Gulf Resorts vs Philippine Charter, GR No.
155167, May 16, 2005 SECOND
DIVISION [G.R. No. 156167, May 16, 2005] Gulf RESORTS, INC., petitioner, vs.
PHILIPPINE CHARTER INSURANCE CORPORATION, respondent
FACTS: Gulf Resort is the owner of the Plaza Resort and had its properties in said
resort insured originally with the AHCA-AU. In the first four insurance policies issued
by AHCAIU the risk of loss from earthquake shock was extended to only the plaintiff’s
two swimming pools. Subsequently, AHAC-AIU issued in the plaintiff’s favor a
policy, the earthquake endorsement clause was deleted. Gulf Resorts agreed to
insure with Philippine Charter Insurance Corporation the properties covered by
AHACAIU provided that the policy wording and rates in the said policy be copied in the
policy to be issued by defendant. The defendant then issued a policy, which provides
that: “In consideration of the payment by the insured to the company of the sum
included additional premium the Company agrees, notwithstanding what is stated in
the printed conditions of this policy due to the contrary, that this insurance
covers loss or damage to shock to any of the property insured by this Policy
occasioned by or through or in consequence of earthquake.” In the said policy, the
word “included” was deleted. An earthquake struck Central Luzon and Northern Luzon
and the plaintiff’s properties including the two swimming pools in its Resort were
damaged. After the earthquake, petitioner advised respondent that it would be making a
claim for damages on its properties. Respondent instructed petitioner to file a formal
claim, then assigned the investigation of the claim to an independent claims adjuster.
The respondent through its adjuster, requested petitioner to submit various documents
in support of its claim. Subsequently, the adjuster rendered a decision saying “Except
for the swimming pools, all affected items have no coverage for earthquake shocks”.
Petitioner then filed its formal demand for settlement for the damage to all its properties
in the Agoo Playa Resort. The Regional Trial Court ruled in favor of respondent
stating that only the 2 swimming pools had earthquake shock coverage. Upon
appeal, the appellate court affirmed the decision of the trial court.
ISSUE: Whether or not the other properties in the Agoo Playa Resort are included in the
earthquake shock coverage of the said insurance policy.
HELD: NO, the judgment of the Court of Appeals was affirmed careful examination of
the premium recapitulation will shock that it is the clear intent of the parties to extend
earthquake coverage shock inly to the 2 swimming pools. Section 2(1) of the
Insurance Code defines a contract of insurance as an agreement whereby one
undertakes for a consideration to indemnify another against loss, damage or liability
arising from an unknown or contingent event. Thus, an insurance contract exists where
the following elements concur: 1. The insured has an insurable interest; 2. The insured
is subject to a risk of loss by the happening of the designated peril; 3. The insurer
assumes the risk; 4. Such assumption of risk is part of a general scheme to distribute
actual losses among a large group of persons bearing a similar risk; and 5. In
consideration of the insurer's promise, the insured pays a premium.
An insurance premium is the consideration paid an insurer for undertaking to indemnify
the insured against a specified peril. In fire, casualty, and marine insurance, the
premium payable becomes a debt as soon as the risk attaches. In the subject policy,
no premium payments were made with regard to earthquake shock coverage,
except on the two swimming pools. There is no mention of any premium payable for
the other resort properties with regard to earthquake shock. This is consistent with the
history of petitioner’s previous insurance policies from AHAC-AIU. In sum, there is no
ambiguity in the terms of the contract and its riders. Petitioner cannot rely on the
general rule that insurance contracts are contracts of adhesion which should be liberally
construed in favor of the insured and strictly against the insurer company which usually
prepares it. A contract of adhesion is one wherein a party, usually a corporation,
prepares the stipulations in the contract, while the other party merely affixes his
signature or his "adhesion" thereto. Through the years, the courts have held that in
these types of contracts, the parties do not bargain on equal footing, the weaker party's
participation being reduced to the alternative to take it or leave it. Thus, these contracts
are viewed as traps for the weaker party whom the courts of justice must protect.
Consequently, any ambiguity therein is resolved against the insurer, or construed
liberally in favor of the insured. Hence, the judgment of the Court of Appeals was
affirmed.
Manila Mahogany Manufacturing Corp. vs. CA, GR L-52756, Oct. 12, 1987
FACTS:
Petitioner insured its Mercedes Benz sedan with respondent Zenith Insurance
Corporation. The insured vehicle was bumped and damaged by a truck owned by San
Miguel Corporation. The respondent company paid petitioner Php 5,000.00 for
settlement and the petitioner’s general manager executed a Release of Claim,
subrogating respondent company to all its right to action against San Miguel
Corporation. Zenith Insurance Company wrote Insurance Adjusters, Inc. to demand
reimbursement from San Miguel Corporation of the amount it had paid the petitioner.
However, Insurance Adjusters, Inc. refused the reimbursement because San Miguel
Corporation had already paid petitioner P4,500.00 for the damages to petitioner's motor
vehicle, as evidenced by a cash voucher and a Release of Claim executed by the
General Manager of petitioner discharging San Miguel Corporation from "all actions,
claims, demands the rights of action that now exist or hereafter develop arising out of or
as a consequence of the accident." Now, the respondent insurance company demanded
from the petitioner reimbursement of the sum of Php 4,500.00paid by San Miguel
Corporation and the petitioner refused to pay the said amount. The respondent filed a
suit against the petitioner and the court ruled in favor of the respondent. On appeal the
Court of First Instance of Manila affirmed the City Court's decision, which CFI decision
was affirmed by the Court of Appeals, with the modification that petitioner was to pay
respondent the total amount of P5,000.00 that it had earlier received from the
respondent insurance company
ISSUE:
WON the Zenith Insurance Company is entitled for the recovery of the sum of Php
5,00.00 paid by Sang Miguel Corporation to the petitioner?
HELD: Yes, the respondent is entitled for the recovery of the sum of Php 5,000.00 paid
by San Miguel Corporation to the petitioner. The court ruled that, under Art. 2207 of the
Civil Code,to the effect that if the amount paid by an insurance company does not fully
cover the loss, the aggrieved party shall be entitled to recover the deficiency from the
person causing the loss, petitioner claims a preferred right to retain the amount coming
from San Miguel Corporation, despite the subrogation in favor of Private respondent.
