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    Danzas Corporation challenged Seaboard Eastern Insurance Co.'s subrogation claim against Philippine Skylander. Seaboard had paid an insurance claim to International Freeport Traders Inc. (IFTI) for damaged watches that Korean Airlines transported. Without Seaboard's consent, IFTI later settled with Korean Airlines for the same loss. The court held that IFTI settling with Korean Airlines, the wrongdoer, did not defeat Seaboard's right to subrogation. Subrogation allows an insurer to recover damages paid to the insured from the liable third party.

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    Danzas Corporation challenged Seaboard Eastern Insurance Co.'s subrogation claim against Philippine Skylander. Seaboard had paid an insurance claim to International Freeport Traders Inc. (IFTI) for damaged watches that Korean Airlines transported. Without Seaboard's consent, IFTI later settled with Korean Airlines for the same loss. The court held that IFTI settling with Korean Airlines, the wrongdoer, did not defeat Seaboard's right to subrogation. Subrogation allows an insurer to recover damages paid to the insured from the liable third party.

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    32 views1 page

    DANZAS

    Uploaded by

    tantum ergum
    Danzas Corporation challenged Seaboard Eastern Insurance Co.'s subrogation claim against Philippine Skylander. Seaboard had paid an insurance claim to International Freeport Traders Inc. (IFTI) for damaged watches that Korean Airlines transported. Without Seaboard's consent, IFTI later settled with Korean Airlines for the same loss. The court held that IFTI settling with Korean Airlines, the wrongdoer, did not defeat Seaboard's right to subrogation. Subrogation allows an insurer to recover damages paid to the insured from the liable third party.

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    © All Rights Reserved
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    DANZAS CORPORATION vs.

    ABROGAR AND SEABOARD EASTERN


    INSURANCE CO., and Phil. Skylander
    G.R. No. 141462, December 15, 2005

    FACTS:
    Danzas took a shipment for ICS watches, the consignee International Freeport Traders
    Inc. (IFTI) secured Marine Risk Note from Seaboard. The Korean Airlines (KAL) plane
    carrying the goods arrived in Manila and discharged the goods to the custody of Phil.
    Skylander for safe keeping.
    On withdrawal of the shipment from Skylander, IFTI noted that the watches sustained
    tears on sides and retape of flaps, the other watches were also missing. Seaboard as
    insurer paid the losses to IFTI. Seaboard invoking its right of subrogation filed a
    complaint against Skylander for the amount of damages. While the case was still
    pending, IFTI’s
    treasurer accepted the proposal of KAL to settle consignees claim by paying the
    amount of damage. IFTI correspondingly signed a release form.
    Danzas filed a motion to dismiss the case on the ground that Seaboards demand had
    been extinguished by KAL. The trial court denied the motion to dismiss. CA also denied
    the motion for reconsideration by KAL and Skylander. Danzas contended that
    Seaboards right of subrogation was extinguished when IFTI received payment from
    KAL in settlement of its obligation.

    ISSUE:
    Whether or not Korean Airlines (KAL) (wrongdoer), by settling with IFTI (insured),
    defeats the right to subrogation of Seaboard (insurer).

    HELD:
    No.
    Manila Mahogany case: “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 right 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.”
    One of the exceptions to the rule laid down in Article 2207 CC, “if the insured by his
    own act release the wrongdoer or 3rd party liable for the loss or damage from liability,
    the insurer’s right of subrogation is defeated.”

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