Case Summary (G.R. No. 184300)
Petitioner and Respondents
Petitioner: Malayan Insurance Co., Inc. Respondents: Philippines First Insurance Co., Inc. (subrogee of Wyeth) and Reputable Forwarder Services, Inc. (third-party defendant in original suit).
Key Dates
– 1989 onward: Annual carriage contracts between Wyeth and Reputable
– Nov. 18, 1993: Wyeth’s marine policy issued by Philippines First
– Dec. 1, 1993: Carriage contract executed (signed only by Reputable)
– Feb. 11, 1994: Special risk (SR) policy issued by Malayan to Reputable
– Oct. 6, 1994: Truck hijacked; cargo lost
– Mar. 8, 1995: Philippines First indemnified Wyeth (P2,133,257)
– Aug. 12, 1996: Philippines First sued Reputable for reimbursement
– Feb. 29, 2008: Court of Appeals decision
– Aug. 28, 2008: CA denied reconsideration
– July 11, 2012: Supreme Court decision
Applicable Law
1987 Philippine Constitution; Civil Code Articles on carriage of goods (Art. 1732 et seq., Art. 1745(6)); Insurance Code provisions on double insurance (Sec. 93, 94(e), 75) and insurable interest (Sec. 15).
Contractual Background
Since 1989 Reputable agreed to transport Wyeth’s goods “against all risks” including theft, robbery, and force majeure until delivery to Wyeth’s customers. The annual contract required Reputable to secure insurance covering Wyeth’s cargo.
Insurance Coverages
Philippines First issued Marine Policy No. MAR 13797 covering Wyeth’s products in transit (limit ₱6 million per vehicle). Reputable obtained SR Policy No. SR-0001 02577 from Malayan for ₱1 million, covering robbery and hijacking.
Hijacking Incident and Subrogation
On October 6, 1994, armed hijackers stole 1,000 boxes of Promil worth ₱2,357,582.70. Two weeks later the empty truck was recovered. Philippines First paid Wyeth ₱2,133,257 and, by subrogation, demanded reimbursement from Reputable, which refused, prompting suit.
Proceedings and Claims
Philippines First sued Reputable for the indemnity paid to Wyeth, adjustment fees and attorney’s fees. Reputable denied liability (claiming private carrier status, lack of Wyeth’s signature and force majeure) and impleaded Malayan under the SR Policy. Malayan invoked its policy’s Section 5 (no cover if marine policy exists) and Section 12 (other insurance clause).
Lower Court Decisions
The RTC found Reputable liable to Philippines First for ₱2,133,257, adjustment fees and attorney’s fees, and held Malayan liable to indemnify Reputable up to ₱1 million plus attorney’s fees. The CA affirmed with modification, deleting attorney’s fees in favor of Reputable.
Appeals and Arguments
Reputable challenged contract enforceability (Wyeth’s unsigned agreement) and scope of liability. Malayan contended that Section 5 barred coverage if marine insurance sufficed, or at most it owed a ratable share under Section 12. Philippines First defended the CA’s rulings and sought solidarity for ₱998,000.
SC Issue 1: Carrier Classification
Whether Reputable is a common or private (special) carrier determines applicable statutory liability limits under the Civil Code.
SC Analysis on Carrier Status
The Court upheld the factual findings that Reputable is a private carrier: it serves only Wyeth, as testified by Reputable’s management. Judicial admissions by Philippines First that Reputable was common carrier were mere allegations and not binding on Reputable. Under Art. 1732 and jurisprudence, carriage by special agreement to one client makes it a private carrier.
SC Issue 2: Contractual Obligations
Whether Reputable is strictly bound by its contract to answer for all risks, including theft or force majeure.
SC Analysis on Carrier Liability
As a private carrier, its liability is governed by the stipulations of the contract, provided they are not contrary to law or public policy. The agreement unambiguously imposed full risk liability, including theft and robbery, until delivery.
SC Issue 3: Insurance Clauses
Whether Malayan’s SR Policy Sections 5 and 12 (other insurance vs. over-insurance clauses) limit its liability.
SC Analysis on Over and Other Insurance
Section 5 (other insurance clause) and Section 12 (over-insurance clause requiring ratable contribution) apply only upon double in
...continue readingCase Syllabus (G.R. No. 184300)
Case Title and Citation
- G.R. No. 184300, Second Division, July 11, 2012
- Petitioner: Malayan Insurance Co., Inc.
- Respondents: Philippines First Insurance Co., Inc. and Reputable Forwarder Services, Inc.
- Nature of Action: Petition for review on certiorari under Rule 45 of the Rules of Court
Antecedent Facts
- Since 1989, Wyeth Philippines, Inc. (“Wyeth”) and Reputable Forwarder Services, Inc. (“Reputable”) executed annual carriage contracts for transporting Wyeth’s products.
- On November 18, 1993, Wyeth secured Marine Policy No. MAR 13797 from Philippines First Insurance Co., Inc. (“Philippines First”), covering all risks in transit up to ₱6,000,000 per land vehicle.
- On December 1, 1993, Wyeth’s contract with Reputable—signed only by Reputable’s representatives but annually observed since 1989—required Reputable to insure Wyeth’s goods against all risks and to procure an insurance policy.
Insurance Policies
- February 11, 1994: Reputable procured Special Risk Insurance Policy No. SR-0001-02577 from Malayan Insurance Co., Inc. (“Malayan”) for ₱1,000,000 coverage (February 1, 1994 to February 1, 1995).
- Key SR Policy Provisions:
- Section 5 (“Other Insurance Clause”): Excludes Malayan’s liability if the property is insured by any marine or fire policy, except for excess beyond those policies’ limits.
- Section 12 (“Contribution Clause”): Limits Malayan’s liability to its ratable proportion when other insurance exists on the same property.
Hijacking Incident and Subrogation
- October 6, 1994: A truck carrying 1,000 boxes of Promil infant formula (value ₱2,357,582.70) was hijacked; cargo unrecovered.
- March 8, 1995: Philippines First paid Wyeth ₱2,133,257.00 under the marine policy and was subrogated to Wyeth’s rights.
- August 12, 1996: Philippines First sued Reputable for reimbursement; Reputab