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G.R. No. L-36413 September 26, 1988 MALAYAN INSURANCE CO., INC., petitioner, vs. THE HON. COURT OF APPEALS (THIRD DIVISION) MARTIN C.

VALLEJOS, SIO CHOY, SAN LEON RICE MILL, INC. and PANGASINAN TRANSPORTATION CO., INC., respondents. Freqillana Jr. for petitioner. B.F. Estrella & Associates for respondent Martin Vallejos. Vicente Erfe Law Office for respondent Pangasinan Transportation Co., Inc. Nemesio Callanta for respondent Sio Choy and San Leon Rice Mill, Inc.

company obligated itself to indemnify Sio Choy, as insured, for the damage to his motor vehicle, as well as for any liability to third persons arising out of any accident during the effectivity of such insurance contract, which policy was in full force and effect when the vehicular accident complained of occurred. He prayed that he be reimbursed by the insurance company for the amount that he may be ordered to pay. Also later, the herein petitioner sought, and was granted, leave to file a third-party complaint against the San Leon Rice Mill, Inc. for the reason that the person driving the jeep of Sio Choy, at the time of the accident, was an employee of the San Leon Rice Mill, Inc. performing his duties within the scope of his assigned task, and not an employee of Sio Choy; and that, as the San Leon Rice Mill, Inc. is the employer of the deceased driver, Juan P. Campollo, it should be liable for the acts of its employee, pursuant to Art. 2180 of the Civil Code. The herein petitioner prayed that judgment be rendered against the San Leon Rice Mill, Inc., making it liable for the amounts claimed by the plaintiff and/or ordering said San Leon Rice Mill, Inc. to reimburse and indemnify the petitioner for any sum that it may be ordered to pay the plaintiff. After trial, judgment was rendered as follows:

PADILLA, J.: Review on certiorari of the judgment * of the respondent appellate court in CAG.R. No. 47319-R, dated 22 February 1973, which affirmed, with some modifications, the decision, ** dated 27 April 1970, rendered in Civil Case No. U2021 of the Court of First Instance of Pangasinan. The antecedent facts of the case are as follows: On 29 March 1967, herein petitioner, Malayan Insurance Co., Inc., issued in favor of private respondent Sio Choy Private Car Comprehensive Policy No. MRO/PV15753, effective from 18 April 1967 to 18 April 1968, covering a Willys jeep with Motor No. ET-03023 Serial No. 351672, and Plate No. J-21536, Quezon City, 1967. The insurance coverage was for "own damage" not to exceed P600.00 and "third-party liability" in the amount of P20,000.00. During the effectivity of said insurance policy, and more particularly on 19 December 1967, at about 3:30 o'clock in the afternoon, the insured jeep, while being driven by one Juan P. Campollo an employee of the respondent San Leon Rice Mill, Inc., collided with a passenger bus belonging to the respondent Pangasinan Transportation Co., Inc. (PANTRANCO, for short) at the national highway in Barrio San Pedro, Rosales, Pangasinan, causing damage to the insured vehicle and injuries to the driver, Juan P. Campollo, and the respondent Martin C. Vallejos, who was riding in the ill-fated jeep. As a result, Martin C. Vallejos filed an action for damages against Sio Choy, Malayan Insurance Co., Inc. and the PANTRANCO before the Court of First Instance of Pangasinan, which was docketed as Civil Case No. U-2021. He prayed therein that the defendants be ordered to pay him, jointly and severally, the amount of P15,000.00, as reimbursement for medical and hospital expenses; P6,000.00, for lost income; P51,000.00 as actual, moral and compensatory damages; and P5,000.00, for attorney's fees. Answering, PANTRANCO claimed that the jeep of Sio Choy was then operated at an excessive speed and bumped the PANTRANCO bus which had moved to, and stopped at, the shoulder of the highway in order to avoid the jeep; and that it had observed the diligence of a good father of a family to prevent damage, especially in the selection and supervision of its employees and in the maintenance of its motor vehicles. It prayed that it be absolved from any and all liability. Defendant Sio Choy and the petitioner insurance company, in their answer, also denied liability to the plaintiff, claiming that the fault in the accident was solely imputable to the PANTRANCO. Sio Choy, however, later filed a separate answer with a cross-claim against the herein petitioner wherein he alleged that he had actually paid the plaintiff, Martin C. Vallejos, the amount of P5,000.00 for hospitalization and other expenses, and, in his cross-claim against the herein petitioner, he alleged that the petitioner had issued in his favor a private car comprehensive policy wherein the insurance

WHEREFORE, in view of the foregoing findings of this Court judgment is hereby rendered in favor of the plaintiff and against Sio Choy and Malayan Insurance Co., Inc., and third-party defendant San Leon Rice Mill, Inc., as follows: (a) P4,103 as actual damages; (b) P18,000.00 representing the unearned income of plaintiff Martin C. Vallejos for the period of three (3) years; (c) P5,000.00 as moral damages; (d) P2,000.00 as attomey's fees or the total of P29,103.00, plus costs. The above-named parties against whom this judgment is rendered are hereby held jointly and severally liable. With respect, however, to Malayan Insurance Co., Inc., its liability will be up to only P20,000.00. As no satisfactory proof of cost of damage to its bus was presented by defendant Pantranco, no award should be made in its favor. Its counter-claim for attorney's fees is also dismissed for not being proved. 1 On appeal, the respondent Court of Appeals affirmed the judgment of the trial court that Sio Choy, the San Leon Rice Mill, Inc. and the Malayan Insurance Co., Inc. are jointly and severally liable for the damages awarded to the plaintiff Martin C. Vallejos. It ruled, however, that the San Leon Rice Mill, Inc. has no obligation to indemnify or reimburse the petitioner insurance company for whatever amount it has been ordered to pay on its policy, since the San Leon Rice Mill, Inc. is not a privy to the contract of insurance between Sio Choy and the insurance company. 2 Hence, the present recourse by petitioner insurance company. The petitioner prays for the reversal of the appellate court's judgment, or, in the alternative, to order the San Leon Rice Mill, Inc. to reimburse petitioner any amount, in excess of one-half (1/2) of the entire amount of damages, petitioner may be ordered to pay jointly and severally with Sio Choy. The Court, acting upon the petition, gave due course to the same, but "only insofar as it concerns the alleged liability of respondent San Leon Rice Mill, Inc. to petitioner, it being understood that no other aspect of the decision of the Court of Appeals shall be reviewed, hence, execution may already issue in favor of respondent Martin C. Vallejos against the respondents, without prejudice to the determination of whether or not petitioner shall be entitled to reimbursement by respondent San Leon Rice Mill, Inc. for the whole or part of whatever the former may pay on the P20,000.00 it has been adjudged to pay respondent Vallejos." 3

