Harding vs. Commercial Union Assurance, 38 Phil. 464 (1918)

Topic : Parties – Others

In 1916, Mr Harding gifted his wife a Studebaker automobile. While being repaired in Luneta Garage, Mrs Harding insured the automobile with the latter (Smith Bell local agent of Commercial) for P150 and declared the amount of mobile being P3000.  The said assessment was estimated by Mr. Server, Luneta Garage’s manager.

The automobile was totally destroyed by fire; the plaintiff, Mrs. Henry E. Harding furnished the defendant the proof and performed all conditions of said policy.  

HOWEVER Defendant refused to pay and prayed that the policy be declared null and void on the ground that (1) the petitioner had misrepresented herself to be the owner of the automobile and deceived the defendant to issue the said policy of insurance; (2) that under the Civil Code, “All gifts between spouses during the marriage shall be void and (3) the car’s present value was only 2.8T and not 3T.


WON the defendant’s contention that policy shall be declared null and void on the ground of prohibition provided in Art 1334 Civil Code that  “All gifts between spouses during the marriage shall be void”

(1) NO. They are not in a position to challenge the validity of the transfer, if it may be called such, They bore absolutely no relation to the parties to the transfer at the time it occurred and had no rights or interests inchoate, present, remote, or otherwise, in the property in question at the time the transfer occurred. Although certain transfers from husband to wife or from wife to husband are prohibited in the article referred to, such prohibition can be taken advantage of only by persons who bear such a relation to the parties making the transfer or to the property itself that such transfer interferes with their rights or interests. Unless such a relationship appears the transfer cannot be attacked.”

WON the mistaken cost of the automobile renders no attachment of risk.

YES. Where it appears that the proposal form, while signed by the insured, was made out by the person authorized to solicit the insurance, 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.

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