Harding v. Commercial Union Assurance Company- Willful Misstatement

38 PHIL 464

Facts:

>  Henry Harding bought a car for 2T in 1915.  He then gave the car to his wife Mrs. Harding.

>  While Mrs. Harding was having the car repaired at the Luneta Garage (Luneta was an agent of Smith Bell and Co., which in turn is Commercial Union’s agent), the latter induced Mrs. Harding to insure the care with Commercial.

>  Mrs. Harding agreed, and Smith Bell sent an agent to Luneta Garage, who together with the manager of LUneta, appraised the car and declared that its present value was P3T.  This amt was written in the proposal form which Mrs. Harding signed.

>  Subsequently, the car was damaged by fire.  Commercial refused to pay because the car’s present value was only 2.8T and not 3T.

Issue:

Whether or not Commercial is liable.

Held:

Commercial is liable.

Where it appears that the proposal form, while signed by the insured was made out by the person authorized to solicit the insurance (Luneta and Smith Bell) the facts stated in the proposal, even if incorrect, will not be regarded as warranted by the insured, in the absence of willful misstatement.  Under such circumstances, the proposal is to be regarded as the act of the insurer.