Case Summary (G.R. No. 159213)
Petitioners and Respondent
• Vector Shipping Corporation and Francisco Soriano – liable under subrogation theory
• American Home Assurance Company – indemnified insured Caltex and sought reimbursement
Factual Background
• September 30, 1987: Caltex contracts with Vector to transport petroleum cargo; insures cargo for ₱7,455,421.08 under Marine Open Policy No. 34-5093-6.
• December 20, 1987: Collision between M/T Vector and M/V Doña Paz; cargo perishes.
• July 12, 1988: Respondent indemnifies Caltex in full.
Procedural History
• March 5, 1992: Respondent files suit against Vector, Soriano, and Sulpicio Lines for reimbursement.
• December 10, 1997: RTC dismisses complaint as barred by four-year prescription for quasi-delict (Art. 1146, Civil Code).
• July 22, 2003: CA reverses; holds Vector and Soriano jointly liable under ten-year prescription for written contracts or obligations created by law (Art. 1144, Civil Code).
• July 3, 2013: Supreme Court resolves Vector and Soriano’s appeal.
Issues
- Whether respondent’s claim is time-barred by prescription.
- Nature of cause of action: quasi-delict (four-year period) vs. contractual or statutory obligation (ten-year period).
Applicable Law (1987 Constitution and Civil Code)
• Article 1144, Civil Code: ten-year prescription for (1) written contracts, (2) obligations created by law, (3) judgments.
• Article 1146, Civil Code: four-year prescription for quasi-delict and injury to rights.
• Article 2207, Civil Code: statutory subrogation of insurer upon indemnity payment.
Subrogation and Prescriptive Period
• Right of subrogation arises by law upon payment of the insured’s claim (Art. 2207).
• Such right constitutes an obligation created by law, not a derivative contractual claim.
• Prescription runs ten years from accrual—date of indemnity payment (July 12, 1988).
Resolution of Prescription Issue
• RTC erred in characterizing cause of action as quasi-delict (four-year period expired December 20, 1991).
• CA correctly applied Article 1144: ten-year prescription; complaint filed March 5, 1992, well within period from July 12, 1988.
Establishment of Subrogation Rights
• Respondent introduced Marine Open Policy (Exhibit C), Caltex’s claim (Exhibit D), related marine documents (Exhibits E–H), and subrogation receipt (Exhibit I).
• Payment receipt conclusively proves indemnification and triggers subrogation.
• Subro
Case Syllabus (G.R. No. 159213)
Facts
- On September 30, 1987, Caltex Philippines, Inc. (“Caltex”) contracted Vector Shipping Corporation (“Vector”) to transport its petroleum cargo aboard the motor tanker M/T Vector.
- Caltex insured the petroleum cargo with American Home Assurance Company (“respondent”) under Marine Open Policy No. 34-5093-6 for P7,455,421.08.
- In the evening of December 20, 1987, M/T Vector collided with M/V Doña Paz, owned and operated by Sulpicio Lines, Inc., near Dumali Point in Tablas Strait. Both vessels sank, and the entire petroleum cargo of Caltex perished.
- On July 12, 1988, respondent indemnified Caltex in full, paying P7,455,421.08 and obtaining a subrogation receipt.
Procedural History
- March 5, 1992: Respondent filed Civil Case No. 92-620 against Vector, Francisco Soriano (registered owner of M/T Vector), and Sulpicio Lines, Inc., seeking reimbursement of the amount paid to Caltex.
- December 10, 1997: The Regional Trial Court (Branch 145, Makati) dismissed the complaint for prescription, ruling the action arose from a quasi-delict and prescribed after four years from December 20, 1987.
- July 22, 2003: The Court of Appeals reversed the RTC, holding Vector and Soriano jointly and severally liable under a ten-year prescriptive period; absolved Sulpicio Lines from liability.
- Respondent filed a partial motion for reconsideration to include Sulpicio Lines in the award; Vector and Soriano separately perfected their appeal to the Supreme Court on September 12,