Upon payment of the loss. 5 a passenger of a jeepney had just alighted therefrom. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions.. to plaintiff Vallejos. with the qualification that petitioner's liability is only up to P20. the insurer is entitled to be subrogated pro tanto to any right of action which the insured may have against the third person whose negligence or wrongful act caused the loss (44 Am. 477).00? Moreover. as upheld by the Court of Appeals. as incorrectly held by the trial court. Thus. In the case at bar. adjudged the owner and the driver of the jeepney at fault jointly and severally liable to the heirs of the victim in the total amount of P9. We hold that the trial court. Ins. but it cannot.00. ruled that petitioner is not entitled to be reimbursed by respondent San Leon Rice Mill. are the principal tortfeasors who are primarily liable to respondent Vallejos. pursuant to Article 2184 of the Civil Code which provides: Art. the trial court. are jointly and severally liable to respondent Vallejos. As to the second issue.000. Inc. while the insurance company was sentenced to pay the heirs the amount of P5. In motor vehicle mishaps. 22 Ohio St. Inc. 530. If petitioner is adjudged to pay respondent Vallejos in the amount of not more than P20. Inc. could have. Inc. ed.However. erred in holding petitioner. 284. it becomes the loss of the insurer (44 Am. We do not agree with the aforesaid ruling. insurance is defined as "a contract whereby one undertakes for a consideration to indemnify another against loss. to petitioner. 287 U.500. 75 L. the owner is solidarily liable with his driver.000. Moses. the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be held solidarily liable with the insured and/or the other parties found at fault. On the other hand. Therefore. that of the insured is based on tort. be made "solidarily" liable with the two principal tortfeasors namely respondents Sio Choy and San Leon Rice Mill. Jur. The liability of the insurer is based on contract. Scottish Metropolitan Assurance Co. the former being the employer of the driver of the Willys jeep at the time of the motor vehicle mishap. prevented the misfortune it is disputably presumed that a driver was negligent. It thus appears that respondents Sio Choy and San Leon Rice Mill. is liable to respondent Vallejos.00 only when the obligation to pay P29. 1037). xxx xxx xxx Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. The law states that the responsibility of two or more persons who are liable for a quasi-delict is solidarily. . as upheld by the Court of Appeals. Inc. vs. "solidarily liable" to respondent Vallejos. Inc. and (2) whether petitioner is entitled to be reimbursed by respondent San Leon Rice Mill. 382). petitioner may be compelled by respondent Vallejos to pay the entire obligation of P29. by the use of due diligence..00. the Court of Appeals. the trial court held petitioner together with respondents Sio Choy and San Leon Rice Mills Inc. Co. If the owner was not in the motor vehicle. damage. Co. Inc. 283 U. it is important to determine first the nature or basis of the liability of petitioner to respondent Vallejos. such third persons can directly sue the insurer. Inc.00. In Guingon vs. Thus — . citing Newcomb vs. solidarily liable to respondent Vallejos for a total amount of P29. Inc. for whatever amount petitioner has been adjudged to pay respondent Vallejos on its insurance policy. it is noted that the basis of liability of respondent San Leon Rice Mill. It must be observed that respondent Sio Choy is made liable to said plaintiff as owner of the ill-fated Willys jeep. As to the first issue. as affirmed by the appellate court. when he was bumped by another passenger jeepney. Thus. the two (2) principal issues to be resolved are (1) whether the trial court. The loss in the first instance is that of the insured but after reimbursement or compensation. vs. is an evident breach of the concept of a solidary obligation. 746.000. But. this is on account of its being the insurer of respondent Sio Choy under the third party liability clause included in the private car comprehensive policy existing between petitioner and respondent Sio Choy at the time of the complained vehicular accident. Jur.. not including the insurance company.00 which was to be applied as partial satisfaction of the judgment rendered against said owner and driver of the jeepney. solidarily liable with respondents Sio Choy and San Leon Rice Mill. (to the exclusion of the petitioner) that are solidarily liable to respondent Vallejos for the damages awarded to Vallejos. the provisions of article 2180 are applicable. the qualification made in the decision of the trial court to the effect that petitioner is sentenced to pay up to P20. that petitioner and respondents Sio Choy and San Leon Rice Mill.00 is made solidary.000. Inc. the creditor may enforce the entire obligation against one of the solidary debtors. 2d. In the context of a solidary obligation. Cincinnati Ins. if the former.95 as damages and attorney's fees. While it is true that where the insurance contract provides for indemnity against liability to third persons. 4 On the other hand. even though the former are not engaged ill any business or industry." 8 In the case at bar. on the ground that said respondent is not privy to the contract of insurance existing between petitioner and respondent Sio Choy. if he had been found guilty of reckless driving or violating traffic regulations at least twice within the next preceding two months.S. in said Guingoncase. ed.. xxx xxx xxx The responsibility treated in this article shall cease when the persons herein mentioned proved that they observed all the diligence of a good father of a family to prevent damage. how can petitioner be obliged to pay the entire obligation when the amount stated in its insurance policy with respondent Sio Choy for indemnity against third party liability is only P20. petitioner as insurer of Sio Choy. 7 On the other hand.S. 77 L. to respondent Vallejos. affirmed by this Court. was correct in holding petitioner and respondents Sio Choy and San Leon Rice Mill. For if petitioner-insurer were solidarily liable with said two (2) respondents by reason of the indemnity contract against third party liability-under which an insurer can be directly sued by a third party — this will result in a violation of the principles underlying solidary obligation and insurance contracts. who were held solidarily liable to the heirs of the victim. is Article 2180 of the Civil Code which reads: Art.103.013. We hold instead that it is only respondents Sio Choy and San Leon Rice Mill. in affirming the decision of the trial court. 2184.103. it is noted that the trial court found. 2nd 745. the basis of petitioner's liability is its insurance contract with respondent Sio Choy. it was only the owner and the driver of the jeepney at fault. 6 however. The appellate court overlooked the principle of subrogation in insurance contracts.572. but also for those of persons for whom one is responsible.00. Inc. citing Standard Marine Ins. who was in the vehicle. He died as a result thereof. as compared to that of respondents Sio Choy and San Leon Rice Mill. In the damage suit filed by the heirs of said passenger against the driver and owner of the jeepney at fault as well as against the insurance company which insured the latter jeepney against third party liability. We disagree. or liability arising from an unknown or contingent event. The right of subrogation is of the highest equity. In solidary obligation. notwithstanding the qualification made by the trial court. Co. 2180. Subrogation is a normal incident of indemnity insurance (Aetna L. note 16. Del Monte. in order to determine the alleged liability of respondent San Leon Rice Mill.

the respondent Sio Choy. Without pronouncement as to costs.00. respondent company filed suit in the City Court of Manila for the recovery of P4.500.00 ) WHEREFORE. We find petitioners arguments to be untenable and without merit. when the insurance company pays for the loss. vs.000. the creditor may choose which offer to accept. If the amount paid by the insurance company does not fully cover the injury or loss the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. 1987 MANILA MAHOGANY MANUFACTURING CORPORATION.00 paid by San Miguel Corporation. respondent company paid petitioner five thousand pesos (P5. On 4 May 1970 the insured vehicle was bumped and damaged by a truck owned by San Miguel Corporation. to the effect that if the amount paid by an insurance company does not fully cover the loss. The City Court ordered petitioner to pay respondent P4. nor does it grow out of any privity of contract (emphasis supplied) or upon written assignment of claim. and he shall be preferred to the person who has been subrogated in his place in virtue of the partial payment of the same credit. petitioner.000. is entitled to reimbursement from respondent San Leon Rice Mill. Vallejos may enforce the entire obligation on only one of said solidary debtors. Art. ordering petitioner Manila Mahogany Manufacturing Corporation to pay private respondent Zenith Insurance Corporation the sum of Five Thousand Pesos (P5. is hereby AFFIRMED. petitioner insured its Mercedes Benz 4-door sedan with respondent insurance company. to be reimbursed by the latter in the amount of P14. 456. and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract.00 eventually paid to it by the latter.000.00. shall become the subrogee of the insured. with the modification above-mentioned. stating. claims. Petitioner also invokes Art. On appeal the Court of First Instance of Manila affirmed the City Court's decision in toto. Stated otherwise. SO ORDERED From 6 March 1970 to 6 March 1971. it is subrogated to whatever rights the latter has against respondent San Leon Rice Mill. may exercise his right for the remainder. Inc.50 (which is 1/2 of P29. as subrogee of Sio Choy as against San Leon Rice Mills. On 11 December 1972. 264 N. G." Respondent insurance company thus demanded from petitioner reimbursement of the sum of P4. 142 SE 2d 18). Inc. Petitioner now contends it is not bound to pay P4.000. P5.00) with 6% annual interest from 18 January 1973.00 that it had earlier received from the respondent insurance company.103. . and payment to the insured makes the insurer assignee in equity (Shambley v. the petition is GRANTED. attorney's fees in the sum of five hundred pesos (P500.R. demands the rights of action that now exist or hereafter [sic] develop arising out of or as a consequence of the accident. A creditor.551. the aggrieved party shall be entitled to recover the deficiency from the person causing the loss. are solidarily liable to the respondent Martin C. New Civil Code. not embodied in the Release of Claim. petitioner would be entitled. Citing Article 2207.00.00 to respondent company as the subrogation in the Release of Claim it executed in favor of respondent was conditioned on recovery of the total amount of damages petitioner had sustained. upon paying respondent Vallejos the amount of riot exceeding P20. COURT OF APPEALS AND ZENITH INSURANCE CORPORATION. as such. dated 21 March 1979.000. refused reimbursement. For the damage caused.500. and the resolution of the same Court. Thus. Petitioner refused. No. alleging that San Miguel Corporation had already paid petitioner P4. In the absence of any other evidence to support its allegation that a gentlemen's agreement existed between it and respondent. Inc. that petitioner. petitioner argues that it was entitled to go after San Miguel Corporation to claim the additional P4. the Court of Appeals rightly stated: Petitioner argues that the release claim it executed subrogating Private respondent to any right of action it had against San Miguel Corporation did not preclude Manila Mahogany from filing a deficiency claim against the wrongdoer. PADILLA. Inc. now provide for subrogation. Inc. as evidenced by a cash voucher and a Release of Claim executed by the General Manager of petitioner discharging San Miguel Corporation from "all actions.00 was received by petitioner from respondent. 9 It follows. To recapitulate then: We hold that only respondents Sio Choy and San Leon Rice Mill. L-52756 October 12.000.500. Since total damages were valued by petitioner at P9. denying petitioner's motion for reconsideration of it's decision. is compelled to pay P20. petitioner cites Art. the contents of said deed having expressed all the intents and purposes of the parties. Payment made by one of the solidary debtors extinguishes the obligation.103.00) and petitioner..00).00 for the damages to petitioner's motor vehicle. If two or more solidary debtors offer to pay. Jur. If the payment is made before the debt is due.103. Article 1217 of the Civil Code gives to a solidary debtor who has paid the entire obligation the right to be reimbursed by his co-debtors for the share which corresponds to each. and costs of suit.500. 1304 of the Civil Code. 1217.500. such payment operates as an equitable assignment to the insurer of the property and all remedies which the insured may have for the recovery thereof.00.Although many policies including policies in the standard form. Respondent of course disputes this allegation and states that there was no qualification to its right of subrogation under the Release of Claim executed by petitioner. Inc. with the modification that petitioner was to pay respondent the total amount of P5. To support its alleged right not to return the P4.500. to whom partial payment has been made.000. hence. upon payment to respondent Vallejos and thereby becoming the subrogee of solidary debtor Sio Choy.486. SP08642. 2nd 746). respondent company wrote Insurance Adjusters. as affirmed by the Court of Appeals. the equitable right of subrogation as the legal effect of payment inures to the insurer without any formal assignment or any express stipulation to that effect in the policy" (44 Am. which states: If the plaintiff's property has been insured. without having to turn over said amount to respondent. Vallejos for the amount of P29. dated 8 February 1980. in CA-G.00) in amicable settlement. petitioner claims a preferred right to retain the amount coming from San Miguel Corporation. subrogating respondent company to all its right to action against San Miguel Corporation. despite the subrogation in favor of Private respondent. Petitioner's general manager executed a Release of Claim. therefore. and much more. no interest for the intervening period may be demanded.00 paid by San Miguel Corporation. petitioner. which CFI decision was affirmed by the Court of Appeals.R. 2207 of the Civil Code. as insurer of Sio Choy. xxx xxx xxx In accordance with Article 1217. Jobe-Blackley Plumbing and Heating Co. with the interest for the payment already made.00 of said entire obligation. to demand reimbursement from San Miguel Corporation of the amount it had paid petitioner. J: Petition to review the decision * of the Court of Appeals. No. He who made the payment may claim from his co-debtors only the share which corresponds to each.500..That right is not dependent upon .43 and only P5.00. Insurance Adjusters.C. If Sio Choy as solidary debtor is made to pay for the entire obligation (P29. respondents. such ease of Claim must be taken as the best evidence of the intent and purpose of the parties. and thus determine the rights of the insurer in this respect. The decision of the trial court.

