- Petitioner
- Vector Shipping Corporation
- Respondent
- American Home Assurance Company
- Citation
- G.R. No. 159213
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Bersamin, J.
- Decided
- July 3, 2013
Summary
This case involves insurance subrogation arising from a maritime collision between M/T Vector and M/V Doña Paz on December 20, 1987, which destroyed Caltex's petroleum cargo. After American Home Assurance paid Caltex P7,455,421.08 in insurance proceeds, it sued Vector Shipping and Francisco Soriano to recover the amount through subrogation rights. The key legal issue was whether the action prescribed in 4 years (quasi-delict) or 10 years (obligation created by law). The Supreme Court clarified that insurance subrogation under Article 2207 of the Civil Code creates a cause of action based on an obligation created by law, which prescribes in 10 years under Article 1144(2), not 4 years under Article 1146. The Court affirmed the joint and several liability of Vector and Soriano for the full amount, establishing important precedent on the prescriptive period for insurance subrogation claims.
Intellegal Wiki · Key Holding
The Court held that an insurer's subrogation claim is an obligation created by law with a ten-year prescriptive period under Article 1144(2). This rule was later abandoned in Henson v. UCPB (G.R. 223134, 2019): a subrogated insurer's claim now prescribes with the underlying obligation — four years for a quasi-delict (Art. 1146). Henson applies prospectively, with transitional guidelines for cases filed under the old rule.
An editorially maintained summary of the rule this Supreme Court decision is cited for — not legal advice.