Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=52998:gr-174116-2009&catid=1522&Itemid=566
Timestamp: 2019-04-26 12:35:37+00:00

Document:
G.R. No. 174116 - Eastern Shipping Lines, Inc. v. Prudential Guarantee and Assurance, Inc.
EASTERN SHIPPING LINES, INC., Petitioner, v. PRUDENTIAL GUARANTEE AND ASSURANCE, INC., Respondent.
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, seeking to set aside the April 26, 2006 Decision2 and August 15, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 68165.
On November 8, 1995, fifty-six cases of completely knock-down auto parts of Nissan motor vehicle (cargoes) were loaded on board M/V Apollo Tujuh (carrier) at Nagoya, Japan, to be shipped to Manila. The shipment was consigned to Nissan Motor Philippines, Inc. (Nissan) and was covered by Bill of Lading No. NMA-1.4 The carrier was owned and operated by petitioner Eastern Shipping Lines, Inc.
On August 21, 1996, as insurer of the shipment against all risks per Marine Open Policy No. 86-168 and Marine Cargo Risk Note No. 3921/95, respondent Prudential Guarantee and Assurance Inc. paid Nissan the sum of P1,047,298.34.
3) Plus costs of suit.
Both the counterclaims and crossclaims are without legal basis. The counterclaims and crossclaims are based on the assumption that the other defendant is the one solely liable. However, inasmuch as the solidary liability of the defendants have been established, the counterclaims and crossclaims must be denied.
Equal costs against Eastern Shipping Lines, Inc. and Asian Terminals, Inc.
Both petitioner and ATI appealed to the CA.
WHEREFORE, the appealed decision is AFFIRMED with MODIFICATIONS, in that (i) defendant-appellant Eastern Shipping Lines, Inc. is ordered to pay appellee (a) the amount of P904,293.75 plus interest thereon at the rate of 6% per annum from the filing of the complaint up to the finality of this judgment, when the interest shall become 12% per annum until fully paid, and (b) the costs of suit; (ii) the award of attorney's fees is DELETED; and (iii) the complaint against defendant-appellant Asian Terminals, Inc. is DISMISSED.
Petitioner then filed a motion for reconsideration, which was, however, denied by the CA in a Resolution dated August 15, 2006.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE LOWER COURT FINDING HEREIN PETITIONER LIABLE DESPITE THE FACT THAT RESPONDENT FAILED TO SUBMIT ANY INSURANCE POLICY.
The rule in our jurisdiction is that only questions of law may be entertained by this Court in a Petition for Review on Certiorari . This rule, however, is not iron-clad and admits of certain exceptions, one of which is when the CA manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion.18 In the case at bar, the records of the case contain evidence which justify the application of the exception.
Anent the first error, petitioner argues that respondent was not properly subrogated because of the non-presentation of the marine insurance policy. In the case at bar, in order to prove its claim, respondent presented a marine cargo risk note and a subrogation receipt. Thus, the question to be resolved is whether the two documents, without the Marine Insurance Policy, are sufficient to prove respondent's right of subrogation.
CONDITIONS: INSTITUTE CARGO CLAUSES "A"
In addition, petitioner also contended that the Marine Cargo Risk Note referred to "Institute Cargo Clauses A and other terms and conditions per Marine Open Policy-86-168."
Based on the forgoing, it is already evident why herein petition is meritorious. The Marine Risk Note relied upon by respondent as the basis for its claim for subrogation is insufficient to prove said claim.
As previously stated, the Marine Risk Note was issued only on November 16, 1995; hence, without a copy of the marine insurance policy, it would be impossible and simply guesswork to know whether the cargo was insured during the voyage which started on November 8, 1995. Again, without the marine insurance policy, it would be impossible for this Court to know the following: first, the specifics of the "Institute Cargo Clauses A and other terms and conditions per Marine Open Policy-86-168" as alluded to in the Marine Risk Note; second, if the said terms and conditions were actually complied with before respondent paid Nissan's claim.
A. Our Marine Cargo Underwriting Department.
A. Yes, sir, per policy issued.
A. The Marine Cargo Risk.
A. Sir, there is a Marine Open Policy.
A. It is in the office.
Atty. Alojado Can you produce that copy?
Atty. Alojado The basis of the question is the answer of the witness which says that there is another contract of insurance.
COURT Yes, that is a Marine Open Policy.
Atty. Alojado Yes, Your Honor.
But we would also like to be familiarize with that contract.
COURT Then you should know what is Marine Open Policy.
Marine Open Policy in this regard.
Atty. Zapa I think your Honor, between the plaintiff and the defendant there is no issue against the insurance.
COURT Yes because this witness it not testifying on the Marine Open Policy.
A. For this particular consignee, they have Marine Open Policy.
Atty. Alojado That was not presented.