Although petitioners right to file a deficiency claim against San Miguel Corporation is
with legal basis, without prejudice to the insurer's right of subrogation, nevertheless
when Manila Mahogany executed another release claim discharging San Miguel
Corporation from "all actions, claims, demands and rights of action that now exist or
hereafter arising out of or as a consequence of the accident" after the insurer had paid
the proceeds of the policythe compromise agreement of P5,000.00 being based on the
insurance policy-the insurer is entitled to recover from the insured the amount of
insurance money paid . Since petitioner by its own acts released San Miguel
Corporation, thereby defeating private respondents, the right of subrogation, the right of
action of petitioner against the insurer was also nullified. Otherwise stated: private
respondent may recover the sum of P5,000.00 it had earlier paid to petitioner. The right
of subrogation can only exist after the insurer has paid, otherwise the insured will be
deprived of his right to full indemnity. If the insurance proceeds are not sufficient to
cover the damages suffered by the insured, then he may sue the party responsible for
the damage for the remainder. To the extent of the amount he has already received
from the insurer enjoy's the right of subrogation.
Since the insurer can be subrogated to only such rights as the insured may have,
should the insured, after receiving payment from the insurer, release the wrongdoer
who caused the loss, the insurer loses his rights against the latter. But in such a case,
the insurer will be entitled to recover from the insured whatever it has paid to the latter,
unless the release was made with the consent of the insurer.
Federal Express Corporation v. American Home Assurance Company
G.R. No. 150094, 18 August 18 2004, 437 SCRA 50
FACTS:
Shipper SMITHKLINE USA delivered to carrier Burlington Air Express, an agent of
herein petitioner, a cargo shipment, insured with respondent which consist of 109
cartons of veterinary biological for delivery to consignee SMITHKLINE and French
Overseas Company in Makati City with the words, “REFRIGERATE WHEN NOT IN
TRANSIT” and “PERISHABLE” stamp marked on its face. However, 12 days after the
cargoes arrived in Manila, it was found out that the same were stored only in a room
with 2 air conditioners running in the warehouse of Cargohaus Inc., to cool the
place instead of a refrigerator.
As a consequence of the result of the veterinary biological test, SMITHKLINE
abandoned the shipment and, declaring “total loss” for the unusable shipment, filed a
claim with AHAC through its representative in the Philippines, The Philam Insurance
Co., Inc., (PHILAM) which recompensed SMITHKLINE for the whole insured amount.
Thereafter, PHILAM filed an action for damages against FEDEX imputing negligence on
either or both of them in the handling of the cargo where it was decided that FEDEX is
solidarily liable with Cargohaus Inc.
ISSUE:
Whether or not FEDEX is liable for damage to or loss of the insured goods?
RULING:
No. Upon receipt of the insurance proceeds, the consignee (SMITHKLINE) executed a
subrogation receipt in favor of respondents authorizing them “to file claims and begin
suit against any such carrier, person, vessel, corporation or government.” Undeniably,
the consignee had a legal right to receive the goods in the same condition it was
delivered for transport to petitioner and if that right was violated, the consignee would
have a cause of action against the person responsible therefor.
In the exercise of its subrogatory right, an insurer may proceed against an erring carrier
and to all intents and purposes, it stands in the place and in substitution of the
consignee.
Keppel Cebu Shipyard Inc. vs. Pioneer Insurance and Surety Corporation G.R.
Nos. 180880-81 G.R. Nos. 180896-97 September 25, 2009
Facts: KCSI and WG&A Jebsens Shipmanagement, Inc. (WG&A) executed a Ship
Repair Agreement wherein KCSI would renovate and reconstruct WG&A’s M/V
"Superferry 3". Prior to the execution of the Shiprepair Agreement, "Superferry 3" was
already insured by WG&A with Pioneer for US$8,472,581.78. In the course of its repair,
M/V "Superferry 3" was gutted by fire. WG&A declared the vessel’s damage as a "total
constructive loss" and, hence, filed an insurance claim with Pioneer. Pioneer paid the
insurance claim of WG&A in the amount of US$8,472,581.78. WG&A, in turn, executed
a Loss and Subrogation Receipt in favor of Pioneer. Armed with the subrogation receipt,
Pioneer tried to collect from KCSI, but the latter denied any responsibility for the loss of
the subject vessel. Pioneer, on August 7, 2000, filed a Request for Arbitration before the
Construction Industry Arbitration Commission (CIAC). Pioneer contends that it is the
real party in interest in this case and that Pioneer has been subrogated to the claim of
its assured. Pioneer argued that Payment Operates as Equitable Assignment of Rights
to Insurer and that the Right of Subrogation Entitles Insurer to Recover from the Liable
Party.
Issue: Whether or not the subrogation was proper?
Ruling: Yes, subrogation was proper. The Loss and Subrogation Receipt issued by
WG&A to Pioneer is the best evidence of payment of the insurance proceeds to the
former, and no controverting evidence was presented by KCSI to rebut the presumed
authority of the signatory to receive such payment. Article 2207 of the Civil Code
provides “If the plaintiff’s property has been insured and he has received indemnity from
the insurance company for the injury or loss arising out of the wrong or breach of
contract complained of, the insurance company shall be subrogated to the rights of the
insured against the wrongdoer or the person who has violated the contract. If the
amount paid by the insurance company does not fully cover the injury or loss, the
aggrieved party shall be entitled to recover the deficiency from the person causing the
loss or injury.”
Subrogation is the substitution of one person by another with reference to a lawful claim
or right, so that he who is substituted succeeds to the rights of the other in relation to a
debt or claim, including its remedies or securities.