Loss.500. Germany on board M/S Katsuragi. [8] On August 1. Before Us is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) which reversed the Decision[2] of the Regional Trial Court (RTC). Ecotech Center. thereby defeating private respondents. On August 3. 1993.00 paid under the insurance policy.[3]ICNA issued an "all-risk" open marine policy.00 San Miguel Corporation had paid to petitioner.000. Punta Princesa. should the insurance company not fully pay for the injury caused (Article 2207. Ltd. Heald Lumber Co.00 only and not P5. The insurance was for a transshipment of certain wooden work tools and workbenches purchased for the consignee Science Teaching Improvement Project (STIP). petitioner is entitled to keep the sum of P4. The container van was then off-loaded at Singapore and transshipped on board M/S Vigour Singapore. 1 As held in Phil. No. MV Super Concarrier I. the insurer steps into the shoes of the assured and may exercise only those rights that the assured may have against the wrongdoer who caused the damage. Ecotech Center. It was then brought to the Cebu Bonded Warehousing Corporation pending clearance from the Customs authorities. New Civil Code). still. Sudlon Lahug.000. the ship arrived and docked at the Manila International Container Port where the container van was again off-loaded. the right of subrogation. MSAS Cargo International Limited and/or Associated and/or Subsidiary Companies (MSAS) procured a marine insurance policy from respondent ICNA UK Limited of London. should the insured.00 paid by San Miguel Corporation under its clear right to file a deficiency claim for damages incurred. demands and rights of action that now exist or hereafter arising out of or as a consequence of the accident" after the insurer had paid the proceeds of the policy. In disposing of this issue.500. To the extent of the amount he has already received from the insurer enjoy's [sic] the right of subrogation. 1993. 1993. p. packed inside one container van. However.the compromise agreement of P5.00 as originally asked for.00 it had paid under the insurance policy but P4. petitioner's checker noted that the crates were slightly broken or cracked at the bottom. 61." The container van was stripped and transferred to another crate/container van without any notation on the condition of the cargo on the Stuffing/Stripping Report. claims. the Court of Appeals held: . Perez. H. not of P5.00 no longer existed.000. (Sy Keng & Co. the total amount paid by the insurer. The right of subrogation can only exist after the insurer has paid the otherwise the insured will be deprived of his right to full indemnity. then he may sue the party responsible for the damage for the the [sic] remainder. thereby entitling private respondent to recover the same.R. vs. The judgment appealed from is hereby AFFIRMED with costs against petitioner.176. when petitioner released San Miguel Corporation from any liability. Bernhard Willig. the respondent Court acted well within its discretion in awarding P5.000. instead of P5. nevertheless when Manila Mahogany executed another release claim (Exhibit K) discharging San Miguel Corporation from "all actions. The vessel left Manila en route to Cebu City on August 2.. Under this legal provision. 132 cited in Insurance Code and Insolvency Law with comments and annotations.00. On July 18. the amount respondent company paid petitioner as insurance..Y. 1993.) And even if the specific amount asked for in the complaint is P4. Since petitioner by its own acts released San Miguel Corporation. August 06. [G. 1993. Badler.000. after receiving payment from the insurer. Cebu City. RESPONDENT. Cebu City.500. . Cabigao vs. the petition is DENIED. Queensland Insurance Co. Perez 1976. The Facts Culled from the records.500. 4 (Emphasis supplied. not the P4. the insurer loses his rights against the latter. it is provided in [Article 2207 of the New Civil Code] that the insurer is deemed subrogated to the rights of the insured against the wrongdoer and if the amount paid by the insurer does not fully cover the loss.. 2008] ABOITIZ SHIPPING CORPORATION. 1993. against the wrongdoer.00. VS. the real party in interest with regard to the portion of the indemnity paid is the insurer and not the insured 3 (Emphasis supplied) The decision of the respondent court ordering petitioner to pay respondent company. premises considered. but P5. although not prayed for. 25 Phil. On July 26. As subrogee. 168402..000. 391) Otherwise stated: private respondent may recover the sum of P5. PETITIONER. If the insurance proceeds are not sufficient to cover the damages suffered by the insured. does insure for MSAS Cargo International Limited &/or Associated &/or Subsidiary Companies on behalf of the title holder: .00 being based on the insurance policy-the insurer is entitled to recover from the insured the amount of insurance money paid (Metropolitan Casualty Insurance Company of New York vs. It was received by Mr. Mayo B. We believe the City Court and Court of First Instance erred in not awarding the proper relief.. Rosales vs. DECISION REYES.. Since the insurer can be subrogated to only such rights as the insured may have. Aboitiz Transport System. the facts are as follows: On June 20. 54 O..S. in consideration of a premium as agreed and subject to the terms and conditions printed hereon.00 it had earlier paid to petitioner. Reyes Ordoveza. 132 Misc. J. if any. The bill of lading[7] issued by Aboitiz contained the notation "grounded outside warehouse. 77 Phil 120). 844. was shipped "freight prepaid" from Hamburg.000. On this score.G. under the general prayer in the complaint "for such further or other relief as may be deemed just or equitable. 495 .Although petitioners right to file a deficiency claim against San Miguel Corporation is with legal basis. The Court of Appeals rightly reasoned as follows: It is to be noted that private respondent. Barrios Tupas. Cebu City. 1993. 3.[5] The cargo. 151). the insurer will be entitled to recover from the insured whatever it has paid to the latter. WHEREFORE. But in such a case. R. release the wrongdoer who caused the loss. payable to the Assured or order. On August 11. SO ORDERED. petitioner's right to retain the sum of P5. Lim. 2 If a property is insured and the owner receives the indemnity from the insurer. 229 N.: THE RIGHT of subrogation attaches upon payment by the insurer of the insurance claims by the assured. Science Teaching Improvement Project (STIP) and delivered to Don Bosco Technical High School. In the Stripping Report[9] dated August 5. 1993. then the aggrieved party is the one entitled to recover the deficiency.[4] stating: This Company. The CA ordered petitioner Aboitiz Shipping Corporation to pay the sum of P280. without prejudice to the insurer's right of subrogation. Air Lines v. prays for the recovery.. 50 Phil. the right of action of petitioner against the insurer was also nullified. the trial court should have awarded the latter. 1993. Baguiro vs. the shipment arrived in Cebu City and discharged onto a receiving apron of the Cebu International Port. Although private respondent prays for the reimbursement of P4. INSURANCE COMPANY OF NORTH AMERICA. then Claims Head of . is also in accord with law and jurisprudence.000. Sudlon Lahug. A clean bill of lading[6] was issued by Hapag-Lloyd which stated the consignee to be STIP.00 paid by San Miguel Corporation. the cargo was received by petitioner Aboitiz Shipping Corporation (Aboitiz) through its duly authorized booking representative. the container van was loaded on board petitioner's vessel.B.500. On August 13.92 plus interest and attorney's fees in favor of respondent Insurance Company of North America (ICNA). in its companies. (Rule 6.00.. Sec. the cargo was withdrawn by the representative of the consignee. unless the release was made with the consent of the insurer.. (Emphasis supplied) As has been observed: . Revised Rules of Court.T. Philippines.

