G.R. No.
223134, August 14, 2019
VICENTE G. HENSON, JR., PETITIONER, v. UCPB GENERAL INSURANCE CO., INC.,
RESPONDENT.
DECISION
PERLAS-BERNABE, J.:
Henson, Jr. vS. UCPB General Insurance Co., Inc. G.R. No. 223134
The Facts
6
From 1989 to 1999, National Arts Studio and Color Lab (NASCL) leased the front portion of the
ground floor of a two (2)-storey building located in Sto. Rosario Street, Angeles City, Pampanga, then
7
owned by petitioner. In 1999, NASCL gave up its initial lease and instead, leased the right front
portion of the ground floor and the entire second floor of the said building, and made renovations with
8
the building's piping assembly. Meanwhile, Copylandia Office Systems Corp. (Copylandia) moved in to
9
the ground floor. On May 9, 2006, a water leak occurred in the building and damaged Copylandia's
10
various equipment, causing injury to it in the amount of P2,062,640.00. As the said equipment were
11
insured with respondent, Copylandia filed a claim with the former. Eventually, the two parties settled
12
on November 2, 2006 for the amount of P1,326,342.76. This resulted in respondent's subrogation
13
to the rights of Copylandia over all claims and demands arising from the said incident. On May 20,
2010, respondent, as subrogee to Copylandia's rights, demanded from, inter alia, NASCL for the
14 15
payment of the aforesaid claim, but to no avail. Thus, it filed a complaint for damages against
16
NASCL, among others, before the RTC, docketed as Civil Case No. 10-885.
Meanwhile, sometime in 2010, petitioner transferred the ownership of the building to Citrinne
17
Holdings, Inc. (CHI), where he is a stockholder and the President.
18
On October 6, 2011, respondent filed an Amended Complaint (Second Amendment), impleading
CHI as a party-defendant to the case, as the new owner of the building. However, onApril 21, 2014,
respondent filed a Motion to Admit Attached Amended Complaint and Pre-Trial Brief (Third
19
[A]mendment), praying that petitioner, instead of CHI, be impleaded as a party-defendant to the
case, considering that petitioner was then the owner of the building when the water leak damage
20
incident happened.
In the said complaints, respondent faults: (a) NASCL for its negligence in not properly maintaining in
good order the comfort room facilities where the renovated building's piping assembly was utilized;
and (b) CHI/petitioner, as the owner of the building, for neglecting to maintain the building's drainage
system in good order and in tenantable condition. According to respondent, such negligence on their
part directly resulted in substantial damage to Copylandia's various equipment amounting to
22
P2,062,640.00. CHI opposed the motion principally on the ground of prescription, arguing that since
respondent's cause of action is based on quasi-delict, it must be brought within four (4) years from its
accrual on May 9, 2006. As such, respondent is already barred from proceeding against
23
CHI/petitioner, especially since the latter never received any prior demand from the former.
The RTC Ruling
24
In an Order dated June 10, 2014, the RTC ruled in respondent's favor and accordingly, ordered the:
(a) dropping of CHI as party-defendant; and (b) joining of petitioner as one of the party-defendants in
25
the case.
The RTC pointed out that respondent's cause of action against the party-defendants, including
petitioner, arose when it paid Copylandia's insurance claim and became subrogated to the rights and
claims of the latter in connection with the water leak damage incident. Since respondent was merely
enforcing its right of subrogation, the prescriptive period is ten (10) years based on an obligation
created by law reckoned from the date of Copylandia's indemnification, or on November 2, 2006. As
such, respondent's claim against petitioner has yet to prescribe when it sought to include the latter as
27
party-defendant on April 21, 2014. CHI moved for reconsideration, which was, however, denied in
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an Order dated September 22, 2014. Aggrieved with his inclusion as party-defendant to the case,
29
petitioner filed a petition forcertiorari under Rule 65 of the Rules of Court before the CA, docketed as
CA-G.R. SP. No. 138147.
The CA Ruling
30
In a Decision dated November 13, 2015, the CA affirmed the RTC ruling. It held that respondent's
cause of action has not yet prescribed since it was not based on quasi-delict, which must be brought
within four (4) years from the date of the occurrence of the negligent act. Rather, it is based on an
obligation created by law, which has a longer prescriptive period often (10) years reckoned from its
31
accrual.