The principle covers a situation wherein an insurer has paid a loss under an insurance
policy is entitled to all the rights and remedies belonging to the insured against a third
party with respect to any loss covered by the policy. It contemplates full substitution
such that it places the party subrogated in the shoes of the creditor, and he may use all
means that the creditor could employ to enforce payment. We have held that payment
by the insurer to the insured operates as an equitable assignment to the insurer of all
the remedies that the insured may have against the third party whose negligence or
wrongful act caused the loss. The right of subrogation is not dependent upon, nor does
it grow out of, any privity of contract. It accrues simply upon payment by the insurance
company of the insurance claim. The doctrine of subrogation has its roots in equity. It is
designed to promote and to accomplish justice; and is the mode that equity adopts to
compel the ultimate payment of a debt by one who, in justice, equity, and good
conscience, ought to pay.
Malayan Insurance vs Alberto, GR 194320, Feb. 1, 2012
FACTS: An accident occurred at the corner of EDSA and Ayala Avenue, involving four
vehicles: a Nissan Bus operated by Aladdin Transit; an Isuzu Tanker; a Fuzo Cargo
Truck; and a Mitsubishi Galant. A Police Report was issued regarding the incident by
the on-the-spot investigator, SPO1 Dungga. The Isuzu Tanker was in front of the
Mitsubishi Galant with the Nissan Bus on their right side shortly before the vehicular
incident. All three vehicles were at a halt along EDSA facing the south direction when
the Fuzo Cargo Truck simultaneously bumped the rear portion of the Mitsubishi Galant
and the rear left portion of the Nissan Bus. Due to the strong impact, these two vehicles
were shoved forward and the front left portion of the Mitsubishi Galant rammed into the
rear right portion of the Isuzu Tanker. Before the incident, Malayan Insurance issued
Car Insurance Policy in favor of First Malayan Leasing and Finance Corporation (the
assured), insuring the Mitsubishi Galant against third party liability, own damage and
theft, among others. Having insured the vehicle against such risks, Malayan Insurance
claimed in its Complaint that it paid the damages sustained by the assured amounting to
P 700,000. Malayan Insurance argues that it has been subrogated to the rights and
interests of the assured by operation of law upon its payment to the latter, Malayan
Insurance sent several demand letters to Alberto and Reyes, the registered owner and
the driver, of the Fuzo Cargo Truck, requiring them to pay the amount it had paid to the
assured. However they refused, hence Malayan Insurance filed a complaint for
damages for gross negligence against respondents.
The trial court ruled in favor of Malayan Insurance and declared respondents liable for
damages. The CA, reversed and set aside the Decision of the trial court and ruled in
favor of respondents.
ISSUE: WoN there is a valid subrogation?
RULING: The Court ruled that there is a valid subrogation. Malayan Insurance
presented the claim check voucher and the Release of Claim and Subrogation Receipt
proving that it had indeed P700,000 to the assured. Hence, there is a valid subrogation
in the case at bar. As explained in Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and
Surety Corporation:
“Subrogation is the substitution of one person by another with reference to a lawful
claim or right, so that he who is substituted succeeds to the rights of the other in relation
to a debt or claim, including its remedies or securities. The principle covers a situation
wherein an insurer has paid a loss under an insurance policy is entitled to all the rights
and remedies belonging to the insured against a third party with respect to any loss
covered by the policy. It contemplates full substitution such that it places the party
subrogated in the shoes of the creditor, and he may use all means that the creditor
could employ to enforce payment.”
The payment by the insurer to the insured operates as an equitable assignment to the
insurer of all the remedies that the insured may have against the third party whose
negligence or wrongful act caused the loss. The right of subrogation is not dependent
upon, nor does it grow out of, any privity of contract. It accrues simply upon payment by
the insurance company of the insurance claim.
ASIAN TERMINALS, INC., vs. FIRST LEPANTO-TAISHO INSURANCE
CORPORATION G.R. No. 185964, 16 June 2014
FACTS: A shipment of 3,000 bags of sodium tripolyphosphate arrived in Manila through
COSCO and was discharged into the possession and custody of ATI, a domestic corpor
ation engaged in arrastre business. The shipment remained for quite some time at ATI’s
storage area until it was withdrawn by broker, PROVEN, on for delivery to the consigne
e. Upon receipt of the shipment, it was found out that the delivered goods incurre
d shortages and spillage for a loss/damage valued at P166,772.41. GASI sought re
compense from COSCO, thru its Philippine agent SMITH BELL, ATI and PROVEN but
was denied. Hence, it pursued indemnification from the shipment’s insurer, FIRST LEP
ANTO. As subrogee, FIRST LEPANTO demanded from COSCO, its shipping agenc
y in the Philippines, SMITH BELL, PROVEN and ATI, reimbursement of the amoun
t it paid to GASI. ATI and PROVEN denied liability for the lost/damaged shipment and
claimed that it exercised due diligence and care in handling the same.
MeTC dismissed the case. On appeal, the Regional Trial Court (RTC) reversed the MeT
C’s findings. ATI sought recourse with the CA challenging the RTC’s finding that FI
RST LEPANTO was validly subrogated to the rights of GASI with respect to the lo
st/damaged shipment. ATI argued that there was no valid subrogation because FIRST
LEPANTO failed to present a valid, existing and enforceable Marine Open Policy or in
surance contract. ATI reasoned that the Certificate of Insurance or Marine Cover Note
submitted by FIRST LEPANTO as evidence is not the same as an actual insurance cont
ract.
ISSUE:
Whether or not the non
presentation of an insurance contract will bar a subrogee from collecting reimbursement
HELD:
No, Non-presentation of the insurance contract is not fatal to FIRST LEPANTO’s c
ause of action for reimbursement as subrogee. Subrogation is the substitution of on
e person in the place of another with reference to a lawful claim or right, so that he who
is substituted succeeds to the rights of the other in relation to a debt or claim, including i
ts remedies or securities.