Mentholatum Co. Aboitiz reiterated that ICNA lacked a cause of action. 524.00 for the damaged condition of the following goods: ten (10) wooden workbenches three (3) carbide-tipped saw blades one (1) set of ball-bearing guides one (1) set of overarm router bits twenty (20) rolls of sandpaper for stroke sander In a Supplemental Report dated October 20. The consignee contacted the Philippine office of ICNA for insurance claims. Moreover. [19] (Emphasis supplied) The trial court also found that ICNA failed to produce evidence that it was a foreign corporation duly licensed to do business in the Philippines. galvanized metal bands were nailed onto all the edges.176.92. The CA ruled: At any rate.. On the outside. 1993. the assured in the Marine Policy appears to be MSAS Cargo International Limited &/or Associated &/or Subsidiary Companies. Manila when it was delivered on July 26. and attorney's fees in the sum of P50. however.000. premises considered. or that ICNA UK assigned the insurance policy to ICNA Phils. did not present any evidence to show that ICNA UK is its predecessor-in-interest. Inc. v. Thus. Metro Manila or that ICNA UK assigned the Marine Policy to ICNA. and not Willig. claims that it has been subrogated to the rights and interest of Science Teaching Improvement Project as shown by the Subrogation Form (Exhibit "K") allegedly signed by a representative of Science Teaching Improvement Project. and the suit was premature there being no claim made upon Aboitiz. Even assuming arguendo that the plaintiff-insurer in this case is an unlicensed foreign corporation.petitioner. We find the ground invoked for the dismissal of the complaint as legally untenable. Geophysical and Astronomical Services Administration. DISMISSED for lack of basis. received a telephone call from Willig informing him that the cargo sustained water damage. Aboitiz disavowed any liability and asserted that the claim had no factual and legal bases. the court holds that plaintiff is not entitled to the relief claimed in the complaint for being baseless and without merit.K. the crate itself appeared to be completely dry and had no water marks. He further explained that the "grounded outside warehouse" notation in the bill of lading referred only to the container van bearing the cargo. the condition is that a foreign insurance company must obtain licenses/authority to do business in the Philippines. upon receiving the call. The defendant's counterclaims are. The dispositive portion of the decision[17] states: WHEREFORE. ICNA Phils. complainant ICNA Phils. the Subrogation Form is self-serving and has no probative value. Makati. the assured in the open policy. The crate was properly sealed off from the inside with tarpaper sheets. such circumstance will not bar it from claiming reimbursement from the defendant carrier by virtue of subrogation under the contract of insurance and as recognized by Philippine courts. the damage was caused by water entering through the broken parts of the crate.. however. London EC3M 7NA. failed to identify whose signature it was and plaintiff did not present on the witness stand or took (sic) the deposition of the person who made that signature. In fact. However.[21] The CA opined that the right of subrogation accrues simply upon payment by the insurance company of the insurance claim. one of the issues defined by the court is whether or not the plaintiff has legal capacity to sue and be sued. no evidence has been adduced which would show that ICNA UK is the same as or the predecessor-in-interest of plaintiff Insurance Company of North America ICNA with office address at Cigna-Monarch Bldg.176. the CA reversed and set aside the RTC ruling. This allegation was. however.[10] Perez found that except for the bottom of the crate which was slightly broken. 8 Lime Street. But he confirmed that the tools which were stored inside the crate were already corroded. Legaspi Village. 1993 when the shipment was stuffed inside another container van for shipment to Cebu.92 with interest thereon at the legal rate from the date of the institution of this case until fully paid. Plaintiff's witness. He found that the container van and other cargoes stuffed there were completely dry and showed no sign of wetness. immediately went to the bonded warehouse and checked the condition of the container and other cargoes stuffed in the same container. ICNA said it is one and the same as the ICNA UK Limited as made known in the dorsal portion of the Open Policy. Aboitiz refused to settle the claim. The complaint is hereby DISMISSED.[18] The RTC ruled that ICNA failed to prove that it is the real party-in-interest to pursue the claim against Aboitiz. 1993 caused water damage to the shipment. denied by the defendant. Perez. 4. 2003. 1993.Plaintiff's witness. plus interest and attorney's fees.' claim that it had been subrogated to the rights of the consignee must fail because the subrogation receipt had no probative value for being hearsay evidence. Willig informed Aboitiz of the damage noticed upon opening of the cargo. (Emphasis supplied) CA Disposition ICNA appealed to the CA. It contended that the trial court failed to consider that its cause of action is anchored on the right of subrogation under Article 2207 of the Civil Code. These licenses/authority are obtained from the Securities and Exchange Commission. x x x xxxx . ICNA is entitled to reimbursement from Aboitiz.[20] On the other hand. If it fails to obtain these licenses/authority. dela Rosa cor. The RTC reasoned: While it is clear that Marine Policy No. The trial court noted that Marine Policy No. CAC reported to ICNA that the goods sustained water damage. the RTC rendered judgment against ICNA. A new judgment is hereby rendered ordering defendant-appellee Aboitiz Shipping Corporation to pay the plaintiffappellant Insurance Company of North America the sum of P280. Plaintiff. Despite follow-ups. Mangaliman. the cause of action was barred. the Claimsmen Adjustment Corporation (CAC) conducted an ocular inspection and survey of the damage. further. such foreign corporation doing business in the Philippines cannot sue before Philippine courts. The shipment was placed outside the warehouse as can be gleaned from the bill of lading issued by Aboitiz which contained the notation "grounded outside warehouse. molds. North Harbor. Second. On August 21. and corrosion which were discovered upon delivery to consignee. It argued that the formal claim was not filed within the period required under Article 366 of the Code of Commerce.. On November 14. A subrogation receipt was duly signed by Willig. RTC Disposition ICNA filed a civil complaint against Aboitiz for collection of actual damages in the sum of P280. Such representative. London EC3M 7NA. plaintiff alleged in its complaint that it is a foreign insurance company duly authorized to do business in the Philippines. no reply was received from Aboitiz. it would appear that heavy rains on July 28 and 29. plaintiff ICNA had no personality to institute the suit.[15] CAC reported to ICNA that based on official weather report from the Philippine Atmospheric. was not presented on the witness stand. It countered that the complaint stated no cause of action. however.176. premises considered. The appealed decision of the Regional Trial Court of Makati City in Civil Case No. Under Philippine law. Hence. 1993. likewise. CAC noted that the shipment was placed outside the warehouse of Pier No.[12] The letter stated that the crate was broken at its bottom part such that the contents were exposed. 941590 is hereby REVERSED and SET ASIDE. 87GB 4475 was issued by ICNA UK Limited with address at Cigna House. to wit: Prescinding from the foregoing. 2005. in the Pre-Trial Order of 12 March 1996. The letter concluded that apparently. On March 29. even assuming that it is an unlicensed foreign corporation. ICNA formally advised Aboitiz of the claim and subrogation receipt executed in its favor. it lacked the capacity to sue before Philippine Courts. the Board of Investments and the Insurance Commission.92 to consignee.540. The work tools and workbenches were found to have been completely soaked in water with most of the packing cartons already disintegrating.[13] On September 21. On October 4. 87GB 4475 was issued by Insurance Company of North America (U. 1993. the present appeal is hereby GRANTED. As subrogee. 72 Phil." It was only on July 31. Herrera Sts. 8 Lime Street.) Limited (ICNA UK) with address at Cigna House.[16] ICNA alleged that the damage sustained by the shipment was exclusively and solely brought about by the fault and negligence of Aboitiz when the shipment was left grounded outside its warehouse prior to delivery. Francisco B. who is merely the representative of the consignee. 1993. ICNA paid the amount of P280.[11] In a letter dated August 15. the claim that there was an endorsement of the marine policy has no probative value as it is hearsay. disposing as follows: WHEREFORE. the consignee filed a formal claim[14] with Aboitiz in the amount of P276. plus the costs of suit. 1993. that ICNA had no right of subrogation because the subrogation receipt should have been signed by MSAS. Hence. claims that the signature below the name MSAS Cargo International is an endorsement of the marine policy in favor of Science Teaching Improvement Project. Francisco.

