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  • 379 - Vector Shipping v. American Home., 3 July 2013

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    Reynaldo Lepatan Jr.
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    This case involved an insurance company, American Home Assurance, seeking to recover funds it paid out to its insured, Caltex, after Caltex's oil cargo was lost when two ships, the MV Vector and MV Dona Paz, collided and sank in 1987. American Home filed suit in 1992 to recover from the ship owners. The Supreme Court ruled that American Home's subrogation claim, as the insurer stepping into the rights of its insured, was based in law under the Civil Code and must be brought within 10 years, so the suit was not time-barred. The Court affirmed the lower court's ruling that American Home's suit against the ship owners was not prescribed.

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    379 - Vector Shipping v. American Home., 3 July 2013

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    This case involved an insurance company, American Home Assurance, seeking to recover funds it paid out to its insured, Caltex, after Caltex's oil cargo was lost when two ships, the MV Vector and MV Dona Paz, collided and sank in 1987. American Home filed suit in 1992 to recover from the ship owners. The Supreme Court ruled that American Home's subrogation claim, as the insurer stepping into the rights of its insured, was based in law under the Civil Code and must be brought within 10 years, so the suit was not time-barred. The Court affirmed the lower court's ruling that American Home's suit against the ship owners was not prescribed.

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    © All Rights Reserved
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    32 views2 pages

    379 - Vector Shipping v. American Home., 3 July 2013

    Uploaded by

    Reynaldo Lepatan Jr.
    This case involved an insurance company, American Home Assurance, seeking to recover funds it paid out to its insured, Caltex, after Caltex's oil cargo was lost when two ships, the MV Vector and MV Dona Paz, collided and sank in 1987. American Home filed suit in 1992 to recover from the ship owners. The Supreme Court ruled that American Home's subrogation claim, as the insurer stepping into the rights of its insured, was based in law under the Civil Code and must be brought within 10 years, so the suit was not time-barred. The Court affirmed the lower court's ruling that American Home's suit against the ship owners was not prescribed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    379 - Vector Shipping v. American Home.

    , 3 July 2013

    Title
    G.R. No. 159213               July 3, 2013
    VECTOR SHIPPING CORPORATION and FRANCISCO SORIANO vs.
    AMERICAN HOME ASSURANCE COMPANY and SULPICIO LINES, INC., 

    Topic
    Subrogation
    Prescription
    Article 1144 of the New Civil Code

    Facts
    On Sept. 30, 1987 Caltex entered into a contract of Affreightment with Vector Shipping Corp. through MV Vector
    own by Fransico Soriano, Caltex insured this petroleum cargo to American Home Assurance Co. in amount of
    7,455, 421. 08 in an marine policy.

    On Dec. 20, 1987 MV Vector and MV Dona Paz own by Sulpicio Lines collided and both vessel sink, this led to
    indemnifying by American Home Assurance to pay Caltex the amount of in the said policy.

    On Mar 1992, the respondent filed an action in RTC against Vector and Suplicio Lines to recover the amount, but
    rendered that this action had prescribed under the quasi-delict and such must commence within 4 years dismissing
    the complaint by the American Home Assurance.

    Respondent then appeal to CA which rendered in favor of the respondent, but absolved the Sulpicio lines from
    recovering the amount, which then the respondent filed a motion for reconsideration praying to hold Sulpicio Lines
    and Vector to jointly liable.

    While the appeal of respondent held in abeyance on that matter, the petitioner filed an appeal to the Supreme
    Court.

    Issue
    Whether this action of respondent was already barred by prescription for bringing it only on Mar. 5, 1992.

    Ruling

    No, Vector insist insist that this action was premised on a quasi-delict or upon an injury to the rights of the plaintiff,
    which, pursuant to Article 1146 of the Civil Code, must be instituted within four years from the time the cause of
    action accrued.

    We concur with the CA’s ruling that respondent’s action did not yet prescribe

    Article 1144. 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.

    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
    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.
    In legal contemplation, subrogation is the "substitution of another person in the place of the creditor, to whose
    rights he succeeds in relation to the debt;" and is "independent of any mere contractual relations between the
    parties to be affected by it, and is broad enough to cover every instance in which one party is required to pay a
    debt for which another is primarily answerable, and which in equity and conscience ought to be discharged by the
    latter."

    This action was brought by respondent to recover from Vector and Soriano whatever it had paid to Caltex under its
    marine insurance policy.

    WHEREFORE, the Court DENIES the petition for review on certiorari

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