Fieldman’s Insurance v. Songco - Disclosure of Material Facts in Insurance

25 SCRA 70

Facts:

>  In 1960, Sambat, an agent of Fieldman’s Insurance, induced Songco, a man of scant education to enter into a common carrier insurance contract with Fieldman.

>  During the inducement, a son of Songco butted in and said that they could not accept the type of insurance offered because theirs was an owner-type jeepney and not a common carrier.

>  Sambat answered that it did not matter because the insurance company was not owned by the government and therefore had nothing to do with rules and regulations of the latter (Fieldman).

>  The insurance was executed and approved  for a year from Sept. 1960-1961.  It was renewed in 1961 for another year.

>  In Oct. 1961, the jeepney collided with a car in Bulacan and as a result, Sonco died.  The remaining members of the family claimed the proceeds of the insurance with the company but it refused to pay on the ground that the vehicle was not a common carrier.

Issue:

Whether or not the Songcos’ can claim the insurance proceeds despite the fact that the vehicle concerned was an owner and not a common carrier.

Held:

Yes.

The company is estopped from asserting that the vehicle was not covered.  After it had led Federico Songco to believe that he could qualify under the common carrier liability insurance policy, and to enter into a contract of insurance paying the premiums due, it could not thereafter be permitted to change its stand to the detriment of the heirs of the insured.  It knew all along that Frederico owned a private vehicle.  Its agent Sambat twice exerted the utmost pressure on the insured, a man of scant education, and the company did not object to this.