the notice of claim must be made within twenty four (24) hours from receipt of the cargo if the damage is not apparent from the outside of the package. ICNA's entitlement to subrogation equipped it with a cause of action against petitioner in case of a contractual breach or negligence.[24] It may. First. The law provides: Article 366. both the insurer and the consignee are bound by the contractual stipulations under the bill of lading. the insurance company shall be subrogated to the rights of the insuredagainst the wrongdoer or the person who has violated the contract. v. in consideration of a premium as agreed and subject to the terms and conditions printed hereon. It was the domestic corporation that brought the suit and not the foreign company. the trial court erred in dismissing the complaint and in not finding that based on the evidence on record and relevant provisions of law.[30] This right of subrogation. (Emphasis supplied) . as subrogee of the claim of the insured under the subject marine policy.[31] Second. Within twenty four hours following the receipt of the merchandise. Aboitiz is liable for the loss or damage sustained by the subject cargo. After the periods mentioned have elapsed. THAT THE CLAIM WAS MADE BY A WRONG CLAIMANT. (4) THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLEERROR IN RULING THAT THE EXTENT AND KIND OF DAMAGE SUSTAINED BY THE SUBJECT CARGO WAS CAUSED BY THE FAULT OR NEGLIGENCE OF ABOITIZ.K. The acceptance operated as an acceptance of the authority of the agents. This is in keeping with Section 57 of the Insurance Code which states: A policy may be so framed that it will inure to the benefit of whosoever. or against any of its listed agents worldwide. does insure MSAS Cargo International Limited &/or Associates &/or Subsidiary Companies in behalf of the title holder: –Loss. which states: Article 2207. nor does it grow out of.[29] Upon payment to the consignee of indemnity for damage to the insured goods.[27] MSAS accepted said provision when it signed and accepted the policy. Court of Appeals. if any. in which case the claim shall be admitted only at the time of receipt. For damages that are visible from the outside of the package. which is not prohibited under Philippine law.) ("ICNA UK"). Likewise. the shipper. this Court has held that a foreign insurance company may sue in Philippine courts upon the marine insurance policies issued by it abroad to cover international-bound cargoes shipped by a Philippine carrier. and not the lack of license per se. which bars a foreign corporation from access to our courts. or the transportation charges have been paid. payable to the Assured or Order. It is meant to safeguard the carrier from false and fraudulent claims. the Open Policy expressly provides that: The Company. who may file claims on behalf of the assured. Issues The following issues are up for Our consideration: (1) THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLEERROR IN RULING THAT ICNA HAS A CAUSE OF ACTION AGAINST ABOITIZ BY VIRTUE OF THE RIGHT OF SUBROGATION BUT WITHOUT CONSIDERING THE ISSUE CONSISTENTLY RAISED BY ABOITIZ THAT THE FORMAL CLAIM OF STIP WAS NOT MADE WITHIN THE PERIOD PRESCRIBED BY ARTICLE 366 OF THE CODE OF COMMERCE. A foreign corporation not licensed to do business in the Philippines is not absolutely incapacitated from filing a suit in local courts.[23] (Underscoring supplied) Elsewise stated. however. no claim shall be admitted against the carrier with regard to the condition in which the goods transported were delivered. The policy benefits any subsequent assignee. (Emphasis added) As this Court held in the case of Pan Malayan Insurance Corporation v. Inc. It is the act of engaging in business without the prescribed license. can petitioner be held liable on the claim for damages? Our Ruling We answer the triple questions in the affirmative.Plaintiff insurer... the insurer can be subrogated only to the rights as the insured may have against the wrongdoer. AND THAT THE SUBROGATION RECEIPT ISSUED BY STIP IN FAVOR OF ICNA IS VALID NOTWITHSTANDING THE FACT THAT IT HAS NO PROBATIVE VALUE AND IS MERELY HEARSAY AND A SELF-SERVING DOCUMENT FOR FAILURE OF ICNA TO PRESENT A REPRESENTATIVE OF STIP TO IDENTIFY AND AUTHENTICATE THE SAME. the claim must be made immediately. (Emphasis added) Respondent's cause of action is founded on it being subrogated to the rights of the consignee of the damaged shipment.provided that the indications of the damage or average which give rise to the claim cannot be ascertained from the outside part of such packages. If the amount paid by the insurance company does not fully cover the injury or loss.[25] Thus. has its limitations. the claim against the carrier for damages or average which may be found therein upon opening the packages. x x x[22] The CA ruled that the presumption that the carrier was at fault or that it acted negligently was not overcome by any countervailing evidence. (3) THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLEERROR IN RULING THAT THERE WAS PROPER INDORSEMENT OF THE INSURANCE POLICY FROM THE ORIGINAL ASSURED MSAS CARGO INTERNATIONAL LIMITED ("MSAS") IN FAVOR OF THE CONSIGNEE STIP. Under the Code of Commerce. AND. however. the controversy rotates on three (3) central questions: (a) Is respondent ICNA the real party-in-interest that possesses the right of subrogation to claim reimbursement from petitioner Aboitiz? (b) Was there a timely filing of the notice of claim as required under Article 366 of the Code of Commerce? (c) If so.[26] In any case. and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of. in favor of STIP of Don Bosco Technical High School. Hence. MORE SO.[33] this notice requirement protects the carrier by affording it an opportunity to make an investigation of the claim while the matter is still fresh and easily investigated. Only when that foreign corporation is "transacting" or "doing business" in the country will a license be necessary before it can institute suits. the insured releases the wrongdoer who caused the loss from liability. during the continuance of the risk. (2) THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLEERROR IN RULING THAT THE SUIT FOR REIMBURSEMENT AGAINST ABOITIZ WAS PROPERLY FILED BY ICNA AS THE LATTER WAS AN AUTHORIZED AGENT OF THE INSURANCE COMPANY OF NORTH AMERICA (U. the consignee. a formal indorsement of the policy to the agent in the Philippines was unnecessary for the latter to exercise the rights of the insurer. the insurer loses its claim against the latter. It accrues simply upon payment of the insurance claim by the insurer.[28] payment by the insurer to the assured operates as an equitable assignment of all remedies the assured may have against the third party who caused the damage. the company who issued the insurance. Sweet Lines. may be made. The terms of the Open Policy authorize the filing of any claim on the insured goods. As held in the case of Philippine American General Insurance Co. Its authority is expressly provided for in the open policy which includes the ICNA office in the Philippines as one of the foreign company's agents. the RTC erred when it ruled that there was no proper indorsement of the insurance policy by MSAS. bring suits on isolated business transactions. Circumstances peculiar to this case lead Us to conclude that the notice requirement was complied with. Subrogation is not dependent upon. We uphold the CA observation that while it was the ICNA UK Limited which issued the subject marine policy. Inc.[32] The giving of notice of loss or injury is a condition precedent to the action for loss or injury or the right to enforce the carrier's liability. whether the foreign company or its duly authorized Agent/Representative in the country. If by its own acts after receiving payment from the insurer. The right of subrogation springs from Article 2207 of the Civil Code. As found by the CA. Hence. If the plaintiff's property has been insured. to be brought against ICNA UK. any privity of contract or upon written assignment of claim. the present suit was filed by the said company's authorized agent in Manila. may become the owner of the interest insured. the aggrieved party shall be entitled to recover the deficiency from the person causing the loss or injury. or holder. including the consignee. even if it has no license to do business in this country. is therefore the real party in interest to bring this suit and recover the full amount of loss of the subject cargo shipped by it from Manila to the consignee in Cebu City.

In so doing. 1993. it was stripped from the container van. 1993. Appellee's witness. 1993.[34] In the case of Philippine Charter Insurance Corporation (PCIC) v. a report to this effect had to pass through the proper channels before it could be finalized and endorsed by the institution to the claims department of the shipping company. the shipment delivered to the consignee sustained water damage. but when the container was stripped upon arrival in Cebu City port after being discharged from appellee's vessel. the necessary clearance had to be made before the package was opened.[36] Bernhard Willig. it was discovered that the workbenches and work tools suffered damage due to "wettage" although by then they were already physically dry. WHEREFORE. as subrogee of the consignee. But petitioner admits that even before it received the written notice of claim. relayed the information that the delivered goods were discovered to have sustained water damage to no less than the Claims Head of petitioner. The call to petitioner was made two days from delivery. rainfall in the Port Area of Manila from July 26 to 31. Stipulations requiring notice of loss or claim for damage as a condition precedent to the right of recovery from a carrier must be given a reasonable and practical construction. was informed by telephone sometime in August 13. not to be made a precedent for other cases. We agree with the findings of the CA that petitioner failed to overturn this presumption: x x x upon delivery of the cargo to the consignee Don Bosco Technical High School by a representative from Trabajo Arrastre. destroyed or deteriorated. As adverted to earlier. there are peculiar circumstances in the instant case that constrain Us to rule differently from the PCIC case. 1993. petitioner. 1993). it was re-stuffed inside another container van. ACCU-213798-4 on July 31. Mayo B. that letter. petitioner was able to immediately inspect the damage while the matter was still fresh. when the goods were delivered. On the same day. was received by petitioner only on September 21. petitioner failed to mention where exactly the goods were stored during the period in question. the representative of consignee who received the shipment. the main objective of the prescribed time period was fulfilled. 1993) up to the time the same were delivered to the consignee (August 11. and the crates opened. the presumption of fault or negligence on its part from the time the goods were unconditionally placed in its possession (July 26. 1993. G. together with the notice of claim. The claim for damages was denied. During the period between July 26 to 31. As amply explained by the CA: On the other hand. petitioner must do more than merely show the possibility that some other party could be responsible for the damage. 1993 until it was stuffed inside Container No. neither of the parties in this case presented the terms for giving notices of claim under the bill of lading issued by petitioner for the goods. albeit this ruling is being made pro hac vice.[35] the notice was allegedly made by the consignee through telephone. that a valid notice of claim was made by respondent.The periods above. No other inevitable conclusion can be deduced from the foregoing established facts that damage from "wettage" suffered by the subject cargo was caused by the negligence of appellee carrier in grounding the shipment outside causing rainwater to seep into the cargoes. The Stuffing/Stripping Report (Exhibit "D") at the Manila port did not indicate any such defect or damage. 1993. The presumption that the carrier was at fault or that it acted negligently was not overcome by any countervailing evidence. the petition is DENIED and the appealed Decision AFFIRMED. We can conclude that this was when the shipment sustained water damage. Perez. 1993 up to the time the goods were stripped or transferred from the container van to another container and loaded into the vessel M/V Supercon Carrier I on August 1. The rule as stated in Article 1735 of the Civil Code is that in cases where the goods are lost. 1993. appellee provided no explanation as to where said cargo was stored from July 26. The Surveyor specifically noted that the subject cargo was under the custody of appellee carrier from the time it was delivered by the shipper on July 26. on July 31. Appellee carrier having failed to discharge the burden of proving that it exercised extraordinary diligence in the vigilance over such goods it contracted for carriage.[43] (Emphasis added) Petitioner is thus liable for the water damage sustained by the goods due to its failure to satisfactorily prove that it exercised the extraordinary diligence required of common carriers. x x x If the subject cargo was not grounded outside prior to shipment to Cebu City. unless they prove that they observed extraordinary diligence required by law. 1993 to July 31. it was noted that only one (1) slab was slightly broken at the bottom allegedly hit by a forklift blade (Exhibit "F"). .[39] This standard is intended to grant favor to the shipper who is at the mercy of the common carrier once the goods have been entrusted to the latter for shipment. Claims Head of the company. We now discuss petitioner's liability for the damages sustained by the shipment. To prove the exercise of extraordinary diligence. 1993. indeed. is the real party in interest to institute the claim for damages against petitioner. The shipment was delivered on August 11. 1993 and finally loaded into the appellee's vessel bound for Cebu City on August 2. already corroded. therefore stands. Moreover. and pro hac vice. Understandably. Perez. Perez then immediately went to the warehouse and to the delivery site to inspect the goods in behalf of petitioner. Thus. [37] We give due consideration to the fact that the final destination of the damaged cargo was a school institution where authorities are bound by rules and regulations governing their actions. adapted to the circumstances of the case under adjudication. 1993. We have found that respondent. the shipment was outside a container van and kept in storage by petitioner. What the records showed is that the subject cargo was stripped from the container van of the shipper and transferred to the container on August 1. 1993. vs. Upon opening and discovery of the damaged condition of the goods. Perez was able to investigate the claims himself and he confirmed that the goods were. SO ORDERED. Chemoil Lighterage Corporation. It failed to show that the crate was properly stored indoors during the time when it exercised custody before shipment to Cebu. which is the contract between the parties. 1993 and left Manila for Cebu City on August 2. a reasonable period considering that the goods could not have corroded instantly overnight such that it could only have sustained the damage during transit.[40] Here. Mr. The bill of lading issued by petitioner on July 31. as well as the manner of giving notice may be modified in the terms of the bill of lading. the goods were kept outside the warehouse. Mr. Mr. This Court ruled that such a notice did not comply with the notice requirement under the law." suggesting that from July 26 to 31. 1993. it was loaded onto another vessel bound for Cebu. rather than a strict construction. L-38613 February 25.R.[38] Extraordinary diligence is that extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property rights. 1993. Notably." actually refers to the container and not the contents thereof or the cargoes. Five days later. Provisions specifying a time to give notice of damage to common carriers are ordinarily to be given a reasonable and practical. To recapitulate. indeed. Mayo B. the supplemental report submitted by the surveyor has confirmed that it was rainwater that seeped into the cargo based on official data from the PAGASA that there was. And since evidence showed that rain fell over Manila during the same period. 1993 contains the notation "grounded outside warehouse. Immediately. Although the letter informing the carrier of the damage was dated August 15. There was no evidence presented that the notice was timely given. common carriers are presumed to have been at fault or to have acted negligently. there was substantial compliance with the notice requirement in this case. No. and their application is limited to cases falling fairly within their object and purpose. And yet it presented no evidence to explain where did they place or store the subject goods from the time it accepted the same for shipment on July 26. Neither was there evidence presented that the notice was relayed to the responsible authority of the carrier.[42] Extraordinary diligence must include safeguarding the shipment from damage coming from natural elements such as rainfall. It must prove that it used "all reasonable means to ascertain the nature and characteristic of the goods tendered for transport and that it exercised due care in handling them. 1993. Mayo tried to disavow any responsibility for causing "wettage" to the subject goods by claiming that the notation "GROUNDED OUTSIDE WHSE. Aside from denying that the "grounded outside warehouse" notation referred not to the crate for shipment but only to the carrier van. On August 1. x x x[41] (Emphasis added) The shipment arrived in the port of Manila and was received by petitioner for carriage on July 26. 1982 PACIFIC TIMBER EXPORT CORPORATION.

