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Subrogation and Prescription in Insurance Law

This case involves a dispute between Vector Shipping Corporation and American Home Insurance Company regarding insurance coverage of cargo lost at sea. American Home Insurance had insured cargo belonging to Caltex that was being transported by Vector. The cargo was lost in an accident during voyage in December 1990. American Home indemnified Caltex for the loss. In March 1992, American Home filed a complaint against Vector, Floriano, and Julpicio Lines to recover the full amount it paid to Caltex. The court ruled that the applicable statute of limitations was 10 years under Article 1144 of the Civil Code, as American Home's right of subrogation against Vector was created by law, not by a written contract.

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Val Peralta-Naval
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579 views1 page

Subrogation and Prescription in Insurance Law

This case involves a dispute between Vector Shipping Corporation and American Home Insurance Company regarding insurance coverage of cargo lost at sea. American Home Insurance had insured cargo belonging to Caltex that was being transported by Vector. The cargo was lost in an accident during voyage in December 1990. American Home indemnified Caltex for the loss. In March 1992, American Home filed a complaint against Vector, Floriano, and Julpicio Lines to recover the full amount it paid to Caltex. The court ruled that the applicable statute of limitations was 10 years under Article 1144 of the Civil Code, as American Home's right of subrogation against Vector was created by law, not by a written contract.

Uploaded by

Val Peralta-Naval
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Vector Shipping Corporation vs.

American Home Insurance Company


G.R. No. 159213. July 3, 2013 Contracts; Prescription Facts: Calte entere! into a contract o" a""rei#$t%ent3 &it$ 'ector "or t$e transport o" Calte (s petroleu% car#o t$rou#$ t$e )*+ 'ector. Calte insure! t$e petroleu% car#o &it$ respon!ent "or ,,-55,-21.0. un!er )arine /pen Policy. 0"ter appro i%ately t$ree %ont$s, t$e entire petroleu% car#o o" Calte on 1oar! t$e )*+ 'ector peris$e! !ue to an acci!ent !urin# 2oya#e on 3ece%1er 20, 19.,. +$e respon!ent in!e%ni"ie! Calte "or ,,-55,-21.0.. +$e respon!ent "ile! a co%plaint a#ainst 'ector, 4oriano, an! 4ulpicio 5ines, 6nc. to reco2er t$e "ull a%ount o" ,,-55,-21.0. it pai! to Calte only on )arc$ 5, 1992.

Ratio: +$e le#al pro2ision #o2ernin# t$is case &as not 0rticle 11-7 o" t$e Ci2il Co!e, 1ut 0rticle 11-- o" t$e Ci2il Co!e. 8o&e2er, t$e present action &as not upon a &ritten contract, 1ut upon an o1li#ation create! 1y la&. 8ence, it ca%e un!er 0rticle 11-- 92: o" t$e Ci2il Co!e. +$is is 1ecause t$e su1ro#ation o" respon!ent to t$e ri#$ts o" Calte as t$e insure! &as 1y 2irtue o" t$e e press pro2ision o" la& e%1o!ie! in 0rticle 220, o" t$e Ci2il Co!e, to &it: 0rticle 220,. 6" t$e plainti""(s property $as 1een insure!, an! $e $as recei2e! in!e%nity "ro% t$e insurance co%pany "or t$e in;ury or loss arisin# out o" t$e &ron# or 1reac$ o" contract co%plaine! o", t$e insurance co%pany s$all 1e su1ro#ate! to t$e ri#$ts o" t$e insure! a#ainst t$e &ron#!oer or t$e person &$o $as 2iolate! t$e contract. 6" t$e a%ount pai! 1y t$e insurance co%pany !oes not "ully co2er t$e in;ury or loss, t$e a##rie2e! party s$all 1e entitle! to reco2er t$e !e"iciency "ro% t$e person causin# t$e loss or in;ury. 9<%p$asis supplie!: 4u1ro#ation un!er 0rticle 220, o" t$e Ci2il Co!e #i2es rise to a cause o" action create! 1y la&. For purposes o" t$e la& on t$e prescription o" actions, t$e perio! o" li%itation is ten years.

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