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Insurance Subrogation Case Analysis

Malayan Insurance Company paid 700,000 PHP to its insured, First Malayan Leasing and Finance Corporation, after the insured's vehicle was damaged in a multi-vehicle accident involving a bus, tanker truck, cargo truck, and the insured's vehicle. Malayan Insurance then attempted to recover the amount paid from the owner and driver of the cargo truck, claiming they were liable. The court found that Malayan Insurance provided sufficient documentation to prove valid subrogation to the rights and claims of its insured against liable third parties. Subrogation allows an insurer who has paid a loss to stand in the shoes of the insured and pursue recovery from those responsible for the loss.

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Karl Marxcuz Reyes
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302 views2 pages

Insurance Subrogation Case Analysis

Malayan Insurance Company paid 700,000 PHP to its insured, First Malayan Leasing and Finance Corporation, after the insured's vehicle was damaged in a multi-vehicle accident involving a bus, tanker truck, cargo truck, and the insured's vehicle. Malayan Insurance then attempted to recover the amount paid from the owner and driver of the cargo truck, claiming they were liable. The court found that Malayan Insurance provided sufficient documentation to prove valid subrogation to the rights and claims of its insured against liable third parties. Subrogation allows an insurer who has paid a loss to stand in the shoes of the insured and pursue recovery from those responsible for the loss.

Uploaded by

Karl Marxcuz Reyes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
  • Subrogation Case Study

Subject Matter: Subrogation

Case Title: Malayan Ins. Co., Inc. vs. Rodelio Alberto and Enrico Alberto
Reyes,
G.R. No. 194320, Feb.1, 2012
(J., Velasco Jr.)

Facts: At around 5 o’clock in the morning of December 17, 1995, an accident


occurred at the corner of EDSA and Ayala Avenue, Makati City, involving four (4)
vehicles, to wit: (1) a Nissan Bus operated by Aladdin Transit with plate number NYS
381; (2) an Isuzu Tanker with plate number PLR 684; (3) a Fuzo Cargo Truck with plate
number PDL 297; and (4) a Mitsubishi Galant with plate number TLM 732.

Previously, particularly on December 15, 1994, Malayan Insurance issued Car


Insurance Policy No. PV-025-00220 in favor of First Malayan Leasing and Finance
Corporation (the assured), insuring the aforementioned Mitsubishi Galant against third
party liability, own damage and theft, among others. Having insured the vehicle against
such risks, Malayan Insurance claimed in its Complaint dated October 18, 1999 that it
paid the damages sustained by the assured amounting to PhP 700,000.

Maintaining that it has been subrogated to the rights and interests of the assured by
operation of law upon its payment to the latter, Malayan Insurance sent several demand
letters to respondents Rodelio Alberto (Alberto) and Enrico Alberto Reyes (Reyes), the
registered owner and the driver, respectively, of the Fuzo Cargo Truck, requiring them
to pay the amount it had paid to the assured. When respondents refused to settle their
liability, Malayan Insurance was constrained to file a complaint for damages for gross
negligence against respondents.

In their Answer, respondents asserted that they cannot be held liable for the vehicular
accident, since its proximate cause was the reckless driving of the Nissan Bus driver.
They alleged that the speeding bus, coming from the service road of EDSA,
maneuvered its way towards the middle lane without due regard to Reyes’ right of way.

Issue: Whether or not there was valid subrogation.

Held: Malayan Insurance contends that there was a valid subrogation in the
instant case, as evidenced by the claim check voucher and the Release of Claim and
Subrogation Receipt presented by it before the trial court. Respondents, however, claim
that the documents presented by Malayan Insurance do not indicate certain important
details that would show proper subrogation.

Also, when a party desires the court to reject the evidence offered, it must so state in
the form of a timely objection and it cannot raise the objection to the evidence for the
first time on appeal. Because of a party’s failure to timely object, the evidence becomes
part of the evidence in the case. Thereafter, all the parties are considered bound by any
outcome arising from the offer of evidence properly presented.

Subrogation is the substitution of one person by another with reference to a lawful claim
or right, so that he who is substituted succeeds to the rights of the other in relation to a
debt or claim, including its remedies or securities. The principle covers a situation
wherein an insurer has paid a loss under an insurance policy is entitled to all the rights
and remedies belonging to the insured against a third party with respect to any loss
covered by the policy. It contemplates full substitution such that it places the party
subrogated in the shoes of the creditor, and he may use all means that the creditor
could employ to enforce payment.

We have held that payment by the insurer to the insured operates as an equitable
assignment to the insurer of all the remedies that the insured may have against the third
party whose negligence or wrongful act caused the loss. The right of subrogation is not
dependent upon, nor does it grow out of, any privity of contract. It accrues simply upon
payment by the insurance company of the insurance claim. The doctrine of subrogation
has its roots in equity. It is designed to promote and to accomplish justice; and is the
mode that equity adopts to compel the ultimate payment of a debt by one who, in
justice, equity, and good conscience, ought to pay.

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