32 33
Undaunted, petitioner moved for reconsideration, but the same was denied in a Resolution dated
February 26, 2016; hence, this petition.
The Issue Before the Court
The issue for the Court's Resolution is whether or not respondent's claim has yet to prescribe.
The Court's Ruling
In ruling that respondent's claim against petitioner has yet to prescribe, the courts a quo citedVector
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Shipping Corporation v. American Home Assurance Company (Vector). In that case, therein
petitioner Vector Shipping Corporation (Vector) entered into a contract of affreightment with Caltex
Philippines, Inc. (Caltex) for the transport of the latter's goods. In connection therewith, Caltex
insured its goods with therein respondent American Home Assurance Company (American Home).
During transport on December 20, 1987, Vector's ship collided with another vessel and sank,
resulting in the total loss of Caltex's goods. On July 12, 1988, American Home fully indemnified
Caltex for its loss in the amount of P7,455,421.08, and thereafter, filed a suit against, inter alia,
Vector for the recovery of such amount on March 5, 1992. Initially, the RTC ruled that American
Home's claim against Vector has prescribed as it was based on a quasi-delictwhich should have been
filed within four (4) years from the time Caltex suffered a total loss of its goods. However, the CA
reversed the ruling, holding that the claim has yet to prescribe as it is based on a breach of Vector's
contract of affreightment with Caltex, which has a longer prescriptive period often (10) years, again
35
reckoned from the time of the loss. The Court, inVector, agreed with the CA that the claim has yet
to prescribe, but qualified that "the present action was not upon a written contract, but upon an
36
obligation created by law," viz.:
We concur with the CA's ruling that respondent's action did not yet prescribe. The legal provision
governing this case was not Article 1146 of the Civil Code, but Article 1144 of the Civil Code, which
states:
Article 1144. The following actions must be brought within ten years from the time the cause of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
We need to clarify, however, that we cannot adopt the CA's characterization of the cause of action as
based on the contract of affreightment between Caltex and Vector, with the breach of contract being
the failure of Vector to make the M/T Vector seaworthy, so as to make this action come under Article
1144 (1), supra. Instead, we find and hold that the present action was not upon a written
contract, but upon an obligation created by law. Hence, it came under Article 1144 (2) of the
Civil Code. This is because the subrogation of respondent to the rights of x x x the insured was by
virtue of the express provision of law embodied in Article 2207 of the Civil Code, to wit:
Article 2207. If the plaintiffs property has been insured, 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. 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.
The juridical situation arising under Article 2207 of the Civil Code is well explained inPan Malayan
Insurance Corporation v. [CA,37] as follows:
Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured
property is destroyed or damaged through the fault or negligence of a party other than the assured,
then the insurer, upon payment to the assured, will be subrogated to the rights of the assured to
recover from the wrongdoer to the extent that the insurer has been obligated to pay. Payment by
the insurer to the assured operates as an equitable assignment to the former of all
remedies which the latter 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 or upon written assignment of claim. It accrues simply upon payment
of the insurance claim by the insurer [Compañia Maritima v. Insurance Company of North
America, 120 Phil. 998 (1964); Fireman's Fund Insurance Company v. Jamila & Company, Inc., 162
Phil. 421 (1976)].
Verily, the contract of affreightment that Caltex and Vector entered into did not give rise to the legal
obligation of Vector and Soriano to pay the demand for reimbursement by respondent because it
concerned only the agreement for the transport of Caltex's petroleum cargo. As the Court has aptly
put it in Pan Malayan Insurance Corporation v. [CA], supra, respondent's right of subrogation pursuant
to Article 2207, supra, was "not dependent upon, nor d[id] it grow out of, any privity of contract or
upon written assignment of claim [but] accrue[d] simply upon payment of the insurance claim by the
insurer."
Considering that the cause of action accrued as of the time respondent actually indemnified Caltex in
the amount of P7,455,421.08 on July 12, 1988, the action was not yet barred by the time of the filing
of its complaint on March 5, 1992, which was well within the 10-year period prescribed by Article 1144
of the Civil Code.38(Emphases and underscoring supplied)
In Vector, the Court held that the insured's (i.e., American Home's) claim against the debtor (i.e.,
Vector) was premised on the right of subrogation pursuant to Article 2207 of the Civil Code and hence,
an obligation created by law. While indeed American Home was entitled to claim against Vector by
virtue of its subrogation to the rights of the insured (i.e., Caltex), the Court failed to discern that no
new obligation was created between American Home and Vector for the reason that a
subrogee only steps into the shoes of the subrogor; hence, the subrogee-insurer only assumes
the rights of the subrogor-insured based on the latter's original obligation with the debtor.