950 board feet. INC. ft. printed Marine Policy form as filed with and approved by the Office of the Insurance Commissioner (Exhibit A). Quezon Province to Okinawa and Tokyo. on advice of their attorneys. covered by Cover Note 1010 insured for $70. 1963 up to the complete payment. the defendant wrote the plaintiff denying the latter's claim. 1963. respondents. We will send you an accurate report all the details including values as soon as same will be reported to us. insuring the said cargo of the plaintiff "Subject to the Terms and Conditions of the WORKMEN'S INSURANCE COMPANY. Quezon that we have lost approximately 32 pieces of logs during loading of the SS Woodlock. The defendant issued on said date Cover Note No. 1964. On January 13. The adjustment company submitted its 'Report on August 23. the plaintiff informed the defendant about the loss of 'appropriately 32 pieces of log's during loading of the 'SS Woodlock'. on the ground they defendant's investigation revealed that the entire shipment of logs covered by the two marines policies No. 53 110 1032 and 713 HO 1033 were received in good order at their point of destination. The denial of the claim by the defendant was brought by the plaintiff to the attention of the Insurance Commissioner by means of a letter dated March 21.000. in the total amount of P19. or the equivalent of 1. the plaintiff secured temporary insurance from the defendant for its exportation of 1. the sum of P3. the adjuster found that 'the loss of 30 pieces of logs is not covered by Policies Nos. Very respectfully yours. Although dated April 4.79 (Exhibit G). ATILANO Asst. II . ft. 53 HO 1032 and 53 HO 1033.) EMMANUEL S. Thank you for your attention. we wish to remain. the adjustment company submitted a computation of the defendant's probable liability on the loss sustained by the shipment.: This petition seeks the review of the decision of the Court of Appeals reversing the decision of the Court of First Instance of Manila in favor of petitioner and against private respondent which ordered the latter to pay the sum of Pll. On September 14.00. 1963. 53 HO 1032 and 1033 inasmuch as said policies covered the actual number of logs loaded on board the 'SS Woodlock' However.THE HONORABLE COURT OF APPEALS and WORKMEN'S INSURANCE COMPANY.042. 1964. In a letter dated April 4. ft. the loss of 30 pieces of logs is within the 1. but before the issuance of the two marine policies Nos. Manila. Inc. Philippines Gentlemen: This has reference to Insurance Cover Note No.00 as attorney's fees and the costs 1 thereby dismissing petitioner s complaint with costs. INC.250. It was further stated that the said loss may be considered as covered under Cover Note No. 1963. At about 10:00 o'clock a.04 with interest at the rate of 12% interest from receipt of notice of loss on April 15. DE CASTRO.195. On July 17. the defendant requested the First Philippine Adjustment Corporation to inspect the loss and assess the damage.250. 1010 (Exhibit A). We would like to inform you that we have received advance preliminary report from our Office in Diapitan. 1963. 53 H0 1033 (Exhibit B) was for 542 pieces of logs equivalent to 499. some of the logs intended to be exported were lost during loading operations in the Diapitan Bay. 1963. 1963 Workmen's Insurance Company. 1964 (Exhibit K). while the logs were alongside the vessel. 1963 (Exhibit H). the letter was received in the office of the defendant only on April 15. the defendant informed the Insurance Commissioner that. ** J. 1010 for shipment of 1.000. After the issuance of Cover Note No. 53 HO 1032 and 53 HO 1033. In a reply letter dated March 30.04 (Exhibit 4). m.000 bd.250. The plaintiff subsequently submitted a 'Claim Statement demanding payment of the loss under Policies Nos.000 board feet of Philippine Lauan and Apitong logs to be shipped from the Diapitan. respectively). The logs were taken from the log pond of the plaintiff and from which they were towed in rafts to the vessel.498 bd.2 The findings of the of fact of the Court of Appeals. Except as shall be indicated in the discussion of the opinion of this Court the substantial correctness of still particular finding having been disputed. which are generally binding upon this Court. 1963. The two marine policies bore the numbers 53 HO 1032 and 53 HO 1033 (Exhibits B and C. General Manager. Bay. 1010.548 board feet (Exhibit C). 53 HO 1032 and 1033'(Exhibit J-1). Policy No. The total cargo insured under the two marine policies accordingly consisted of 1. Philippine Lauan and Apitong Logs. on March 29. Japan. but 30 pieces were verified to have been lost or washed away as a result of the accident.. 1010 because the said Note had become 'null and void by virtue of the issuance of Marine Policy Nos. 53 H0 1033 was for 853 pieces of logs equivalent to 695. In said report.000 bd. in the total amount of Pl1. the claim of the plaintiff is being denied on the ground that the cover note is null and void for lack of valuable consideration (Exhibit M). Insurance Commissioner Francisco Y. The said letter (Exhibit F) reads as follows: April 4. the following: I THE COURT OF APPEALS ERRED IN HOLDING THAT THE COVER NOTE WAS NULL AND VOID FOR LACK OF VALUABLE CONSIDERATION BECAUSE THE COURT DISREGARDED THE PROVEN FACTS THAT PREMIUMS FOR THE COMPREHENSIVE INSURANCE COVERAGE THAT INCLUDED THE COVER NOTE WAS PAID BY PETITIONER AND THAT INCLUDED THE COVER NOTE WAS PAID BY PETITIONER AND THAT NO SEPARATE PREMIUMS ARE COLLECTED BY PRIVATE RESPONDENT ON ALL ITS COVER NOTES. PACIFIC TIMBER EXPORT CORPORATION (Sgd. 1963.286. The logs were to be loaded on the 'SS Woodlock' which docked about 500 meters from the shoreline of the Diapitan Bay. The regular marine cargo policies were issued by the defendant in favor of the plaintiff on April 2. as shown by the stamp impression appearing on the left bottom corner of said letter. thereby raising a question of law reviewable by this Court 3 are as follows: March 19.042. 4 Petitioner assigned as errors of the Court of Appeals. bad weather developed resulting in 75 pieces of logs which were rafted together co break loose from each other.395 logs. 1010'. Policy No. On June 26. Mandanas observed that 'it is only fair and equitable to indemnify the insured under Cover Note No. and advised early settlement of the said marine loss and salvage claim (Exhibit L). 45 pieces of logs were salvaged. l963. 1964.