In the case at bar, the Supreme Court observed that it is conspicuous from the records t
hat ATI put in issue the submission of the insurance contract for the first time bef
ore the CA. Despite opportunity to study FIRST LEPANTO’s complaint before the MeT
C, ATI failed to allege in its answer the necessity of the insurance contract. Neither was
the same considered during pretrial as one of the decisive matters in the case. Further,
ATI never challenged the relevancy or materiality of the Certificate of Insurance pr
esented by FIRST LEPANTO as evidence during trial as proof of its right to be su
brogated in the consignee’s stead. Since it was not agreed during the pre-trial procee
dings that FIRST LEPANTO will have to prove its subrogation rights by presenting a cop
y of the insurance contract, ATI is barred from pleading the absence of such contra
ct in its appeal. It is imperative for the parties to disclose during pre-trial all issues they
intend to raise during the trial because, they are bound by the delimitation of such issue
s. The determination of issues during the pre-trial conference bars the consideration of
other questions, whether during trial or on appeal.
Aboitiz Shipping Corp. v. Insurance Co. of North America
G.R. No. 168402, 6 August 2008
FACTS:
MSAS Cargo International Limited and/or Associated and/or Subsidiary Companies
(MSAS) procured an “all-risk” marine insurance policy from ICNA UK Limited of
London for its cargo, consisting of wooden work tools and workbenches
purchased by consignee Science Teaching Improvement Project (STIP) which was
later on received by Aboitiz and shipped to Cebu. However upon arrival, the checker
noted that the crates were slightly broken or cracked at the bottom causing the
cargo to be withdrawn by the representative of the consignee, STIP and delivered
to Don Bosco Technical High School, Punta Princesa, Cebu City where it was received
by Mr. Bernhard Willing who later on reported the damage to Aboitiz
Consignee filed a claim against ICNA who then paid consignee and a subrogation
receipt was duly signed by Willing. ICNA then advised Aboitiz of the receipt signed
in its favor but received no reply so it filed for collection at the RTC.
ISSUE:
Whether or not ICNA can claim under the right of subrogation.
RULING:
Yes. Only when that corporation is “transacting” or “doing business” in the country
with a license necessary before it can institute suits. It may, however, bring suits on
isolated business transactions, which is not prohibited under Philippine Law. The policy
benefits any subsequent assignee, or holder, including the consignee, who may file
claims on behalf of the assured.
[ G.R. No. 223377, June 10, 2020 ]
2100 CUSTOMS BROKERS, INC., PETITIONER, VS. PHILAM INSURANCE
COMPANY [NOW AIG PHILIPPINES INSURANCE INC.], RESPONDENT.
DECEMBER 1, 2020
FACTS:
On February 27, 2001, Ablestik Laboratories (Ablestik) placed two (2)
cardboard boxes containing 63 jars of Ablebond Adhesive on board Japan
Airlines (JAL) in Los Angeles, California, United States of America.
The goods were insured with respondent Philam Insurance Company (Philam;
now AIG PHILIPPINES INSURANCE, INC.) against all risks per Marine Cargo
Certificate 08010121549 and Open Policy Number 9595292.
At 2:47 p.m. on March 2, 2001 (Friday), TSPIC notified 2100 CBI that the
shipment had arrived. TSPIC allegedly forwarded to 2100 CBI the Packing
List from Ablestik indicating "1 Year @-40C or colder/ Dry ice shipment" and
the Shipment Handling Instructions from Ablestik stating "SHIPMENTS
CONTAINING DRY ICE ARE PERISHABLE AND MUST DELIVER TO OUR
CUSTOMER WITHIN 72 HOURS. DO NOT DELAY." xxxx
SPIC also sent an extra copy of Airway Bill with "freight collect" stamped on its
face which meant that freight charges must be paid to JAL before it could
release the original copy of Airway Bill. This is required to process the
discharge of the shipment from the custody of the Bureau of Customs (BOC).
o TSPIC informed 2100 CBI that the latter will advance the necessary funds
for the freight charges in the amount of P14,672.00. Since it was already
past 3 p.m. on a Friday, the banks were already closed, and there were
no available signatories to sign the checks. The freight charges were
only settled on March 5, 2001.
Five days after the date of arrival of the shipment in Manila, 2100 CBI
delivered the cargo to TSPIC. Upon receipt of the goods, TSPIC's
representatives found that the dry ice stuffed inside the boxes have
melted due to the delay in the delivery as shown in the Damage Report
and photographs.
TSPIC filed a claim against 2100 CBI for the value of the shipment but the
latter refused to pay. 2100 CBI contended that the delay in the delivery
of the goods was due to TSPIC's failure to give pre-alerts as to the
expected arrival thereof and TSPIC's failure to pay the freight
charges on time.
Philam paid the insurance claim of TSPIC. On July 30, 2001, a
subrogation receipt for Claim No. 200140080A was executed certifying
that Philam paid the insurance claim of TSPIC.
Thereafter, Philam filed a claim for reimbursement against 2100 CBI but
its claim was denied. Hence, Philam filed a complaint for damages before
the MeTC of Makati City.
METC: Ordered 2100 CBI to pay Philam damages. It held that, as
customs broker, 2100 CBI is regarded as a common carrier because
transportation of goods is an integral part of its business.
RTC: affirmed the ruling of the MeTC.
CA: denied the petition of 2100 CBI and affirmed the ruling of the RTC.
Moreover, the CA found no merit in 2100 CBI's contention that there was
no valid subrogation. The goods were insured with Philam against all risks
pursuant to Marine Cargo Certificate and Open Policy Number.
Contentions of 2100 CBI: argues that it was incumbent upon Philam to
show that the alleged damage was within the coverage of the supposed
insurance with TSPIC. It posits that the Marine Cargo Certificate, by
itself, does not show the scope of coverage over the subject goods.
The contract of insurance must be presented to prove the extent of
its coverage.
ISSUE:
Whether the insurance policy must be presented to establish the liability of the
common carrier to Philam (YES)
Whether 2100 CBI was negligent in handling the shipment of TSPIC, thus
making it liable for damages. (NO)
Whether Philam is entitled to be subrogated to the rights of the insured (TSPIC)?
(NO)
RULING:
WHEREFORE, premises considered, the petition is GRANTED. Civil Case No.
78072 filed against petitioner 2100 Customs Brokers, Inc. is hereby DISMISSED.
SO ORDERED.
