Tuesday, February 21, 2012

Wallem Philippines Shipping Inc., vs. Prudential Guarantee and Assurance Inc.,[G.R. No. 152158. February 7, 2003]

Facts: General Milling Corporation (GMC) contracted Wallem Philippines Shipping Inc. (WALLEM) to ship Indian Toasted Soyabean Extraction Meal to its warehouse in Pasig. During the weighing of the cargo in Batangas, and after comparing its supposed weight from that indicated in the bill of lading, it was found that there was a shortage of 295.682 M/Tons in the shipment. The said bill of lading was prepared by GMC. 

Prudential Guarantee & Assurance Inc (PRUDENTIAL), being GMC’s insurer, received a claim from the latter because of the shortage in the shipment. Prudential paid GMC P995, 677.09, and the latter issued a subrogation receipt to PRUDENTIAL. PRUDENTIAL thereafter sent a demand letter to WALLEM to recover the amount paid to GMC. WALLEM denied liability for the loss in the shipment. 

PRUDENTIAL brought an action for damages against WALLEM and Seacoast Maritime Corp. with the RTC of Makati City. The trial court ruled that PRUDENTIAL failed to prove that there was shortage in the shipment. Since PRUDENTIAL failed to establish that the bill of lading was duly executed, the true and exact weight of the shipment when it was loaded unto the vessel cannot be determined. Hence, there was no way by which a shortage could be determined. Also, since PRUDENTIAL failed to present the contract of insurance executed between it and GMC, it had no cause of action against WALLEM. 

On appeal, the CA reversed. 

Issue: Whether or not  PRUDENTIAL became subrogated to the rights of GMC to claim indemnity against WALLEM 

Held: No, PRUDENTIAL did not become subrogated to GMC’s rights. 

PRUDENTIAL claims that it is subrogated to the rights of GMC pursuant to their insurance contract. For this purpose, it submitted a subrogation receipt and a marine cargo risk note. However, this is not sufficient. As GMC’s subrogee, PRUDENTIAL can exercise only those rights granted to GMC under the insurance contract. The contract of insurance must be presented in evidence to indicate the extent of its coverage. By itself alone, the subrogation receipt is not sufficient to prove the PRUDENTIAL’s claim holding WALLEM liable for the loss in the shipment. 

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