To expound, subrogation's legal effects under Article 2207 of the Civil Code are primarily between the
subrogee-insurer and the subrogor-insured: by virtue of the former's payment of indemnity to the
latter, it is able to acquire, by operation of law, all rights of the subrogor-insured against the debtor.
The debtor is a stranger to this juridical tie because it only remains bound by its original obligation to
its creditor whose rights, however, have already been assumed by the subrogee. In Vector's case,
American Home was able to acquire ipso jure all the rights Caltex had against Vector under their
contract of affreightment by virtue of its payment of indemnity. If at all, subrogation had the effect of
obliging Caltex to respect this assumption of rights in that it must now recognize that its rights against
the debtor, i.e., Vector, had already been transferred to American Home as the subrogee-insurer. In
other words, by operation of Article 2207 of the Civil Code, Caltex cannot deny American Home of its
right to claim against Vector. However, the subrogation of American Home to Caltex's rights did not
alter the original obligation between Caltex and Vector.
Accordingly, the Court, in Vector, erroneously concluded that "the cause of action [against Vector]
accrued as of the time [American Home] actually indemnified Caltex in the amount of P7,455,421.08
39
on July 12, 1988." Instead, it is the subrogation of rights between Caltex and American Home which
arose from the time the latter paid the indemnity therefor. Meanwhile, the accrual of the cause of
action that Caltex had against Vector did not change because, as mentioned, no new obligation was
created as between them by reason of the subrogation of American Home. The cause of action against
Vector therefore accrued at the time it breached its original obligation with Caltex whose right of
action just so happened to have been assumed in the interim by American Home by virtue of
subrogation. "[A] right of action is the right to presently enforce a cause of action, while a cause of
40
action consists of the operative facts which give rise to such right of action."
The foregoing application hews more with the fundamental principles of civil law, especially on the
well-established doctrines on subrogation. Article 1303 of the Civil Code states that "[s]ubrogation
transfers to the person subrogated the credit with all the rights thereto appertaining, either against
the debtor or against third persons x x x." In Loadstar Shipping Company, Inc. v. Malayan Insurance
41
Company, Inc., the Court had clearly explained that because of the nature of subrogation as a mode
of "creditor-substitution," the rights of a subrogee cannot be superior to the rights possessed by a
subrogor, viz.:
The rights of a subrogee cannot be superior to the rights possessed by a
subrogor. "Subrogation is the substitution of one person in the place of 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 rights to which the
subrogee succeeds are the same as, but not greater than, those of the person for whom he is
substituted, that is, he cannot acquire any claim, security or remedy the subrogor did not have. In
other words, a subrogee cannot succeed to a right not possessed by the subrogor. A subrogee in
effect steps into the shoes of the insured and can recover only if the insured likewise could
have recovered."
Consequently, an insurer indemnifies the insured based on the loss or injury the latter actually
suffered from. If there is no loss or injury, then there is no obligation on the part of the insurer to
indemnify the insured. Should the insurer pay the insured and it turns out that indemnification
is not due, or if due, the amount paid is excessive, the insurer takes the risk of not being
able to seek recompense from the alleged wrongdoer. This is because the supposed
subrogor did not possess the right to be indemnified and therefore, no right to collect is
passed on to the subrogee.42 (Emphases and underscoring supplied)
Despite its error, Vector had aptly cited the case of Pan Malayan Insurance Corporation v. CA(Pan
43
Malayan), wherein it was explained that subrogation, under Article 2207 of the Civil Code, operates
44
as a form of "equitable assignment" whereby "the insurer, upon payment to the assured, will be
subrogated to the rights of the assured to recover from the wrongdoer to the extent that the insurer
45
has been obligated to pay." It is characterized as an "equitable assignment" since it is an
assignment of credit without the need of consent - as it was, in fact, mentioned in Pan Malayan,
"[t]he right of subrogation is not dependent upon, nor does it grow out of, any privity of contract or
upon written assignment of claim. It accrues simply upon payment of the insurance claim by the
46
insurer." It is only to this extent that the equity aspect of subrogation must be
understood. Indeed, subrogation under Article 2207 of the Civil Code allows the insurer, as the new
creditor who assumes ipso jure the old creditor's rights without the need of any contract, to go after
the debtor, but it does not mean that a new obligation is created between the debtor and the insurer.