For obvious reasons. 33. Thus it sent its adjuster to investigate and assess the loss in July. however. 5 1. thereby leaving no account unpaid by petitioner due on the insurance coverage. the more practical procedure is simply to deduct the premium from the amount due the petitioner on the Cover Note. 1963. It must be because it did not find any delay.: Basic is the requirement that before suing to recover loss of or damage to transported goods. but after the issuance of the Cover Note. tsn. enough time was available for private respondent to determine if petitioner was guilty of delay in communicating the loss to respondent company.—Delay in the presentation to an insurer of notice or proof of loss is waived if caused by any act of his or if he omits to take objection promptly and specifically upon that ground. The law requires this ground of delay to be promptly and specifically asserted when a claim on the insurance agreement is made. the cover note is made subject to the terms and conditions of the marine policies. 1963. As a logical consequence. 2001 . The fact that no separate premium was paid on the Cover Note before the loss insured against occurred. [G. the logs having already been safely placed aboard. by express stipulation. As already stated earlier. the presumption is that a credit was intended and policy is valid. since by the nature of the Cover Note. 1963. it is not disputed that petitioner paid in full all the premiums as called for by the statement issued by private respondent after the issuance of the two regular marine insurance policies. The undisputed facts show that instead of invoking the ground of delay in objecting to petitioner's claim of recovery on the cover note. Juan Jose Camacho. SO ORDERED. for the number or volume of logs lost can be determined independently as in fact it had been so ascertained at the instance of private respondent itself when it sent its own adjuster to investigate and assess the loss. petitioner. does not militate against the validity of petitioner's contention. 1963. From what has been said. the plaintiff must give the carrier notice of the loss or damage. If the Note is to be treated as a separate policy instead of integrating it to the regular policies subsequently issued. it would serve no practical purpose in the realm of commerce. This had to be so because the risk insured against is not for loss during operations anymore. OBJECTIONS ON THAT GROUND ARE WAIVED UNDER SECTION 84 OF THE INSURANCE ACT. AMERICAN HOME ASSURANCE COMPANY and PHILAM INSURANCE COMPANY. At any rate. 2001 Decision[2] and the September 21.respondents. The defense of delay as raised by private respondent in resisting the claim cannot be sustained. and denied recovery therefrom. challenging the June 4. as this Court fails to find a real and substantial sign thereof. 1965). for non-payment by it was not chargeable against its fault. Petitioner contends that the Cover Note was issued with a consideration when. The non-payment of premium on the Cover Note is. The Case Before us is a Petition for Review[1] under Rule 45 of the Rules of Court. 2004] FEDERAL EXPRESS CORPORATION. We find duly substantiated petitioner's assignments of error. We uphold petitioner's submission that the Cover Note was not without consideration for which the respondent court held the Cover Note as null and void. But even on the assumption that there was delay. No. The adjuster submitted his report on August 23. for no loss or damage had to be assessed on the coverage arising from the marine insurance policies. 6 It may be true that the marine insurance policies issued were for logs no longer including those which had been lost during loading operations. INC. waiver can successfully be raised against private respondent. as all Cover Notes do not contain particulars of the shipment that would serve as basis for the computation of the premiums. was to set in motion from July 1963 what would be necessary to determine the cause and extent of the loss. DECISION PANGANIBAN. From April 1963 to July. which was on April 15. in charge of issuing cover notes of the respondent company (p. it did not contain. 1963 and its computation of respondent's liability on September 14. and the payment of premiums is one of the terms of the policies. no separate premiums are intended or required to be paid on a Cover Note. the purpose and function of the Cover Note would be set at naught or rendered meaningless. This would make no difference. within the period prescribed by the Warsaw Convention and/or the airway bill. This is how the cover note as a "binder" should legally operate otherwise.R. which must be deemed to include the Cover Note. it was not necessary to ask petitioner to pay premium on the Cover Note. not a mere application for insurance which is a mere offer. September 24. for no such premium could have been paid. for the loss insured against having already occurred. This is a fact admitted by an official of respondent company. private respondent's reaction upon receipt of the notice of loss. with a view to the payment thereof on the insurance agreement. No special pronouncement as to costs. From this undisputed fact. therefore. The adjuster went as far as submitting his report to respondent. 150094. August 18. 7 2. the appealed decision is set aside and the decision of the Court of First Instance is reinstated in toto with the affirmance of this Court. it took steps clearly indicative that this particular ground for objection to the claim was never in its mind. as well as its computation of respondent's liability on the insurance coverage. after the issuance of the marine insurance policies. ACCORDINGLY. It did not do so. but for loss during transit. vs. This coverage could not have been no other than what was stipulated in the Cover Note.THE COURT OF APPEALS ERRED IN HOLDING THAT PRIVATE RESPONDENT WAS RELEASED FROM LIABILITY UNDER THE COVER NOTE DUE TO UNREASONABLE DELAY IN GIVING NOTICE OF LOSS BECAUSE THE COURT DISREGARDED THE PROVEN FACT THAT PRIVATE RESPONDENT DID NOT PROMPTLY AND SPECIFICALLY OBJECT TO THE CLAIM ON THE GROUND OF DELAY IN GIVING NOTICE OF LOSS AND. private respondent should then have raised this ground of delay to avoid liability. Thus Section 84 of the Insurance Act provides: Section 84. liability on the note would have already arisen even before payment of premium.. this Court is satisfied and convinced that as expressly provided by law. insofar as the liability on the cover note is concerned. In the proceedings that took place later in the Office of the Insurance Commissioner. The nature of this specific ground for resisting a claim places the insurer on duty to inquire when the loss took place. for it is in a real sense a contract. CONSEQUENTLY. J. no cause for the petitioner to lose what is due it as if there had been payment of premium. so that it could determine whether delay would be a valid ground upon which to object to a claim against it. Had all the logs been lost during the loading operations. and is supported by the doctrine that where a policy is delivered without requiring payment of the premium.

Thereafter. SMITHKLINE Beecham (SMITHKLINE for brevity) of Nebraska. Ruling of the Court of Appeals The Test Report issued by the United States Department of Agriculture (Animal and Plant Health Inspection Service) was found by the CA to be . an agent of [Petitioner] Federal Express Corporation. in Flight No. a non-licensed custom’s broker who was assigned by GETC to facilitate the release of the subject cargoes. the Philam Insurance Co. Metro Manila. that the same [were] stored only in a room with two (2) air conditioners running. 1994.339. When he asked an employee of Cargohaus why the cargoes were stored in the ‘cool room’ only. (‘PHILAM’) which recompensed SMITHKLINE for the whole insured amount of THIRTY NINE THOUSAND THREE HUNDRED THIRTY NINE DOLLARS ($39.Resolution[3] of the Court of Appeals (CA) in CA-GR CV No. DARIO C. 1994. or on January 31. a shipment of 109 cartons of veterinary biologicals for delivery to consignee SMITHKLINE and French Overseas Company in Makati City. ‘SO ORDERED. consisting of 92 cartons arrived in Manila on January 29. SMITHKLINE abandoned the shipment and. the customs broker hired by the consignee to facilitate the release of its cargoes from the Bureau of Customs. That same day. Burlington turned over the custody of said cargoes to Federal Express which transported the same to Manila. While the second. found out. [petitioner] appealed to [the CA]. entitled‘American Home Assurance Co.. “Trial ensued and ultimately concluded on March 18. Inc.]. The assailed Resolution denied petitioner’s Motion for Reconsideration. Actual damages in the amount of the peso equivalent of US$39. ‘REFRIGERATE WHEN NOT IN TRANSIT’ and ‘PERISHABLE’ stamp marked on its face. The assailed Decision disposed as follows: “WHEREFORE.. “On January 26.000. twelve (12) days after the cargoes arrived in Manila. Thereafter. the present appeal is hereby DISMISSED for lack of merit. upon instructions from GETC. filed a claim with AHAC through its representative in the Philippines.”[4] “As a consequence of the foregoing result of the veterinary biologics test. DIONEDA (‘DIONEDA’). 0071-28NRT and was immediately stored at [Cargohaus Inc. The following day. [respondents] filed an action for damages against the [petitioner] imputing negligence on either or both of them in the handling of the cargo. (formerly U-WAREHOUSE.00).’ “Costs against the [petitioner and Cargohaus. 95-1219. Prior to the arrival of the cargoes. INC.339.’ “Aggrieved.00 and 3. The first shipment. declaring ‘total loss’ for the unusable shipment. 11263825 with the words. the following: The antecedent facts are summarized by the appellate court as follows: 1. to cool the place instead of a refrigerator. Burlington insured the cargoes in the amount of $39.00 with American Home Assurance Company (AHAC). Costs of suit. samples of the same were taken and brought to the Bureau of Animal Industry of the Department of Agriculture in the Philippines by SMITHKLINE for examination wherein it was discovered that the ‘ELISA reading of vaccinates sera are below the positive reference serum. Federal Express informed GETC Cargo International Corporation. consisting of 17 cartons. came in two (2) days later. Attorney’s fees in the amount of P50. The appealed Decision of Branch 149 of the Regional Trial Court of Makati City in Civil Case No.339. 1994 in Flight No. v.’ is hereby AFFIRMED andREITERATED. of the impending arrival of its client’s cargoes. did not proceed with the withdrawal of the vaccines and instead. judgment is hereby rendered in favor of [respondents] and [petitioner and its Co-Defendant Cargohaus] are directed to pay [respondents]. Inc. while he was about to cause the release of the said cargoes. 1994. “On February 10. 2. jointly and severally. FEDERAL EXPRESS CORPORATION and/or CARGOHAUS. 58208. and PHILAM Insurance Co. The shipment was covered by Burlington Airway Bill No. INC.00 with interest from the time of the filing of the complaint to the time the same is fully paid. premises considered. 1997 with the [petitioner] being held solidarily liable for the loss as follows: The Facts ‘WHEREFORE. Inc. 0071-30NRT which was likewise immediately stored at Cargohaus’ warehouse.). USA delivered to Burlington Air Express (BURLINGTON). DIONEDA. the latter told him that the cartons where the vaccines were contained specifically indicated therein that it should not be subjected to hot or cold temperature.’s] warehouse.