RATIO:
2100, a customs broker, is a common carrier;
A customs broker has been regarded as a common carrier because
transportation of goods is an integral part of its business. We have already
settled in a number of cases that a customs broker is a common carrier because
it undertakes to deliver goods for a pecuniary consideration.
No matter how minimal or short the period the goods are placed in the custody of
2100 CBI, it remains settled that the participation of 2100 CBI is indispensable to
the delivery of the goods to TSPIC. For undertaking the transport of the cargo
from Paircargo warehouse to TSPIC's warehouse for a fee, 2100 CBI is
considered a common carrier.
Presentation of the insurance policy is necessary;
Noticeably, Open Policy Number 9595292 was not presented during trial nor on
appeal. From the start, 2100 CBI had already raised the issue of non-
presentation of the insurance policy yet it was never produced by Philam.
The original copy of the insurance policy is the best proof of its contents.
The contract of insurance must be presented in evidence to indicate the
extent of its coverage.
o At most, Marine Cargo Certificate No. 080101215475 and the subrogation
receipt may be used to establish the relationship between the insurer and
the consignee and the amount paid to settle the claim. The subrogation
receipt, by itself, is not sufficient to prove a claim holding an insurer liable
for damage sustained by an insured item. These documents are not
sufficient to prove that the damage to the cargo is compensable under the
insurance policy chargeable against 2100 CBI.
As an actionable document, the insurance policy must be presented in
order to determine whether the damage sustained by the cargo of
TSPIC is caused by a peril or risk covered by the policy.
In the absence of proof of the contents of the policy confirming that the
damage to the cargo is covered by the insurance policy chargeable
against 2100 CBI, Philam cannot hold 2100 CBI responsible for the
damage to the cargo. Philam's failure to present the original copy is fatal
to its claim against 2100 CBI as this document is the primary basis for its
claim of right to subrogation. Had a copy of the insurance policy been
presented by Philam, it would have clearly delineated the scope of its
coverage. We cannot ignore the possibility that the insurance policy did
not cover all phases of handling the shipment.
2100 CBI is not negligent in handling the shipment of TSPIC;
Assuming arguendo that the risk or peril that caused the damage to the
cargo is covered by the insurance policy, We find that 2100 CBI was not
negligent in handling the shipment of TSPIC.
It is clear that there is no need to rely on the presumption of the law that a
common carrier is presumed to have been at fault or have acted
negligently in case of damaged goods. This is because the delay in the
release of the goods was through no fault of 2100 CBI. The damage was
caused by the late payment of the funds needed for the release of the
goods from the custody of BOC which was originally TSPIC's
responsibility. It must be noted that while waiting for the freight charges to
be settled, 2100 CBI did not have custody over the shipment.
o It is clear that the only handling instruction 2100 CBI received was to
"PLS. PUT INTO (sic) COOL ROOM UPON ARRIVAL," which was stated
in Airway Bill. 2100 CBI could not have undertaken precautionary
measures nor implement handling instructions because it did not have
possession of the cargo until 2:00 a.m. of March 6, 2001 - when the goods
were released by the BOC.
Based on the evidence presented, Philam failed to establish that
negligence in the handling of the shipment could be attributed to 2100
CBI.
Accordingly, as an insurer who pays the insured for loss or liability
not proven to be compensable under the subject policy, Philam is
not subrogated to the rights of TSPIC.
Case: Standard Insurance vs. Cuaresma, GR 200055, Sept. 10, 2014
Topic: Right of subrogation (Art. 2207, Civil Code)
DOCTRINE:
Subrogation is ultimately the substitution of one person in the place of another
with reference to a lawful claim or right, so that he who is substituted succeeds
to the rights of the other in relation to a debt or claim, including its remedies or
securities. The rights to which the subrogee succeeds are the same as, but not
greater than, those of the person for whom he is substituted, that is, he cannot
acquire any claim, security or remedy the subrogor did not have.
A subrogee cannot succeed to a right not possessed by the subrogor. A
subrogee, in effect, steps into the shoes of the insured and can recover only if
the insured likewise could have recovered.
PLAINTIFFS DEFENDANTS
STANDARD INSURANCE CO., ARNOLD CUARESMA AND JERRY B.
INC., CUARESMA,
ACTION SEQUENCE: NA
FACTS:
1. On March 20, 2004, two vehicles, one driven by Jefferson Cham and
insured with petitioner Standard Insurance Co., Inc., and the other owned
by respondent Arnold Cuaresma and driven by respondent Jerry B.
Cuaresma, figured in an accident at North Avenue, Quezon City.
Consequently, the damage on the vehicle driven by Cham was repaired, the
cost of which was borne by the petitioner.
2. Cham then executed a Release of Claim in favor of the petitioner
subrogating the latter to all his rights to recover on all claims, demands,
and rights of action on account of the loss, damage, or injury sustained
as a consequence of the accident from any person liable thereto. Based
on said document, the petitioner, in its letter dated April 15, 2004 addressed to
respondents, demanded the payment of the sum spent on repairing the vehicle
driven by Cham.
3. Petitioner, claiming that respondents collided with Cham's vehicle in a reckless
and imprudent manner, filed a Complaint for Sum of Money with the MeTC of
Manila against respondents
4. To prove the allegations in its complaint, herein petitioner presented
testimonies of its assured and its Assistant Vice-President, the Traffic Accident
Investigation Report, and documents evidencing the assured's insurance policy
with petitioner as well as the payment of repair expenses.
5. The MeTC ruled in favor of the petitioner
6. The RTC, however, reversed the ruling of the MeTC. The RTC found that not
only were there inconsistencies in the evidence presented by petitioner as to its
corporate identity as well as the amount of the supposed cost of
indemnification, but petitioner also failed to sufficiently prove that the proximate
cause of the damage incurred by Cham's vehicle was respondents' fault or
negligence.
7. On appeal, the CA likewise found that the evidence proffered by petitioner is
insufficient to support its averment of negligence. Consequently, it affirmed the
RTC's Decision and further denied the petitioner's Motion for Reconsideration
in its Resolution dated January 16, 2012.
