1. Sun Insurance and Office Ltd.

Vs Court of Appeals and Nerissa Lim

Facts: Herein Petitioner Sun Insurance issued a Personal Accident Insurance to one Felix Lim.
Pilar Nalagon who was Felix Lim’s secretary was the only eye witness of Felix Lim’s death which
occurred on the night after his mother’s birthday party. According to Nalagaon, Felix was in a
happy mood ( but not drunk). He was seen playing with his hand gun, from which he had
previously removed the magazine. As Felix Lim’s secretary was watching television, Lim stood in
front of her and pointed the gun on her. Nalagon pushed it aside and said it might be loaded.
He assured her it was not and then pointed it to his temple. The next moment there was an
explosion and Lim slumped to the floor dead. As beneficiary, respondent Nerissa lim, the widow
of the deceased Felix Lim, sought payment on the personal accident insurance but her claim
was rejected. The Sun Insurance agreed that it was no suicide, but it argued that there was no
accident either since Lim willfully exposed himself to needless peril.

Issue: Was the insurer liable?

Ruling: According to the Supreme Court, the insurer was liable as the cause of Lim’s death was
accidental. Lim was unquestionably negligent and that negligence cost him his own life. But it
should not prevent his widow from recovering from the insurance policy he obtained precisely
against accident. There is nothing in the policy that relieves the insurer of the responsibility to
pay the indemnity agreed upon if the insured is shown to have contributed to his own accident.
Indeed, most accidents are caused by negligence.
2. FGU Insurance Corporation
vs
Court of Appeals, San Miguel Corporation and Estate of Ang Gui Respresented
by Lucio Julian and Jaime, all surnamed Ang, and Co To, Respondents

Facts: Anco Enterprises Company , a partnership between Ang Gui and Co To, was engaged in
a shipping business. It owned M/T Anco, a tugboat and D/B Lucio, a barge which had no engine
of its own and had to be towed by a tugboat.

San Miguel Corporation (SMC) loaded thousands of cases of beer (Pale Pilsen and Cerveza
Negra) on board the D/B Lucio at Mandaue for delivery to San Jose, Antique.

Anco insured the cargoes with Petitioner FGU Insurance Coporation under a marine insurance
policy.

The D/B Lucio barge was towed by M/T Anco from Mandaue to San Jose, Antique. Upon arrival
in San Jose, Antique, M/T Anco immediately left the barge D/B Lucio. When the tugboat and
barge arrived in San Jose, Antique the clouds over the area were dark and the waves were
already big. San Miguel Corporation’s District Sales Supervisor requested Anco’s representative
to transfer the barge to a safer place. However, Anco’s representative did not heed the request.
At that time, only D/B Lucio was left at the wharf of San Jose as all other vessels already left to
seek shelter. The barge ran aground and was broken and the cargoes of beer in the barge were
swept away.

As a result, Anco demanded payment from its insurer, FGU. However, FGU refused to pay on
the ground that the loss was due to the negligence of the insured.

Issue: Should the negligence of the insured relieve the insurer from its liability under the
policy?

Ruling: it is a basic rule in insurance that the carelessness and negligence of the insured or
his agents constitute no defense on the part of the insurer. However, when the insured’s
negligence or recklessness is so gross as to be sufficient to constitute a willful act,
the insurer must be exonerated. In this case, the crewmembers of both M/T Anco and D/B
Lucio were blatantly negligent. The tugboat immediately left the barge that had no motor and
could not maneuver by itself, in San Jose despite the looming bad weather. Negligence was
likewise exhibited when Anco’s representative did not heed the request of SMC’s representative
to move the barge to a safer place like what was done by the other vessels. Hence, the insurer
could not be made liable since the loss was caused by the gross negligence of the insured.
 1. Loadstar Shipping Company, and Loadstar International Shipping Company,
Incorporated petitioner
vs
Malayan Insurance Company

FACTS:

Loadstar Shipping (Loadstar) and Philippine Associated Smelting and Refining Corporation
(PASAR) entered into a contract of Affreightment for domestic bulk transport of the latter’s
copper concentrates.

The shipper, Philex Mining loaded the cargo of copper concentrates on the vessel of Loadstar
for delivery to the consignee, PASAR. The cargo was insured with Malayan Insurance Co.
(Malayan). On routine inspection, a crack on the starboard side of the vessel which caused
seawater to enter the cargo hold was discovered during the voyage. Upon arrival, PASAR and
Philex Mining found that the copper concentrates were contaminated by seawater. PASAR
demanded payment of P32, 251, 102.31 from Loadstar and Malayan. Malayan paid PASAR the
amount of P32, 251, 102.31 and PASAR signed a subrogation receipt in favor of Malayan.