issued by Burlington as agent of petitioner. At the back of the Certificate appears the signature of the representative of Burlington. correct or not? “IV.equips it with a cause of action in case of a contractual breach or negligence. or in the case of total loss (including non-delivery) unless presented within (120) days from the date of issue of the [Airway Bill]. This argument was supposedly not raised in the Answer or during trial. Main Issue: Liability for Damages Petitioner contends that respondents have no personality to sue -.”[6] Found devoid of merit was petitioner’s claim that respondents had no personality to sue. the consignee had a legal right to receive the goods in the same condition it was delivered for transport to petitioner.because the payment made to Smithkline was erroneous. as fully as if the property were covered by a special policy in the name of the holder itself. the appellate court held that the shipping Receipts were a prima facie proof that the goods had indeed been delivered to the carrier in good condition. as fully as if the property were covered by a special policy in the name of the holder. petitioner raises the following issues for our consideration: “I. x x x. the latter had the right of collecting or of being indemnified for loss of or damage to the insured shipment. petitioner’s airway bill states: “12. this Petition. the issues are as follows: (1) Is the Petition proper for review by the Supreme Court? (2) Is Federal Express liable for damage to or loss of the insured goods? Subrogation Upon receipt of the insurance proceeds. Preliminary Issue: Propriety of Review The correctness of legal conclusions drawn by the Court of Appeals from undisputed facts is a question of law cognizable by the Supreme Court. They differ only in their interpretation of what their rights are under its terms.’”[11] Proper Payee The Certificate specifies that loss of or damage to the insured cargo is “payable to order x x x upon surrender of this Certificate. the insurer’s subrogatory right to sue for recovery under the bill of lading in case of loss of or damage to the cargo is jurisprudentially upheld.” Such wording conveys the right of collecting on any such damage or loss. the insurer’s entitlement to subrogation pro tanto -. not admissible? “V.inadmissible in evidence. corporation or government. Is the conclusion of the Honorable Court of Appeals that the goods were received in good condition. is presented by shipper or consignee to an office of Burlington within (14) days from the date the goods are placed at the disposal of the person entitled to delivery. This document has thus been duly indorsed in blank and is deemed a bearer instrument. Upon payment to the consignee of an indemnity for the loss of or damage to the insured goods. the consignee would have a cause of action against the person responsible therefor. the approximate date of the damage or loss.[7] the law is on a certain state of facts’ -. Hence. the facts are undisputed. the consignee (Smithkline) executed a subrogation Receipt[12] in favor of respondents.[9] In the present case. being the holder of the Certificate and having an insurable interest in the goods. and that the carrier delivered the goods in a damaged condition. and the details of the claim.. not a question of fact. petitioner is questioning the conclusions drawn from such facts. states: “6. Indeed. No action shall be maintained in the case of damage to or partial loss of the shipment unless a written notice. The determination of those rights involves a question of law. it stands in the place and in substitution of the consignee. both the insurer and the consignee are bound by the contractual stipulations under the bill of lading. and this casts upon the carrier the burden of showing that the goods were not in good condition when delivered to the carrier. existence and relevancy of specific surrounding circumstance. Pertinent to this issue is the Certificate of Insurance[10] (“Certificate”) that both opposing parties cite in support of their respective positions.1 The person entitled to delivery must make a complaint to the carrier in writing in the case: This Court’s Ruling The Petition has merit. Hence. this case is a proper subject for review by this Court. person. a presumption is raised that the damage occurred through the fault or negligence of the carrier./12. their relation to each other and to the whole and the probabilities of the situation. or that the damage was occasioned by some cause excepting the carrier from absolute liability. 11263825.e. The Issues In its Memorandum. We quote from the ruling as follows: “Where the plaintiff introduces evidence which shows prima facie that the goods were delivered to the carrier in good condition [i. Are Exhibits ‘F’ and ‘G’ hearsay evidence.being of the highest equity -. “As distinguished from a question of law which exists ‘when the doubt or difference arises as to what . Hence. If that right was violated.”[14] In the exercise of its subrogatory right. The latter. As will be shown shortly. Smithkline was the proper payee of the insurance proceeds. Is the conclusion of the Honorable Court of Appeals – petitioner’s claim that respondents have no personality to sue because the payment was made by the respondents to Smithkline when the insured under the policy is Burlington Air Express is devoid of merit – correct or not? “III. and even the consignee.thus. To all intents and purposes.Are the decision and resolution of the Honorable Court of Appeals proper subject for review by the Honorable Court under Rule 45 of the 1997 Rules of Civil Procedure? “II. sufficiently describing the goods concerned. never filed with the carrier any written notice or complaint regarding its claim for damage of or loss to the subject cargo within the period required by the Warsaw Convention and/or in the airway bill. vessel.‘there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts’.” Undeniably. the shipping receipts]. Despite this ruling. or when the ‘query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses. A fortiori. The latter were thus authorized “to file claims and begin suit against any such carrier. Airway Bill No. an insurer may proceed against an erring carrier. this fact has never been denied by respondents and is plainly evident from the records. This the [petitioner] failed to discharge.[13] “Further. Since the Certificate was in the possession of Smithkline. Is the Honorable Court of Appeals correct in ignoring the Warsaw Convention?”[8] Simply stated. Is the Honorable Court of Appeals correct in ignoring and disregarding respondents’ own admission that petitioner is not liable? and “VI. no cause of action against it -.”[16] Relevantly. and therefore. petitioner has tirelessly pointed out that respondents’ claim and right of action are already barred. Prescription of Claim From the initial proceedings in the trial court up to the present.

4 of non-delivery of the goods.” We note that respondents are not without recourse. inter alia. within 3 days from the date of receipt in the case of baggage and 7 days from the date of receipt in the case of goods. it does not constitute a limitation of action.1. Condition Precedent In this jurisdiction. (3) Every complaint must be made in writing upon the document of transportation or by separate notice in writing dispatched within the times aforesaid.[20] The requirement of giving notice of loss of or injury to the goods is not an empty formalism. (2) In case of damage. and the assailed Decision REVERSED insofar as it pertains to Petitioner Federal Express Corporation. “This protects the carrier by affording it an opportunity to make an investigation of a claim while the matter is fresh and easily investigated so as to safeguard itself from false and fraudulent claims.1. .[26] WHEREFORE. there is neither an allegation nor a showing of respondents’ compliance with this requirement within the prescribed period. While respondents may have had a cause of action then.[23] Being a condition precedent. within one hundred and twenty (120) days from the date of the issue of the air waybill. notice is a condition precedent. (1) Receipt by the person entitled to the delivery of baggage or goods without complaint shall be prima facie evidence that the same have been delivered in good condition and in accordance with the document of transportation. and (2) to give it an opportunity to examine the nature and extent of the injury. the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage. no right of action against the carrier can accrue in favor of the former.1 of visible damage to the goods.has been adjudged by the trial court as liable for. and. The aforementioned requirement is a reasonable condition precedent.[22] Failure to comply with such a stipulation bars recovery for the loss or damage suffered. they cannot now enforce it for their failure to comply with the aforesaid condition precedent.[19] The shipper or consignee must allege and prove the fulfillment of the condition. and that it is being charged with liability therefor. the Petition is GRANTED.12.has a stipulation that requires a notice of claim for loss of or damage to goods shipped and the stipulation is not complied with. 12. -petitioner’s co-defendant in respondents’ Complaint below -. In the present case.3 delay. No pronouncement as to costs.1. the notice must precede a suit for enforcement. provides: “ART.”[21] When an airway bill -. the filing of a claim with the carrier within the time limitation therefor actually constitutes a condition precedent to the accrual of a right of action against a carrier for loss of or damage to the goods. and the carrier is not liable if notice is not given in accordance with the stipulation. Inc. (4) Failing complaint within the times aforesaid.2 For the purpose of 12.2 of other damage to the goods. If it fails to do so.1. The fundamental reasons for such a stipulation are (1) to inform the carrier that the cargo has been damaged. or to the first carrier or to the last carrier or to the carrier who performed the transportation during which the loss.1 complaint in writing may be made to the carrier whose air waybill was used.or any contract of carriage for that matter -.339. and 12. within twenty-one (21) days of the date the goods are placed at his disposal. 26. no action shall lie against the carrier. [24] In view of the foregoing. 12.”[17] Article 26 of the Warsaw Convention. 12. save in the case of fraud on his part. at the latest. its enforcement can be prevented and the liability cannot be imposed on the carrier. To stress. damage or delay took place. Cargohaus. In case of delay the complaint must be made at the latest within 14 days from the date on which the baggage or goods have been placed at his disposal. SO ORDERED. we find no more necessity to pass upon the other issues raised by petitioner.”[25] This judgment was affirmed by the Court of Appeals and is already final and executory. “actual damages in the amount of the peso equivalent of US $39. on the other hand. immediately after discovery of the damage and at the latest within fourteen (14) days from receipt of the goods. within fourteen (14) days from the date of receipt of the goods.