Title
Home Insurance Co. vs. Eastern Shipping Lines
Case
G.R. No. L-34382
Decision Date
Jul 20, 1983
A foreign insurer, lacking a license initially, sued carriers for damaged shipments; the Supreme Court ruled its subsequent licensing cured its capacity to sue, enforcing the contracts.

Case Digest (G.R. No. L-34382)
Expanded Legal Reasoning Model

Facts:

  • Facts of Civil Case No. L-34382
    • On January 13, 1967, S. Kajita & Co., for Atlas Consolidated Mining & Development Corp., shipped 2,361 coils of black hot-rolled copper wire rods from Osaka to Manila aboard SS Eastern Jupiter, owned by Eastern Shipping Lines.
    • The shipment was covered by Bill of Lading No. O-MA-9 and insured by petitioner Home Insurance Co. under Policy No. AS-73633 for ₱1,580,105.06. Upon discharge, 53 coils were in bad order; at consignee’s warehouse, 73 coils were loose/partly cut and 28 coils were entangled/scrap. A net shortage of 593.15 kg was found.
    • Home Insurance paid P3,260.44 to the consignee, Phelps Dodge Copper Products Corp., and was subrogated to its rights. Demands for reimbursement were made against Eastern Shipping Lines and Angel Jose Transportation, Inc., but payment was refused.
    • In its complaint, Home Insurance averred its capacity to sue as a foreign insurer authorized to do business in the Philippines through agent Victor H. Bello. Eastern Shipping Lines denied knowledge of this capacity; Angel Jose Transportation, Inc. admitted it.
  • Facts of Civil Case No. L-34383
    • On December 22, 1966, Hansa Transport Kontor shipped 30 packages of farm-equipment service parts from Bremen to Manila aboard SS Neder Rijn, owned by N.V. Nedlloyd Lijnen and represented locally by Columbian Philippines, Inc.
    • The shipment was covered by Bill of Lading No. 22 and insured by Home Insurance under Policy No. AS-73735 (average terms) for $98,567.79. Twenty-nine packages were discharged; nine were in bad order, but one was accepted as negligibly damaged. Three of the remaining eight were intact; the other five had missing items valued at $131.14, and one undelivered package valued $394.66, totaling $525.80 (₱2,426.98).
    • Home Insurance paid ₱2,426.98 to International Harvester Macleod, Inc. (consignee), was subrogated to its rights, and demanded reimbursement from N.V. Nedlloyd Lijnen, Columbian Philippines, Inc., and Guacods, Inc. All refused payment.
    • Home Insurance averred the same capacity to sue as in L-34382. N.V. Nedlloyd Lijnen, Columbian Philippines, Inc., and Guacods, Inc. each denied knowledge or information sufficient to form a belief as to that averment.

Issues:

  • Did petitioner Home Insurance Co. have the legal capacity to sue in Philippine courts as a foreign insurer?
  • Were the insurance contracts executed before securing a license to transact business in the Philippines void or unenforceable, even if license was obtained subsequently?
  • Was the lack of a specific denial in respondents’ answers sufficient to raise the issue of capacity to sue?

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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