THE INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. SERAFIN D.

FELICIANO AND selected the agent, thus implying that the insured could put his trust on
ANGEL, FLORENDA, EUGENIO, HERMINIO and LETICIA, all surnamed FELICIANO, him. It was the one who drafted and accepted the policy and
represented by their guardían ad litem SERAFIN D. FELICIANO, respondents. GR consummated the contract. It seems reasonable that as between the
No. 47593 13 Sept. 1941 (WENCESLAO) two of them, the one who employed and gave character to the third
person as its agent should be the one to bear the loss.
DOCTRINE
If an agent of the insurer, after obtaining from an applicant for insurance a 2. The weight of authority is that if an agent of the insurer, after obtaining
correct and truthful answer to interrogatories contained in the application for from an applicant for insurance a correct and truthful answer to
insurance, without knowledge of the applicant fills in false answers, either interrogatories contained in the application for insurance, without
fraudulently or otherwise, the insurer cannot assert the falsity of such answers as knowledge of the applicant tills in false answers, either fraudulently or
defense to liability on the policy. otherwise, the insurer cannot assert the falsity of such answers as a
defense to liability on the policy, and this is true generally without
FACTS regard to the subject matter of the answers or the nature of the agent's
 Evaristo Feliciano filed an application for insurance with petitioner duties or limitations on his authority, at least if not brought to the
Insular Life upon the solicitation of one of its agents. Two insurance attention of the applicant.
policies were issued to him in the amount of P25,000 (1st policy: P20,000
and 2nd policy: P5,000). 3. The fact that the insured did not read the application which he signed,
 Feliciano died on 29 Sept. 1935 of pulmonary tuberculosis, the is not indicative of bad faith. It has been held that it is not negligence
defendant company refused to pay on the gorund that the policies for the insured to sign an application without first reading it if the insurer
were fraudulently obtained, the insured having given false answers and by its conduct in appointing the agent influenced the insured to place
statements in the application as well as in the medical report. trust and confidence in the agent. He is justified in assuming that the
 RTC ruled in favor of the insured Feliciano. The lower court found that in agent has with equal good faith, truthfully recorded the answers given
the medical examination the results yielded that Feliciano was suffering him.
from tuberculosis at the time of his application of the insurance.
However, such fact was not disclosed in his application.
 It was further found out that Feliciano was made to sign the application
and the examiner’s report in blank and afterwards the blank spaces
therein were filled in by the agent and medical examiner who made it
appear that Feliciano was fit to be subject of an insurance
 On appeal, trial court was sustained. Now this petition alleging that CA
erred in holding that an insurance company has no right to avoid a
policy where its agent knowingly and intentionally wrote down the
answers in the application differing from those made by the insured, in
disregard of the exception that when the agent, instead of serving the
interests of his principal, acts in his own or another's interest and
adversely to that of his principal, the said principal is not bound by said
acts of the agent.

ISSUE/S
W/N the insurance company should be liable for the acts of their agents? YES.

HELD/RATIO
1. In the present case, the agent knew all the time the true state of health
of the insured. The insurer's medical examiner approved the
application knowing full well that the applicant was sick. The situation
is one in which one of two innocent parties must bear a loss for his
reliance upon a third person. In this case, it was the insurer who gave
the agent authority to deal with the applicant. It was the one who