Properly speaking, the insurer, as the new creditor, remains bound by the limitations of the old
creditor's claims against the debtor, which includes, among others, the aspect of prescription. Hence,
the debtor's right to invoke the defense of prescription cannot be circumvented by the mere expedient
of successive payments of certain insurers that purport to create new obligations when, in fact, what
remains subsisting is only the original obligation. Verily, equity should not be stretched to the
prejudice of another.
To better understand the concept of legal subrogation under Article 2207 of the Civil Code as a form of
"equitable assignment," it deserves mentioning that there exist intricate differences between
assignment and subrogation, both in their legal and conventional senses. In Ledonio v. Capitol
47
Development Corporation:
An assignment of credit has been defined as an agreement by virtue of which the owner of a credit
(known as the assignor), by a legal cause - such as sale, dation in payment or exchange or donation -
and without need of the debtor's consent, transfers that credit and its accessory rights to another
(known as the assignee), who acquires the power to enforce it, to the same extent as the assignor
could have enforced it against the debtor.
On the other hand, subrogation, by definition, is the transfer of all the rights of the creditor to a third
person, who substitutes him in all his rights. It may either be legal or conventional. Legal
subrogation is that which takes place without agreement but by operation of law because of
certain acts. Conventional subrogation is that which takes place by agreement of parties.
Although it may be said that the effect of the assignment of credit is to subrogate the assignee in the
rights of the original creditor, this Court still cannot definitively rule that assignment of credit and
conventional subrogation are one and the same.
A noted authority on civil law provided a discourse on the difference between these two transactions,
to wit -
Conventional Subrogation and Assignment of Credits. - In the Argentine Civil Code, there is essentially
no difference between conventional subrogation and assignment of credit. The subrogation is merely
the effect of the assignment. In fact[,] it is expressly provided (Article 769) that conventional
redemption shall be governed by the provisions on assignment of credit.
Under our Code, however, conventional subrogation is not identical to assignment of credit. In the
former, the debtor's consent is necessary; in the latter, it is not required. Subrogation extinguishes an
obligation and gives rise to a new one; assignment refers to the same right which passes from one
person to another. The nullity of an old obligation may be cured by subrogation, such that the new
obligation will be perfectly valid; but the nullity of an obligation is not remedied by the assignment of
the creditor's right to another. x x x
This Court has consistently adhered to the foregoing distinction between an assignment of credit and a
conventional subrogation. Such distinction is crucial because it would determine the necessity of the
debtor's consent. In an assignment of credit, the consent of the debtor is not necessary in
order that the assignment may fully produce the legal effects. What the law requires in an
assignment of credit is not the consent of the debtor, but merely notice to him as the
assignment takes effect only from the time he has knowledge thereof. A creditor may,
therefore, validly assign his credit and its accessories without the debtor's consent. On the other
hand, conventional subrogation requires an agreement among the parties concerned - the
original creditor, the debtor, and the new creditor. It is a new contractual relation based on
the mutual agreement among all the necessary parties. 48 (Emphases and underscoring supplied)
As discussed above, in an assignment of credit, the consent of the debtor is not necessary in order
that the assignment may fully produce legal effects (as notice to the debtor suffices); also, in
assignment, no new contractual relation between the assignee/new creditor and debtor is created. On
the other hand, in conventional subrogation, an agreement between all the parties concerning the
substitution of the new creditor is necessary. Meanwhile, legal subrogation produces the same
effects as assignment and also, no new obligation is created between the subrogee/new
creditor and debtor. As observed in commentaries on the subject:
The effect of legal subrogation is to transfer to the new creditor the credit and all the rights and
actions that could have been exercised by the former creditor either against the debtor or against
third persons, be they guarantors or mortgagors.Simply stated, except only for the change in the
person of the creditor, the obligation subsists in all respects as before the
novation.49 (Emphasis supplied)
Unlike assignment, however, legal subrogation, to produce effects, does not need to be agreed upon
by the subrogee and subrogor, unlike the need of an agreement between the assignee and assignor.
