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Page 21

Sec 29 An intentional or fraudulent
omission, on the part of the insured, to
communicate information of matters
proving or tending to prove the falsity of a
warranty, entitles the insurer to rescind.

Sec 30 Neither party to a contract of
insurance is bound to communicate
information of the matters following,
except in answer to the inquiries of the
other:

a) Those which the other knows

b) Those which, in the exercise of ordinary
care, the other ought to know, and of
which the former has no reason to
suppose him ignorant

c) Those of which the other waives
communication

d) Those which prove or tend to prove the
existence of a risk excluded by a warranty,
and which are not otherwise material; and

e) Those which relate to a risk excepted
from the policy and which are not
otherwise material.

Sec 32 Each party to a contract of
insurance is bound to know all the general
causes which are open to his inquiry,
equally with that of the other, and which
may affect the political or material perils
contemplated,

Sec 33 The rights of information of
material facts may be waived, either by
the terms of the insurance or by neglect to
make inquiry as to such facts, where they
are distinctly implied in other facts of
which information is communicated.

Sec 34 Information of the nature or
amount of the interest of one insured need
not be communicated unless in answer to
an inquiry, except as prescribed by section
fifty-one.

Sec 35 Neither party to a contract of
insurance is bound to communicate, even
upon inquiry, information of his own
judgment upon the matters in question.

Sec 31 Materiality is to be determined not
by the event, but solely by the probable
and reasonable influence of the facts upon
the party to whom the communication is
due, in forming his estimate of the
disadvantages of the proposed contract, or
in making his inquiries.

The interim between 1978 and 1985 still
does not require that concealment be
made intentionally. Intentional and
unintentional cancel each other out
leading to just concealment. As such sinus
tachycardia should have been revealed.
(Canilang v CA)

Fact of being a mongoloid is a material
fact that needs to be stated. (Great
Pacific Life v CA ‘79)

Mere possibility of previous hypertension
not enough to establish that there was
concealment. (Great Pacific Life v CA
‘99)

Page 42

some mystery surround the loss or
damage to property. The onus probandi of
the insured is simply to establish that the
cargo was in good condition when shipped
but damaged when unloaded. From there
the burden shifts to the insurer to prove
that the loss was caused by a peril not
covered by the policy. As such the insurer
is liable for the fishmeal (Filipino
Merchants v CA).

Measure of indemnity

The policy’s valuation is binding upon the
parties. BUT if the item insured was
hypothecated by bottomry or respondentia
before the insurance and without the
knowledge of the insured then the insured
may show the value of the thing based on
the hypothecation. A fraudulent valuation
entitles the insurer to rescission (Sec
156).

In case of partial loss, the insurer is only
liable to a proportion of the amount
insured as the loss bears to the value of
the property insured (Sec 157). In other
words, all marine insurers have an implicit
co-insurance clause.

However if profits are separately insured
then a partial loss would entitle the
insured to a proportion of the expected
profits as the loss bears to value of the
thing insured (Sec 158). In this case there
is no longer an implicit co-insurance
clause.

Sec 159 In case of a valued policy of
marine insurance on freightage or cargo, if

a part only of the subject is exposed to the
risk, the evaluation applies only in
proportion to such part.

Profits that are valued and insured are
conclusively presumed to be lost upon the
loss of the property from which they are
expected to arise and the valuation fixes
their amount (Sec 160).

Rules on open policy valuation does not
matter according to dean so disregard Sec
161...

Sec 162 If cargo insured against partial
loss arrives at the port of destination in a
damaged condition, the loss of the insured
is deemed to be the same proportion of
the value which the market price at that
port, of the thing so damaged, bears to the
market price it would have brought if
sound.

Sec 163 A marine insurer is liable for all
the expenses attendant upon a loss which
forces the ship into port to be repaired;
and where it is stipulated in the policy that
the insured shall labor for the recovery of
the property, the insurer is liable for the
expense incurred thereby, such expense,
in either case, being in addition to a total
loss, if that afterwards occurs.

Sec 166 In the case of a partial loss of
ship or its equipment, the old materials are
to be applied towards payment for the
new. Unless otherwise stipulated in the
policy, a marine insurer is liable for only

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