ISSUE/S:
Whether or not the petitioner's argument that its right to be reimbursed for the
repair is by operation of law upon mere proof of payment of the insurance
claim?
RULING:
No. A determination of the liability of respondents vis-a-viz the assured in the
vehicular collision must first be made, for petitioner cannot acquire any claim, security
or remedy its assured did not have. Considering, however, the insufficiency of
preponderant evidence attributing negligence on respondents resulting in the damage
sustained by the assured's vehicle, it will be unfair to hold respondents liable for
the same, payment by petitioner of its costs, notwithstanding.
DISPOSITIVE PORTION:
WHEREFORE, premises considered, the instant petition is DENIED. The Decision
and Resolution, dated June 22, 2011 and January 16, 2012, respectively, of the Court
of Appeals in CA-G.R. SP No. 117785 are hereby AFFIRMED.
NOTES: NA
Pan Malayan Insurance Corporation v. Court of Appeals
G.R. No. 81026 | April 3, 1990 | J. Cortes
Facts:
Canlubang Automotive Resources Corp. obtained from PanMalay a motor
vehicle insurance policy for its Mitsubishi Colt Lancer.
While the policy was still in effect, the insured car was allegedly hit by a pick-up
owned by Erlinda Fabie but driven by another person. The car suffered
damages in the amount of P42,000.
PanMalay defrayed the cost of repair of the insured car. It then demanded
reimbursement from Fabie and her driver of said amount, but to no avail.
PanMalay filed a complaint for damages with the RTC of Makati against Fabie
and the driver. It averred that the damages caused to the insured car was settled
under the “own damage” coverage of the insurance policy.
Private respondents filed a motion to dismiss alleging that PanMalay had no
cause of action since the “won damage” clause of the policy precluded
subrogation under Art. 2207 of the Civil Code. They contended that
indemnification under said article is on the assumption that there was no
wrongdoer or no 3rd party at fault.
The RTC dismissed PanMalay’s complaint and ruled that payment under the
“own damage” clause was an admission by the insurer that the damage
was caused by the assured and/or its representatives.
CA affirmed but on different ground. Applying the ejusdem generis rule, CA held
that Section III-I of the policy, which was the basis for the settlement of the claim
against insurance, did not cover damage arising from collision or
overturning due to the negligence of 3rd parties as one of the insurable
risks.
Issue:
Was PanMalay subrogated to the rights of Canlubang against the driver and his
employer?
Ruling: Yes.
Right of Subrogation of the Insurer. Article 2207 of the Civil Code is founded on the
well-settled principle of subrogation. If the insured property is destroyed or damaged
through the fault or negligence of a party other than the assured, then the insurer, upon
payment to the assured, will be subrogated to the rights of the assured to recover from
the wrongdoer to the extent that the insurer has been obligated to pay. Payment by the
insurer to the assured operates as an equitable assignment to the former of all
remedies which the latter may have against the third party whose negligence or
wrongful act caused the loss. The right of subrogation is not dependent upon, nor does
it grow out of, any privity of contract or upon written assignment of claim. It accrues
simply upon payment of the insurance claim by the insurer.
There are three exceptions to this rule:
1. where the assured by his own act releases the wrongdoer or third party liable for the
loss or damage
2. where the insurer pays the assured the value of the lost goods without notifying the
carrier who has in good faith settled the assured's claim for loss
3. where the insurer pays the assured for a loss which is not a risk covered by the
policy, thereby effecting "voluntary payment"
None of these exceptions are present in this case.
As to the trial court’s ruling: When PanMalay utilized the phrase "own damage" — a
phrase which is not found in the insurance policy — to define the basis for its settlement
of Canlubang's claim under the policy, it simply meant that it had assumed to
reimburse the costs for repairing the damage to the insured vehicle. It is in this
sense that the so-called "own damage" coverage under Section III of the insurance
policy is differentiated from Sections I and IV-1 which refer to "Third Party Liability"
coverage (liabilities arising from the death of, or bodily injuries suffered by, third parties)
and from Section IV-2 which refer to "Property Damage" coverage (liabilities arising
from damage caused by the insured vehicle to the properties of third parties).
As to the Court of Appeals’ ruling: The Court of Appeals' ruling on the coverage of
insured risks stems from an erroneous interpretation of the provisions of the policy. It
violates a fundamental rule on the interpretation of property insurance contracts where
interpretation should be liberally in favor of the assured and strictly against the insurer in
cases of disagreement between the parties. The meaning advanced by PanMalay
regarding the coverage of the policy is undeniable more beneficial to Canlubang than
that insisted upon by the CA. In any case, the very parties to the policy were not shown
to be in disagreement regarding the meaning and coverage of Section III-I. Hence, it
was improper for CA to assert its own interpretation of the contract that is
contrary to the clear understanding and intention of the parties to it.
Even assuming for the sake of argument that the insurance policy does not cover
damage to the insured vehicle caused by negligent acts of third parties, and that
PanMalay's settlement of Canlubang's claim for damages allegedly arising from a
collision due to private respondents' negligence would amount to unwarranted or
"voluntary payment", insurer may still recover from the third party responsible for
the damage to the insured property under Article 1236 of the Civil Code.
ORIENTAL ASSURANCE CORPORATION v. MANUEL ONG GR No. 189524, 2017-
10-11
FACTS: JEA Steel imported from South Korea 72 aluminum-zinc-alloy-coated steel
sheets in coils. The coils were discharged and stored in Pier 9 under the custody of the
arrastre contractor, Asian Terminals, Inc. From the storage compound of Asian
Terminals, the coils were loaded on the trucks of Manuel Ong (Ong) and delivered to
JEA Steel. Eleven of these coils ''were found to be in damaged condition, dented
or their normal round shape deformed." JEA Steel filed a claim with Oriental. Oriental
paid JEA Steel the sum of P521,530.16 and subsequently demanded indemnity from
Ong and Asian Terminals (respondents), but they refused to pay. Oriental filed a
Complaint before the Regional Trial Court of Manila for sum of money against
respondents Ong countered that the 11 coils were already damaged when they were
loaded on board his trucks and transported to the consignee. Asian Terminals claimed
that it exercised due diligence in handling the cargo, that the cargo was released to
the consignee's representative in the same condition as when received from the
vessel, and that the damages were sustained while in the custody of the vessel or
the customs broker... further argued that Oriental's claim was barred for the
latter's failure to file a notice of claim within the 15-day period provided in the Gate
Pass and in Article VII, Section 7.01 of the Contract for Cargo Handling Services
(Management Contract) between the Philippine Ports Authority and Asian Terminals.