Malayan demanded reimbursement from Loadstar which refused to pay.

During the trial, the Trial Court found that although contaminated by seawater, the copper
concentrates can still be used. Aside therefrom, the damage was attributable to perils of the
sea and not due to the fault or negligence of Loadstar.

ISSUE: May Malayan as subrogee recover from Loadstar?

RULING: Malayan cannot recover because PASAR could not also recover from Loadstar. In
other words, a subrogee cannot succeed to a right not possessed by the subrogor. A subrogee
in effect steps into the shoes of the insured and can recover only if the insured likewise could
have recovered. (Loadstar Shipping Company, et al vs. Malayan Insurance Company, G. R. No.
185565, November 26, 2014)
2. Asian Terminals Inc. Vs First Lepanto- Taisho Insurance Corporation

FACTS: 3,000 bags of sodium tripolyphosphate contained in 100 jumbo bags were loaded
on a vessel MV Da Feng owned by China Ocean or COSCO for brevity, in favor of its
consignee Grand Asian Sales Inc. or GASI. The shipment was insured against all risk with
First Lepanto. When the shipment arrived in Manila, it was discharged into the possession of
ATI, a corporation engaged in arrastre business and it stayed with them for almost a month.

Later on the cargo was taken by the broker PROVEN from ATI and delivered to GASI. Upon
receipt of the shipment, GASI found that the delivered goods incurred shortages of 8,600
kilograms and spillage of 3,315 kg. valued at P166,772.41.

GASI sought compensation from COSCO, ATI and PROVEN but was denied thus GASI
sought compensation from the insurer First Lepanto. First Lepanto paid GASI the amount of
P166,772.40 as insurance indemnity. GASI executed a Release of Claim discharging First
Lepanto from and all liabilities and subrogating it to all the rights of recovery.

As subrogee, First Lepanto demanded from COSCO and ATI reimbursement of the amount
paid to GASI. But the same was denied thus a complaint for collection of sum of money was
filed before MeTC Manila. ATI denied liability and claimed that upon arrival of the shipment,
one jumbo bag sustained loss/damage while in the custody of COSCO. Aside therefrom, ATI
asserted that during the trial, the insurance contract was not presented by First
Lepanto and only the Certificate of Insurance and Subrogation Receipt were
presented.

MeTC dismissed the case, on appeal to RTC it reversed MeTC and ordered ATI to pay First
Lepanto. On appeal to CA, CA affirmed decision of RTC.

Issue: W/N failure to present the contract of insurance during the trial fatal to the claim of
First Lepanto (NO)

RULING: NEGATIVE. The non-presentation of the insurance contract is not fatal to First
Lepanto’s cause of action for reimbursement as subrogee.

The general rule is that the marine insurance policy needs to be presented in
evidence before the insurer may recover the insured value of the lost/damaged
cargo in the exercise of its subrogatory right; it is critical beacause it is the legal
basis of the right to subrogation. However, such rule is not inflexible and there
are exceptions to such rule. Right to subrogation accrues simply upon payment by the
insurance company of the insurance claim and presentation in evidence of marine insurance
policy is not indispensable before an insurer may recover from the common carrier. The
subrogation receipt, by itself is sufficient to establish not only the relationship
between the insurer and consignee, but also the amount paid to settle the
insurance claim. An arrastre operator is liable for the lost shipment despite the failure of
the insurance company to offer in evidence the insurance contract or policy as it was certain
that the loss of the cargo occurred while in ATI’s custody. (Asian Terminals, Inc. vs. First
Lepantro-Taisho Insurance Corporation, 726 SCRA 415, June 16, 2014)

With ATI’s liability having been positively established, to strictly require the presentation of
the insurance contract will run counter to the principle of equity upon which the doctrine of
subrogation is premised.

Also, the defense of non-presentation of the contract of insurance was raised for the first
time on appeal.

THEREFORE, SC denied the petition for review and affirmed CA ordering ATI to
pay Lepanto.
3. Lorenzo Shipping Corp. Vs Chubb and Sons Inc., Gearbulk Ltd. And Philippine
Transmarine Carriers

Facts: Mayer Steel loaded 581 black steel pipes worth $137K on board a vessel
owned by Lorenzo Shipping for shipment to Davao City with Sumitomo Corporation
of San Francisco, California, U. S. A., as consignee. Sumitomo insured the goods
with Chubb and Sons, Inc. The cargo hold of the vessel was flooded with seawater
as a result of which the submerged shipment of steel pipes rusted and no longer in
good condition. Sumitomo filed informed Lorenzo Shipping that they will file a claim
for damages. Later on, Sumitomo filed a marine insurance claim against the insurer
Chubb and Sons for almost $104k. Chubb and Sons, the insurer paid Sumitomo and
later sued Lorenzo Shipping for collection of sum of money.