As mentioned, "[l]egal subrogation is that which takes place without agreement but by operation of
50
law because of certain acts," as in the case of payment of the insurer under Article 2207 of the Civil
Code.
In sum, as legal subrogation is not equivalent to conventional subrogation, no new obligation is
created by virtue of the insurer's payment under Article 2207 of the Civil Code; also, as legal
subrogation is not the same as an assignment of credit (as the former is in fact, called an "equitable
assignment"), no privity of contract is needed to produce its legal effects. Accordingly, "the insurer
can take nothing by subrogation but the rights of the insured, and is subrogated only to such rights as
the insured possesses. This principle has been frequently expressed in the form that the rights of the
insurer against the wrongdoer cannot rise higher than the rights of the insured against such
wrongdoer, since the insurer as subrogee, in contemplation of law, stands in the place of the insured
and succeeds to whatever rights he may have in the matter.Therefore, any defense which a
wrongdoer has against the insured is good against the insurer subrogated to the rights of
51
the insured," and this would clearly include the defense of prescription.
Based on the above-discussed considerations, the Court must heretofore abandon the ruling
in Vector that an insurer may file an action against the tortfeasor within ten (10) years from the time
the insurer indemnifies the insured. Following the principles of subrogation, the insurer only
steps into the shoes of the insured and therefore, for purposes of prescription,inherits only
the remaining period within which the insured may file an action against the wrongdoer. To
be sure, the prescriptive period of the action that the insured may file against the wrongdoer begins at
the time that the tort was committed and the loss/injury occurred against the insured. The
indemnification of the insured by the insurer only allows it to be subrogated to the former's rights, and
does not create a new reckoning point for the cause of action that the insured originally has against
the wrongdoer.
Be that as it may, it should, however, be clarified that this Court's abandonment of the Vectordoctrine
should be prospective in application for the reason that judicial decisions applying or interpreting the
52
laws or the Constitution, until reversed, shall form part of the legal system of the Philippines. Unto
this Court devolves the sole authority to interpret what the law means, and all persons are bound to
53
follow its interpretation. As explained in De Castro v. Judicial and Bar Council:
Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria that must control the
actuations, not only of those called upon to abide by them, but also of those duty-bound to enforce
obedience to them.54
Hence, while the future may ultimately uncover a doctrine's error, it should be, as a general rule,
55
recognized as a "good law" prior to its abandonment. In Philippine International Trading Corporation
56
Commission on Audit, it was elucidated that:
It is consequently clear that a judicial interpretation becomes a part of the law as of the date that law
was originally passed, subject only to the qualification that when a doctrine of this Court is overruled
and a different view is adopted, and more so when there is a reversal thereof, the new doctrine
should be applied prospectivelv and should not apply to parties who relied on the old
doctrine and acted in good faith. To hold otherwise would be to deprive the law of its quality of
fairness and justice then, if there is no recognition of what had transpired prior to such
adjudication.57 (Emphasis and underscoring supplied)
58
In Pesca v. Pesca the Court further elaborated:
The "doctrine of stare decisis," ordained in Article 8 of the Civil Code, expresses that judicial decisions
applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows
the settled legal maxim - "legis interpretado legis vim obtinet" - that the interpretation placed upon
the written law by a competent court has the force of law. The interpretation or construction placed by
the courts establishes the contemporaneous legislative intent of the law. The [said interpretation or
construction] would thus constitute a part of that law as of the date the statute is enacted. It is only
when a prior ruling of this Court finds itself later overruled, and a different view is adopted,
that the new doctrine may have to be applied prospectively in favor of parties who have
relied on the old doctrine and have acted in good faith in accordance therewith under the
familiar rule of "lex prospicit, non respicit."59 (Emphasis and underscoring supplied)
With these in mind, the Court therefore sets the following guidelines relative to the application
of Vector and this Decision vis-a-vis the prescriptive period in cases where the insurer is subrogated to
the rights of the insured against the wrongdoer based on a quasi-delict:
1. For actions of such nature that have already been filed and are currently pending before the
courts at the time of the finality of this Decision, the rules on prescription prevailing at the time the
action is filed would apply. Particularly:
(a) For cases that were filed by the subrogee-insurer during the applicability of theVector ruling (i.e.,
from Vector's finality on August 15, 2013 60 up until the finality of this Decision), the prescriptive period
is ten (10) years from the time of payment by the insurer to the insured, which gave rise to an
obligation created by law.
