Cases Digests in Insurance

LOADMASTERS CUSTOMS SERVICES, INC vs. GLODEL BROKERAGE CORP. and R&B INSURANCE CORP. FACTS: On Aug. 2001, the cargoes of “Columbia” were shipped on board the vessel “Richard Rey” from Leyte to Manila which arrived on the same date. Glodel (hired by Columbia to facilitate the release and withdrawal of the cargoes to its warehouses) engaged the services of Loadmasters, the petitioners herein, for the use of its trucks to transport the cargoes. The goods were delivered to their destinations except for 1 truck which failed to deliver the copper cathodes. R&B Insurance indemnified Columbia from the losses it incurred because of the aforementioned incident. On November 2003, R&B Insurance filed a complaint for damages against Loadmasters and Glodel for the reimbursement of the amount that the Insurance company has paid to Columbia. The court ruled in favor of R&B Insurance ordering Glodel to reimburse the amount sought the by former. After which, R&B Insurance and Glodel appealed to the CA which rendered its decision holding both Glodel and Loadmasters liable to the insurance company. Hence led to the present petition for review on certiorari. ISSUE: Whether or not R&B insurance may seek reimbursement from Glodel and Loadmasters. HELD: Yes. Subrogation is 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. [9] Doubtless, R&B Insurance is subrogated to the rights of the insured to the extent of the amount it paid the consignee under the marine insurance, as provided under Article 2207 of the Civil Code, which reads: ART. 2207. 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 wrong-doer 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. As subrogee of the rights and interest of the consignee, R&B Insurance has the right to seek reimbursement from either Loadmasters or Glodel or both for breach of contract and/or tort. Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the

goods transported by them according to all the circumstances of such case, as required by Article 1733 of the Civil Code. The Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo. Under Article 2194 of the New Civil Code, “the responsibility of two or more persons who are liable for a quasi-delict is solidary.” Loadmasters’ claim that it was never privy to the contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not a valid defense. It may not have a direct contractual relation with Columbia, but it is liable for tort under the provisions of Article 2176 of the Civil Code on quasidelicts which expressly provide: ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. DANZAS CORPORATION and ALL TRANSPORT NETWORK, INC., vs. HON. ZEUS C. ABROGAR, Presiding Judge of Br. 150 of Makati City, SEABOARD EASTERN INSURANCE CO., INC. and PHILIPPINE SKYLANDERS, INC., Respondents. FACTS: On February 1994, petitioner Danzas took a shipment of nine packages of ICS watches for transport to Manila. On March 1994, the Korean Airlines plane carrying the goods arrived in Manila and discharged the goods to the custody of private respondent Philippine Skylanders, Inc. for safekeeping. On withdrawal of the shipment from private respondent Skylanders’ warehouse, International Freeport Traders, Inc. (IFTI) noted that one package containing 475 watches was shortlanded while the remaining eight were found to have sustained tears on sides and the retape of flaps. On further examination and inventory of the cartons, it was discovered that 176 Guess watches were missing. Seaboard, private respondent herein, as insurer, paid the losses to IFTI. On February 23, 1995, Seaboard, invoking its right of subrogation, filed a complaint against Skylanders and Transport Network, Inc. (ATN), praying for actual damages. Petitioners impleaded Korean Airlines (KAL) as third-party defendant. While the case was pending, IFTI’s treasurer, Mary Eileen Gozon accepted the proposal of KAL to settle consignee’s claim by paying the amount of US $522.20. Later, on July 2, 1996, petitioners filed a motion to dismiss the case on the ground that private respondent Seaboard’s demand had been paid or otherwise extinguished by KAL. On February 18, 1998, the trial court issued an order denying: (1) the motion for reconsideration of the December 9, 1996 order filed by petitioners, private

respondent Skylanders and KAL; (2) the motion to dismiss filed by Skylanders and (3) petitioners’ motion for reconsideration of the November 14, 1997 order. On April 6, 1998, petitioners filed in the Court of Appeals a special civil action for certiorari under Rule 65 of the Rules of Court. On March 5, 1999, the CA dismissed the petition. Hence, this petition. ISSUE: Whether or not the private respondent’s (Seaboard) right of subrogation was extinguished when IFTI received payment from KAL in settlement of its obligation. HELD: No. The court ruled based in the case of Manila Mahogany supra, the tortfeasor San Miguel Corporation paid the insured without knowing that the insurer had already made such payment. KAL was not similarly situated, being fully aware of the prior payment made by the insurer to the consignee. Private respondent Seaboard asserts that, being in bad faith, KAL should bear the consequences of its actions. While Manila Mahogany is silent on whether the existence of good faith or bad faith on the tortfeasor’s part affects the insurer’s right of subrogation, there exists a wealth of U.S. jurisprudence holding that whenever the wrongdoer settles with the insured without the consent of the insurer and with knowledge of the insurer’s payment and right of subrogation, such right is not defeated by the settlement. Because this doctrine is actually consistent with the facts of Mahogany and helps fill a slight gap left by our ruling in that case, we adopt it now. The trial court correctly refused to dismiss the case. VECTOR SHIPPING CORPORATION AND FRANCISCO SORIANO vs. AMERICAN HOME ASSURANCE COMPANY AND SULPICIO LINES, INC., FACTS: (Petitioners) Vector was the operator of the motor tanker M/T Vector and Soriano was the registered owner of the M/T Vector. Respondent is a domestic insurance corporation. On December 20, 1987, the M/T Vector and the M/V Doña Paz (vessel owned and operated by Sulpicio Lines, Inc.) collided in the open sea near Tablas Strait, 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 P7,455,421.08.6. On March 5, 1992, 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 ruling that this action is upon a quasi-delict and as such must be commenced within four 4 years from the day they may be brought. Respondent appealed to

the CA, which promulgated its decision reversing the RTC because it was not a quasi-delict but a written contract (based on the tickets issued), hence the prescription period had not yet been barred. It ruled absolving Sulpicio Lines, Inc. of any liability to respondent, the CA held Vector and Soriano jointly and severally liable to respondent for the reimbursement of the amount of P7,455,421.08 paid to Caltex. Hence, this petition for review on certiorari. ISSUE: Whether or not the given case was already barred by prescription. HELD: No. The SC concurred with the CA’s ruling that respondent’s action did not yet prescribe. The legal provision governing this case was not Article 1146 of the Civil Code but Article 1144 of the Civil Code, which states: Article 1144. The following actions must be brought within ten years from the time the cause of action accrues:cralavvonlinelawlibrary (1) Upon a written contract;chanroblesvirtualawlibrary (2) Upon an obligation created by law;chanroblesvirtualawlibrary (3) Upon a judgment. However, the cause of action was not based upon a written contract, but upon an obligation created by law. Hence, it came under Article 1144 (2) of the Civil Code. This is because 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, to wit: Article 2207. 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. Verily, the contract of affreightment that Caltex and Vector entered into did not give rise to the legal obligation of Vector and Soriano to pay the demand for reimbursement by respondent because it concerned only the agreement for the transport of Caltex’s petroleum cargo.