43 of the Insurance Actand the same as Section 44 of the Insurance Code of 1978, ‘SUBSTANTIAL TRUTH SUFFICIENT. As previously discussed, tera truth of representation isnot necessary, It being suficent that the representation is substantially true and accurate.” TLLUSTRATION: ‘The insur eres tate dd not drink bee other ints The tah, Roweves,waethat be drank ber occasion 1s, Queton Wa thee» msepresetton that eed thei erte nse the poy? Answer No, because the repent ‘Son need notte erally tse Oxeaonal dering by these trast rae ccutance hated the sure sin ee SEC. 45.14 representation i false ina material point, whether affirmative or promissory the injured party s entitled to rescind the ‘Contract from the ime when the representation becomes false. NOTES. This Section amended Section 45 ofthe Insurance Code by eliminating the lst stone hich ead, "The right to rescind {ranted by ths Cade tothe insurer waived by the acceptance of Premium payments dvptehnowede ofthe ground a resem” FicSecion hwever mnt th aunt of etn 1 ance Code of 1978 struc by Tata Parana Bip, 87 by removing te word “intentionally” benee he words an "Tse ‘Ar explained by Avembiyman H1.Pees in Faamentay Bil No {Bat which ater cm became Section 2 of Bos Pambanea By 54 the word “intone the wo a’ wa ot aril nga province Ee iered pet iw ict na ee ee ih nk party ah waning naa ee it ae ply ws oe PART THE NSURANCE CODE 16 “CHAPTER THE CONTWACT OF INSURANCE ould be wholly tthe mere of anyone who wished to apy for IReurance sit would beimpeane tn show actual fad exept in theentene cases cold no rey onan aplication a contain, Frtormation on hich cold act There woul be no incentive napplcantt tll he rath” “This bill secks to cont the nega, crated by the amendment of he orignal provision ofthe Insurance ACt By ‘veting tothe later The word “inteonlly” a used inthe orcatprovion of the Insurance Code of 197% must be ‘limites [EFFECT OF MISREPRESENTATION. Insurance may be avoided where the insured made fale statements as to matters that are material {othe risk forthe purpose of obtaining the insurance and thereby induce the insurance company 0 issue the policy™ To constitute Iminrepresentation, however, the statement must be substantially untrue Ths, the policy cannot be avoided where the statements are ‘bsnl tue although not strictly and iteally true ILLUSTRATIONS: (0) The insured epee tht she never had ance tumor or undergone operation notwittaning the fact that he months lore he taunt ofthe pic she was operated on fOr cer" Quesion May he polis be avoided? Answer The py nay beste There canbe no recover from terres where {Beanswers ten by the sued were subeantlly ase on 8 ‘material pont (2) The imal was could 10 answer questions in ‘he aplication fore sara st what physica had ee ‘Sealey ra ete the applicant. The applicant arwweed inthe negating tthe had bem cone in ahold trated ts umber of anne fr vane alent cdi. Incipient pulmonary tuberous, Quetion: Upon death o he Inca tay the bewtary mover the ae? Anawee Thee am fren fo he nse ice he anes ED “aha 4 Fa tN Nn i Ane etn it a104 PATUPPINE COMMERCIAL LAWS VOLUME ‘Ttnmrane Codeand Franc Rehabitaton ang HES Tnstveny Ae 9200, [WHERE TRUTHFUL STATEMENTS ARE GIVEN TO AGENT, Where an epplcant fr nsurane mae tubal satnens of een [Risto et of the ure nd merely signed sank epee Sire get Bed tthe anower ngung sr meres ee th the enue uot svld the plc a the late mat sa responsibilty for the acts ofits agents” However, where there was connivance between the insured and the insurance agent the insurer may stil be absolved from liability although the information in the application was filled in by is agent = ILLUSTRATIVE CASES: (Insular Life Assurance Co. «Feliciano, 78 Pil 201, GR, No. LA7585, September 1, 1981 Evaristo Feliciano filed an application for insurance with the herein petitioner upon the sliataon of one of ts agents. Two {surance polices othe aggrgate arnount of P25,000 were usued him. Feliciano died on September 29,1935. The defendant company refused te pay on the ground thatthe policies were fraudulenly ‘btaned he insured having given false answers and statements in the application aswell as inthe medical eport. The present action ‘was brought to recover on said polices The lower cout found that at the toe Felco fled his application and atthe tine he was subjected fo physical examination by the medical examines ok the herln petitioner, he was already sferng from tuberculosis. ‘Ths act appear inthe negative bath nthe aplication and ia the medical report The lower court, ater an exhmustive examination ofthe conficting testimonies, also found that Feliciano was made to sgn the appistion andthe examiner's report in blank and that afterwards the blank spaces therein were filled in by the agent and the medical examiner who made appear therein that Feliiano was a St subject for tsurance. The loner cou aso held that neither the insured nor any member of hs fanily concealed the real state of health ofthe sured. That asa mater of act the Insured, aswell asthe mersbers of hi fay. fold te agent and he medical examiner thatthe applicant had been sick nh coughing for sometime and that he had slo gone these mest the Sarl Saratarum. On appeal this nding face of the Tower cour was ‘stained