Rationale: Since the Vector doctrine was the prevailing rule at this time, issues of prescription must
be resolved under Vector's parameters.
(b) For cases that were filed by the subrogee-insurer prior to the applicability of theVector ruling (i.e.,
before August 15, 2013), the prescriptive period is four (4) years from the time the tort is committed
against the insured by the wrongdoer.
Rationale: The Vector doctrine, which espoused unique rules on legal subrogation and prescription as
aforedescribed, was not yet a binding precedent at this time; hence, issues of prescription must be
resolved under the rules prevailing beforeVector, which, incidentally, are the basic principles of legal
subrogation vis-a-vis prescription of actions based on quasi-delicts.
2. For actions of such nature that have not yet been filed at the time of the finality of this Decision:
(a) For cases where the tort was committed and the consequent loss/injury against the insured
occurred prior to the finality of this Decision, the subrogee-insurer is given a period not exceeding
four (4) years from the time of the finality of this Decision to file the action against the
wrongdoer; provided, that in all instances, the total period to file such case shall not exceed ten (10)
years from the time the insurer is subrogated to the rights of the insured.
Rationale: The erroneous reckoning and running of the period of prescription pursuant to
the Vector doctrine should not be taken against any and all persons relying thereon because the same
were based on the then-prevailing interpretation and construction of the Court. Hence, subrogees-
insurers, who are, effectively, only now notified of the abandonment of Vector, must be given the
benefit of the present doctrine on subrogation as ruled in this Decision.
However, the benefit of the additional period (i.e., not exceeding four [4] years) under this Decision
must not result in the insured being given a total of more than ten (10) years from the time the
insurer is subrogated to the rights of the insured (i.e., the old prescriptive period in Vector);
otherwise, the insurer would be able to unduly propagate its right to file the case beyond the ten (10)-
year period accorded byVector to the prejudice of the wrongdoer.
(b) For cases where the tort was committed and the consequent loss/injury against the insured
occurred only upon or after the finality of this Decision, the Vectordoctrine would hold no
application. The prescriptive period is four (4) years from the time the tort is committed against the
insured by the wrongdoer.
Rationale: Since the cause of action for quasi-delict and the consequent subrogation of the insurer
would arise after due notice of Vector's abandonment, all persons would now be bound by the present
doctrine on subrogation as ruled in this Decision.
Application to the Case at Bar
In this case, it is undisputed that the water leak damage incident, which gave rise to Copylandia's
cause of action against any possible defendants, including NASCL and petitioner, happened onMay 9,
2006. As this incident gave rise to an obligation classified as a quasi-delict, Copylandia would have
61
only had four (4) years, or until May 9, 2010, within which to file a suit to recover damages. When
Copylandia's rights were transferred to respondent by virtue of the latter's payment of the former's
insurance claim on November 2, 2006, as evidenced by the Loss and Subrogation
62
Receipt, respondent was likewise bound by the same prescriptive period. Since it was only on:
(a) May 20, 2010 when respondent made an extrajudicial demand to NASCL, and thereafter, filed its
complaint; (b) October 6, 2011 when respondent amended its complaint to implead CHI as party-
defendant; and (c) April 21, 2014 when respondent moved to further amend the complaint in order
to implead petitioner as party-defendant in lieu of CHI, prescription - if adjudged under the present
parameters of legal subrogation under this Decision - should have already set in.
However, it must be recognized that the prevailing rule applicable to the pertinent events
of this case is Vector. Pursuant to the guidelines stated above, specifically underguideline 1 (a),
the Vector doctrine - which was even relied upon by the courts a quo - would then apply. Hence, as
63
the amended complaint impleading petitioner was filed on April 21, 2014, which is within ten (10)
years from the time respondent indemnified Copylandia for its injury/loss,i.e., on November 2, 2006,
the case cannot be said to have prescribed under Vector. As such, the Court is constrained to deny the
instant petition.
WHEREFORE, the petition is DENIED. The Decision dated November 13, 2015 and the Resolution
dated February 26, 2016 of the Court of Appeals in CA-G.R. SP No. 138147 are
hereby AFFIRMED with MODIFICATION based on the guidelines stated in this Decision.
SO ORDERED.
