Section 44. A representation is to be deemed false when the facts fail to correspond with its assertions or stipulations.
What is the importance of Sec. 44?
This defines misrepresentation.
Must representation be literally true?
No. See Section 38. Representations are not required to be literally true unlike warranties which must be literally true. It is sufficient that representations are substantially true.
Is the same true in cases of marine insurance?
NO. In marine insurance, the substantial truth of a representation is NOT sufficient. Accdg. to Sec. 107, the insured is required to state the exact and whole truth in relation to all matters that he represents, or upon inquiry, discloses or assumes to disclose.
When will a representation relied upon avoid a policy?
In order that a representation shall avoid a policy, it must be relied upon and be falise in a substantial and material respect.
Section 45. If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false. The right to rescind granted by this Code to the insurer is waived by the acceptance of premium payments despite knowledge of the ground for rescission. (As amended by Batasang Pambansa Blg. 874)
What does this section provide?
It provides that the falsity of a representation entitles the injured party to rescind the contract from the time when the representation becomes false. And ordinarily, under this section, fraudulent intent is IMMATERIAL. In other words, the injured party can rescind the contract of insurance where there is a misrepresentation even without fraud. And not that the false representation MUST be material.