Asian Terminals added that its liability, if any, should not exceed P5,000.00, pursuant to
said Section 7.01. Regional Trial Court, Manila dismissed the complaint. Court of
Appeals dismissed Oriental’s appeal on the ground that its claim had already
prescribed. Oriental contends that it was not aware of the provisions of the Gate Pass
or the Management Contract, neither of which it was a party to. Consequently, it cannot
be bound by the stipulation limiting the liability of Asian Terminals. Asian Terminals
counters that "[t]he provisions of the Management Contract and the Gate Pass are
binding on Oriental as insurer-subrogee and successor-in-interest of the consignee."
ISSUE: Whether Oriental Assurance, who was not a party to the Gate Pass or
Management Contract, is bound by the 15-day prescriptive period fixed in them to
file a claim against the arrastre operator
RULING: YES. As subrogee, petitioner merely stepped into the shoes of the consignee
and may only exercise those rights that the consignee may have against the wrongdoer
who caused the damage.[55] "It can recover only the amount that is recoverable by
the assured."[56] And since the right of action of the consignee is subject to a
precedent condition stipulated in the Gate Pass, which includes by reference the terms
of the Management Contract, necessarily a suit by the insurer is subject to the same
precedent condition.
FILCON READY MIXED INC. V. VERGARA
JULY 15, 2020
FACTS:
Gutang is the registered owner of a Honda Civic. The vehicle was insured
with respondent UCPB General Insurance Company, Inc. (UCPB).
On November 16, 2007, the car figured in a vehicular accident in Quezon
City involving three other vehicles: a Toyota Revo, a Mitsubishi Adventure and a
cement mixer bearing owned by petitioners Filcon Ready Mixed, Inc. and
driven by Vergara.
Based on the report, Vergara left the cement mixer with its engine running
at the uphill portion of Boni Serrano Extension. It moved backward and hit the
front portion of the Adventure parked behind it. This car, in turn, hit the front portion
of the insured vehicle. The rear portion of the insured vehicle rammed into the Revo
parked behind it.
The UCPB averred that the proximate cause of the accident was Vergara's
gross negligence and lack of precaution. As a consequence, the insured vehicle got
damaged.
As Gutang's insurer, it paid the total cost of repairs to Honda. Thereafter,
Gutang executed a document captioned "Release and Discharge" which
effectively assigned to respondent all his claims against petitioners.
By virtue of this legal subrogation, respondent sent a demand letter to
petitioners, but the latter simply ignored it. Hence, UCPB was constrained to file the
present action for sum of money before the MTC.
Petitioners, on the other hand, interposed extinctive prescription as an
affirmative defense. They claimed that under Article 1146 of the Civil Code,
actions based on quasi-delict prescribes in four years. The complaint failed to
state a cause of action as UCPB failed to attach thereto proof of payment to Gutang
and to show any privity between Gutang and BPI Rental which was named as the
payee in the undated and unnotarized Release and Discharge.
The trial court dismissed the complaint on ground of prescription. Since the
accident happened on November 16, 2007, the claim should have been filed only
until November 16, 2011. Here, the claim was filed on February 1, 2012 or more
than two (2) months late.|||
Respondent moved for reconsideration which was denied. It alleged that the RTC
ignored the fact that its subrogation to the rights of Gutang was by virtue of an express
provision of law under Articles 2207 and 1144 (2) of the Civil Code stating that an
obligation created by law must be brought within ten (10) years from the time the
cause of action accrued.
ISSUES: Is respondent's action for money claims against petitioners barred by
prescription? - YES
HELD: The Petition is denied.
In the recent case of Henson v. UCPB insurance, the court overturned Vector and
held that subrogation under Article 2207 of the Civil Code only allows the insurer, as the
new creditor who assumes ipso jure the old creditor's rights without the need of any
contract, to go after the debtor. But this does not mean that a new obligation is created
between the debtor and the insurer. The insurer, as the new creditor, remains bound
by the limitations of the old creditor's claims against the debtor, which includes,
among others, the aspect of prescription. Hence, the debtor's right to invoke the
defense of prescription cannot be circumvented by the mere expedient of successive
payments of certain insurers that purport to create new obligations when, in fact, what
remains subsisting is only the original obligation||.
The Court came up with guidelines relative to the prescriptive period in cases where
the insurer is subrogated to the rights of the insured against the wrongdoer based on
a quasi-delict, thus:
For cases that were filed by the subrogee-insurer prior to the
applicability of the Vector ruling, the prescriptive period is four (4) years
from the time the tort is committed against the insured by the
wrongdoer.
The Vector doctrine, which espoused unique rules on legal
subrogation and prescription as aforedescribed, was not yet a binding
precedent at this time; hence, issues of prescription must be
resolved under the rules prevailing before Vector, which,
incidentally, are the basic principles of legal subrogation vis-à-vis
prescription of actions based on quasi-delicts.
Since the action was filed on February 1, 2012, prior to Vector, the applicable
prescriptive period is four years pursuant to Article 1146 of the Civil Code.
Respondent, therefore, had four years from November 16, 2007 when the vehicular
mishap took place or until November 16, 2011 within which to file its action for sum
of money against Vergara and his employer Filcon.
HENSON vs. UCPB GENERAL INSURANCE CO., INC GR No. 223134 August 14,
2019 J. Perlas Bernabe
FACTS: In 1999, National Arts Studio and Color Lab (NASCL) leased the right front
portion of the ground floor and the entire second floor of a building then owned by
Henson and made renovations. Meanwhile, Copylandia moved into the ground floor.
