Country Bankers Insurance Corporation v.

Travellers Insurance and

Surety Corporation
G.R. No. 82509, August 16, 1989 CORTES, J.

FACTS:
Country Bankers Insurance is the insurer of PTCI for its Toyota Land
Cruiser, while Travellers Insurance is the insurer of Avelino Matundan for his
Isuzu Cargo truck. Country Bankers paid PTCI for the damage and loss it suffered
from a vehicular accident caused by the Isuzu Cargo Truck. Thereafter, as
subrogee, Country Bankers Insurance Corporation demanded reimbursement
from Travellers Insurance. However, one year after such demand, Travellers
refused to pay Country Bankers.

Consequently, Country Bankers filed a complaint in the RTC of Manila. The

RTC ordered Travellers Insurance to pay the petitioner. The CA, however,
dismissed the complaint on the ground that petitioner's cause of action had
prescribed for having filed beyond the one-year period for filing a court action
against the insurer.

ISSUE: WHETHER OR NOT COUNTRY BANKERS INSURANCE’S

CAUSE OF ACTION HAD PRESCRIBED

RULING:
NO. Country Bankers Insurance’s cause of action has not prescribed. The
one-year period should be counted from the date of the rejection of the claim by
the insurer. It is only from the rejection of the claim by the insurer that the
insured's cause of action accrued since a cause of action does not accrue until the
party obligated refuse, expressly or impliedly, to comply with its duty.

However, where the delay in bringing the suit against the insurance
company was not caused by the insured or its subrogee but by the insurance
company itself, it is unfair to penalize the insured or its subrogee by dismissing its
action against the insurance company on the ground of prescription. In the instant
case, petitioner sent a notice of claim to respondent insurance company two
months after the accident. However, it was only a year later that respondent replied
to petitioner's letter informing it that they could not take appropriate action on
petitioners claim because the attending adjuster was still negotiating the case.

KEY CONCEPT:
Where the delay in bringing the suit against the insurance company was not
caused by the insured or its subrogee but by the insurance company itself, it is
unfair to penalize the insured or its subrogee by dismissing its action against the
insurance company on the ground of prescription.