by the Cour of Appesie Question: na action on the policy may the naurer rai the delorwe of minrpresentaton? “Tirol Le Amarante Co. eco 7 Pil, 20:9 Can 24, tnlarife Asarana ov Fea, Pi ats 197 Bar Page eo coe ‘CHAPTER —THE CONTRACT OF NScRANCE 1s Answer The insur ingot ae mise Secae us abnme oprsity er 8 a Inthe present cache age ea he tne Sa teal ofthe ire Te nmr medal ne the aplation knowing ale ute ppnt ege e Suaton son in wh one of wo moet te au ee ins for hs lane pen ahr pron ieee inser who pave he patel espa stthe one mo seldom a be ed Couldputisrenhim hs how wos nd seeped {8 poly and consumo ems masa at Semcon he tv of tem te on nbn epee Saracer tothe ded psoas fo apt hulle one ar tel “Te weigh of hoy that fn apt oft in er bain oon opp ferrets oe and ue Shower intros conaied inthe sppcsson rinuranes, rout knowledge ofthe apa lin fase towers thet Taaulenty or tbe he srr cot ese he sty of ‘Scanner oe ig ae Sener bout pad ote suber nef ewe or Seve he apes ors ome tory oes ‘atbrough ibe atenonle apart (2) sla Life Asarance Co. Feiano, 74 Fil 468 (Re- hearing) G-.No. L983, December 9,18 ‘After acareful reexamination fhe fics and te lw we are persuaded tha peitonr contention core ee aes eerie ee aa nate et eee seen ah lee feet hon ie ee ere mecten epee aa re cise ep ee ear lt ce Pee ns ee Seer accede ir Secee a eet stew ea i fer cana sr ara on we ce ce eam nt es ea eee rine se SR Anca Flinn 7 Pi 2, GH No LAIR Soperx PHILIPPINECOMMERCIALL AWS VOLUME 7 eT ein Fnca Raabe nd 8 ‘enemy at pate in gucston When he apt the poi he new that he torn good heath Nevers he noon accepted the est tg error bat then and there applied or and ltr accepted Fay of F500 From ll the acs and cecurstanct of {Bos ease we te contained to conclude that the insured was 3 jane and eoresponsibe with Agent David and Media ‘EcEtiner vader othe fauslent procurement ofthe pois a [Guerton and that by reson thereof said police are nite ™ FALSE STATEMENT OF AGE. Where the age of the insured was faley sated or misstated, the poliey will not be avoided bat, Tfatead, dhe value of the insurance will be adjusted in such a way that the “amount payable or benefit accruing under the policy shall be such av the premium paid would have purchased at the core, age" Such pringple, however, is applicable only when there was a ‘ald and binding contract not procured y fraud and whee there was tnly an innocent misstatement of age™ and does not apply where the Such acceptance could no tise from a mere delay onthe prt ofthe insurer pasing on an application for insurance onthe contrary ‘Such delay for an untersonable period of time may be construed as 8 ‘ejection ofthe application = WHEN ACCEPTANCE PRESUMED. When an insurer accepts ‘and ain foran unreasonable length of ume the ist premium coveted ‘bya cachier's eit stating that te plicy is efectve om the date is (Shaed without the policy being issued iis presumed that the insurer has assumed the risk and i able fr the loss that occurs before the pplication erected = Unreasonable delay in returning the premium ‘lees presumption of acceptance ofthe insurance application SEC. 53. The insurance proceeds shall be applied exclusively to the proper interest ofthe person in whose mame or for whose benefit Itismade unless otherwise spcifed inthe plicy “Sha Tbr Beet Copan «Cott App 32 SRA 19% aed Ne. tr Eu “cic 19 Ci Coe Erg San Lea rr ‘aera ina Co Hanan CALA Tens 1 24 4, 2, FRA Thppne Ameria Ue CoCAY790.6 (Nn 37 (scan pein wn ae rr eth wots ey on Beni ar 35. 208 foe (OAMFTERI THE CONTHACT Oe WSURANCE = SEC. 54. When an insurance contrat is executed with an agent cor truate a the insured, the fact that hi principal or benefcary is the real partyin terest may be indicated by describing the insured Shagent or trste, or by other general words inthe pli. ‘SEC. 5S To render an insurance effected by one partner o part ‘owner, applicable tothe interest of his corparners or other Pat- ‘Samer is necessary thatthe terms of he poicy shouldbe such 28 fre applicable to the jin or common interest NOTES, Section 53 amended Scio 50 of he Insurance Act by the insertion ofthe word “proceeds” ater “insurance” and the phrase “oe for whose benefit” ate the word “name’"It's the same as Section ‘Shot the Insurance Coe of 1978 Section 54 was based on Section SI ofthe Insurance Act wile ‘section 55 was copied from Section 5 ofthe Insurance Act. Both ‘Sections ae the sate a8 Sections Stand 55 of the Insurance Cade of 78. WHOSE INTEREST IS INSURED? AI persons specially med an persons sured ina ply sings es ofc damage ‘proper recovered or protected bythe policy= but a person not #9 (eaed ie not protected ithe policy des not contain a provision which Ticats intent to cover the interes of another person other than the fumed insured nuance thee hal be apd ence 2 Te Siper nteret of the person in whowe name oof whose Benet ie imede unieseetberwse specified in the policy” According, ‘Gh ceveral persons Rave distinc interests nthe sae property, he [urancs taken by one in his own ight does notin any way insure the Interest ofthe other ona thes in Mora, GR No L208 May 29167, ots is carga etl damage and made the iyi Heys In he moggre othe THe Steer aa ain by Braco. Bother ih mam ey Byala Aut Pars Co. Boo Brter Shen iy CeiN N