Case Digest: Aboitiz Shipping vs. Insurance Company, G.R. No. 168402

 

Aboitiz Shipping vs. Insurance Company, G.R. No. 168402, August 08, 2008

Subject: Transportation Law

FACTS

STIP was the consignee of a cargo containing wooden tools and workbenches insured with Insurance Company of North America. The container van was shipped from Germany to Singapore, then to Manila. In Manila, the container van was received by Aboitiz Shipping and was then boarded on Aboitiz’s ship which arrived in Cebu. On August 11, 1993, the cargo was withdrawn from the port by the representative of STIP and was delivered to Don Bosco Technical School Cebu. It was received by Mr. Bernhard Willig.

On August 13, 1993, Willig called the Claims Head of Aboitiz Shipping, Mr. Mayo Perez, informing him that the cargo sustained water damage. Perez immediately went to the warehouse and checked the condition of the container and other cargoes. He found that the bottom of the crate was slightly broken but the crate had no water marks. However, he confirmed that the tools which were stored inside the crate were already corroded. In a letter dated August 15, 1993, Willig informed Aboitiz of the damage noticed up on opening of the cargo.

STIP contacted ICNA for insurance claims. On September 21, 1993, the consignee STIP filed a formal claim with Aboitiz for the damage to its cargo. Aboitiz refused to settle the claim. ICNA paid the consignee and filed a complaint for collection of damages against Aboitiz. The RTC ruled in favor of Aboitiz but the CA reversed.

Aboitiz disavowed any liability and asserted that the claim had no factual and legal bases. It countered that the complaint stated no cause of action, plaintiff ICNA had no personality to institute the suit, the cause of action was barred, and the suit was premature there being no claim made upon Aboitiz.

ISSUE

Whether or not respondent ICNA the real party-in-interest that possesses the right of subrogation to claim reimbursement from petitioner Aboitiz.

RULING

Yes, ICNA is a real party-in-interest that possesses the right of subrogation to claim reimbursement from petitioner Aboitiz.

Under a settled jurisprudence, payment by the insurer to the assured operates as an equitable assignment of all remedies the assured may have against the third party who caused the damage. 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.

In this case, respondent's cause of action is founded on it being subrogated to the rights of the consignee of the damaged shipment. Upon payment to the consignee of indemnity for damage to the insured goods, ICNA's entitlement to subrogation equipped it with a cause of action against petitioner in case of a contractual breach or negligence. This right of subrogation, however, has its limitations. First, both the insurer and the consignee are bound by the contractual stipulations under the bill of lading. Second, the insurer can be subrogated only to the rights as the insured may have against the wrongdoer. If by its own acts after receiving payment from the insurer, the insured releases the wrongdoer who caused the loss from liability, the insurer loses its claim against the latter.