It was claimed by Lorenzo that the insurer, Chubb and Sons, cannot sue in the
Philippines because it was merely subrogated to the rights of the insured, Sumitomo
which was a foreign corporation doing business in the Philippines without a license and
did not have capacity to sue in Philippine courts. Lorenzo Shipping argued that since the
insured, Sumitomo did not have capacity to sue, then neither the subrogee-insurer could
sue before Philippine courts.

RTC decided in favor of Chubb and Sons and CA affirmed the decision of RTC.

Issue: Assuming that Sumitomo cannot sue in the Philippines, does it follow that the
insurer, as subrogee had also no capacity to sue in the Philippines?

Ruling: NEGATIVE. The court held that assuming arguendo that Sumitomo
cannot sue in the Philippines, it does not follow that respondent, as subrogee,
has also no capacity to sue in our jurisdiction.
The incapacity of the insured to sue was not passed on to the insurer-subrogee. When
an insurer succeeds to the rights of the insured, he does so only in relation to
the debt. The rights inherited by the insurer pertain only to the payment it made to the
insured. Capacity to sue is a right personal to its holder. It is conferred by law
and not by the parties.
In this case, Chubb and Sons proved its capacity to sue. Although the insurer was a
foreign corporation, it was not doing business in the Philippines but was suing only
under an isolated transaction, i.e., under one marine insurance policy issued in favor of
Sumitomo covering the damaged pipes. Such being the case, the insurer may sue
in Philippine courts. (Lorenzo Shipping Corp. vs. Chubb and Sons, Inc., 431 SCRA
266, June 8, 2004.)
THEREFORE, the SC denied the petition of Lorenzo Shipping and affirmed decision of
CA.
 4. Manila Mahogany Mfg. Corp. vs. CA

Facts: Manila Mahogany insured its car with Zenith Insurance. The insured vehicle was
bumped and damaged by a truck owned by San Miguel Corporation. For the damage
caused, Zenith paid Manila Mahogany P5,000, subrogating Zenith to all its rights against
San Miguel. Zenith demanded reimbursement from San Miguel of the amount paid to the
insured. San Miguel refused on the ground that it already paid Manila Mahogany P4,500 for
the damage to its car and the insured executed a release of claim discharging San Miguel
from all claims arising out of the accident. Zenith then demanded reimbursement from the
insured which refused to pay on the ground that it merely recovered from San Miguel the
deficiency of the damage caused to the car insured as the amount received from the insurer
was not sufficient to cover the full amount of the damage.

Issue: Should the insured return to the insurer the amount received from the latter?

Ruling: The insurer is entitled to recover from the insured the amount of insurance money
paid. Since the insured by its own acts released San Miguel, thereby defeating the insurer’s
right of subrogation, the right of action of the insured against the insurer was also nullified.
“To the extent of the amount he has already received from the insurer, the insurer enjoys
the right of subrogation. Since the insurer can be subrogated to only such rights as the
insured may have, should the insured, after receiving payment from the insurer release the
wrongdoer who caused the loss, the insurer losses its rights against the latter. But in such
case, the insurer will be entitled to recover from the insured whatever it has paid to the
latter, unless the release was made with the consent of the insurer.” When the insured
released San Miguel from any liability, the insured’s right to retain the sum of P5,000 no
longer existed, thereby entitling the insurer to recover the same. (Manila Mahogany Mfg.
Corp. vs. Court of Appeals, 154 SCRA 651
5. Stronghold Insurance Co., Inc. vs Container Services, et al.

Facts:
The vehicle owned by respondent Gloria Dee Chong was insured with petitioner
insurance company. The vehicle insured met an accident where four persons died and
three were seriously injured. The vehicle was also heavily damaged. The insurer
refused to pay the claim of the insured on the ground that the driver of the vehicle
insured was heavily drunk at the time of the accident which exempts the insurer from
liability pursuant to the provisions of the policy. At the trial, the allegation of the insurer
that the driver of the vehicle insured was drunk was based on a Pagpapatunay and a
medico-legal certificate which contained alterations. The police blotter did not also
contain any report of the driver’s intoxication.

Issue: May the insurer be exempted from liability?

Ruling: In exempting insurers from liability under the contract, proof thereof must be
clear, credible and convincing. The insurer is not exempted from liability in this case.
(Stronghold Insurance Co., Inc. vs. Container Services, et al., G. R. No. 194328, July 1,
2015, J. Perez, ponente).