In 2006, a water leak occurred in the building and damaged Copylandia’s various
equipment, causing injury to it.
As the said equipment were insured by UCPB General Insurance, Copylandia filed a
claim. After being granted, UCPB General Insurance was subrogated to the rights
of Copylandia over all claims and demands against Henson. Subsequently, a
demand for payment was filed before the RTC but to no avail. Thus, a complaint for
damages was commenced. In 2010 however, Henson transferred the ownership of
the building to Citrinne Holdings Inc. (CHI), where he was a stockholder and the
president, this then caused the amended subject of the complaint. In its response,
CHI argued that UCPB General Insurance’s action had already prescribed since it was
based on a quasi-delict and must be brought within four (4) years from its accrual in
May of 2006. The RTC ruled in favor of the respondent by holding that since the
respondent was merely enforcing its right of subrogation, the prescriptive period
of ten (10) years should be reckoned from the date of Copylandia’s
indemnification which was in November 2006. Therefore, the claim has yet to
prescribe. The CA affirmed this decision. Hence, the present petition.
ISSUE: Whether or not respondent’s claim has yet to prescribe.
RULING: NO. However, the SC differed from the RTC reliance on the Vector ruling. The
SC held that following the principles of subrogation, the subrogee-insurer only assumes
the rights of the subroger-insured based on the latter’s original obligation with the
debtor. Under Art. 2207 of the NCC, the legal effects of subrogation are primarily
between the subrogee-insurer and the subroger-insured: by virtue of the former’s
payment of indemnity to the latter, it can acquire, by operation of law, all rights of the
subrogor insured against the debtor. The insurer only steps into the shoes of the
insured and is not superior to the rights of the insured. It only inherits the remaining
period to file an action against the wrongdoer.
However, the Court's abandonment of the Vector doctrine should be prospective in
application for the reason that judicial decisions applying or interpreting the laws or the
Constitution, until reversed, shall form part of the legal system of the Philippines.
The Court therefore sets the following guidelines:
1. For actions of such nature that have already been filed and are currently pending, the
rules on prescription prevailing at the time the action is filed would apply.
a. If the Vector doctrine was prevailing at that time, the issues of prescription must
be resolved according to the Vector parameters.
b. For cases filed by the subrogee-insurer prior to the applicability of the Vector
ruling, the prescriptive period is four (4) years from the time the tort is committed
against the insured by the wrongdoer.
2. For actions of such nature that have not yet been filed at the time of the finality of this
Decision:
a. For cases where the tort was committed and the consequent loss/injury against
the insured occurred prior to the finality of this Decision, the subrogee-insurer is
given a period not exceeding four (4) years from the time of the finality of this
Decision to file the action against the wrongdoer; provided, that in all instances,
the total period to file such case shall not exceed ten (10) years from the
timethe insurer is subrogated to the rights of the insured.
b. For cases where the tort was committed and the consequent loss/injury against
the insured occurred only upon or after the finality of this Decision, the Vector
doctrine would hold no application. The prescriptive period is four (4) years from
the time the tort is committed against the insured by the wrongdoer.
Pursuant to the guidelines stated above, specifically under guideline 1(a), the Vector
doctrine would then apply. Hence, as the amended complaint impleading petitioner
was filed on April 21, 2014, which is within ten (10) years from the time
respondent indemnified Copylandia for its injury/loss, or on November 2, 2006,
the case cannot be said to have prescribed under Vector. As such, the Court is
constrained to deny the instant petition.
]]
Vector Shipping Corporation vs. American Home Assurance Company G.R. No.
159213, July 03, 2013
Facts: On September 30, 1987, Caltex entered into a contract of affreightment with
Vector for the transport of Caltex’s petroleum cargo through the M/T Vector.
Caltex insured the petroleum cargo with respondent (American Home Assurance) for
P7,455,421.08. In the evening of December 20, 1987, the M/T Vector and the M/V Doña
Paz, the latter a vessel owned and operated by Sulpicio Lines, Inc., collided in the
open sea near Dumali Point in Tablas Strait, located between the Provinces of
Marinduque and Oriental Mindoro. The collision led to the sinking of both vessels.
The entire petroleum cargo of Caltex on board the M/T Vector perished. On July 12,
1988, respondent indemnified Caltex for the loss of the petroleum cargo in the full
amount of P7,455,421.08.
The respondent filed a complaint against Vector, Soriano, and Sulpicio Lines,
Inc. to recover the full amount of P7,455,421.08 it paid to Caltex. the RTC issued a
resolution dismissing the case on the grounds that the action is a quasi-delict and as
such must be commenced within four 4 years from the day they may be brought.
The tort complained of in this case occurred on 20 December 1987. The action arising
therefrom would under the law prescribe, unless interrupted, on 20 December 1991.
The CA reversed the decision and the defendant-appellees Vector Shipping Corporation
and Francisco Soriano are held jointly and severally liable to the plaintiff-appellant
American Home Assurance Company for the payment of P7,455,421.08 as and by way
of actual damages.
Issue: Whether the action of the respondent was already barred by prescription
Held: No, the respondent was not barred by prescription. The Supreme Court upheld
the decision of the Court of Appeals and held that the legal provision governing this
case was not Article 1146 of the Civil Code, but Article 1144 of the Civil Code, which
states:
The following actions must be brought within ten years from the time the cause of
action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
The subrogation of respondent to the rights of Caltex as the insured was by virtue of the
express provision of law embodied in Article 2207 of the Civil Code. If the insured
property is destroyed or damaged through the fault or negligence of a party other than
the assured, then the insurer, upon payment to the assured, will be subrogated to the
rights of the assured to recover from the wrongdoer to the extent that the insurer has
been obligated to pay. Payment by the insurer to the assured operates as an equitable
assignment to the former of all remedies which the latter may have against the third
party whose negligence or wrongful act caused the loss. The right of subrogation is
not dependent upon, nor does it grow out of, any privity of contract or upon
written assignment of claim. It accrues simply upon payment of the insurance
claim by the insurer