Clearly, petitioner was not remiss when it openly objected to the non-presentation of the Marine Insurance Policy. As testified to by respondent's witness, they had a copy of the marine insurance policy in their office. Thus, respondent was already apprised of the possible importance of the said document to their cause.
In addition, this Court takes notice that notwithstanding that the RTC may have denied the repeated manifestation of petitioner of the non-presentation of the marine insurance policy, the same by itself does not exonerate respondent. As plaintiff, it was respondent's burden to present the evidence necessary to substantiate its claim.
SECTION 7. Action or defense based on document. Whenever an action or defense is based upon a written instrument or document, the substance of such instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy may, with like effect, be set forth in the pleading.
Malayan's right of recovery as a subrogee of ABB Koppel cannot be predicated alone on the liability of the respondent to ABB Koppel, even though such liability will necessarily have to be established at the trial for Malayan to recover. Because Malayan's right to recovery derives from contractual subrogation as an incident to an insurance relationship, and not from any proximate injury to it inflicted by the respondents, it is critical that Malayan establish the legal basis of such right to subrogation by presenting the contract constitutive of the insurance relationship between it and ABB Koppel. Without such legal basis, its cause of action cannot survive.
EXH "B" = Marine Cargo Risk Note No. 39821/95 Dated November 16, 1995.
It is significant that the date when the alleged insurance contract was constituted cannot be established with certainty without the contract itself. Said point is crucial because there can be no insurance on a risk that had already occurred by the time the contract was executed.33 Surely, the Marine Risk Note on its face does not specify when the insurance was constituted.
The insurance contract has not been presented. It may be assumed for the sake of argument that the subrogation receipt may nevertheless be used to establish the relationship between the petitioner [Home Insurance Corporation] and the consignee [Nestlé Phil.] and the amount paid to settle the claim. But that is all the document can do. By itself alone, the subrogation receipt is not sufficient to prove the petitioner's claim holding the respondent [Mabuhay Brokerage Co., Inc.] liable for the damage to the engine.
Indeed, jurisprudence has it that the marine insurance policy needs to be presented in evidence before the trial court or even belatedly before the appellate court. In Malayan Insurance Co., Inc. v. Regis Brokerage Corp., the Court stated that the presentation of the marine insurance policy was necessary, as the issues raised therein arose from the very existence of an insurance contract between Malayan Insurance and its consignee, ABB Koppel, even prior to the loss of the shipment. In Wallem Philippines Shipping, Inc. v. Prudential Guarantee and Assurance, Inc., the Court ruled that the insurance contract must be presented in evidence in order to determine the extent of the coverage. This was also the ruling of the Court in Home Insurance Corporation v. Court of Appeals.
However, as in every general rule, there are admitted exceptions. In Delsan Transport Lines, Inc. v. Court of Appeals, the Court stated that the presentation of the insurance policy was not fatal because the loss of the cargo undoubtedly occurred while on board the petitioner's vessel, unlike in Home Insurance in which the cargo passed through several stages with different parties and it could not be determined when the damage to the cargo occurred, such that the insurer should be liable for it.
Although the CA may have ruled that the damage to the cargo occurred while the same was in petitioner's custody, this Court cannot apply the ruling in International to the case at bar. In contrast, unlike in International where there was no issue as regards the provisions of the marine insurance policy, such that the presentation of the contract itself is necessary for perusal, herein petitioner had repeatedly objected to the non-presentation of the marine insurance policy and had manifested its desire to know the specific provisions thereof. Moreover, and the same is critical, the marine risk note in the case at bar is questionable because: first, it is dated on the same day the cargoes arrived at the port of Manila and not during the duration of the voyage; second, without the Marine Insurance Policy to elucidate on the specifics of the terms and conditions alluded to in the marine risk note, it would be simply guesswork to know if the same were complied with.
In conclusion, this Court rules that based on the applicable jurisprudence, because of the inadequacy of the Marine Cargo Risk Note for the reasons already stated, it was incumbent on respondent to present in evidence the Marine Insurance Policy, and having failed in doing so, its claim of subrogation must necessarily fail.
Because of the foregoing, it would be unnecessary to discuss the second error raised by petitioner.
WHEREFORE, premises considered, the petition is GRANTED. The April 26, 2006 Decision and August 15, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 68165 are hereby REVERSED and SET ASIDE. The Complaint in Civil Case No. 96-1665 is DISMISSED.
2 Penned by Associate Justice Edgardo P. Cruz, with Associate Justices Rosalinda Asuncion-Vicente and Sesinando E. Villon, concurring; id. at 24-34.
7 Exhibit J; records pp. 181-183.
9 Exhibit A; records, pp. 76-78.
15 420 Phil. 824, 835 (2001).
18 Philippine Charter Insurance Corporation v. Unknown Owner of the Vessel M/V "National Honor," G.R. No. 161833, July 8, 2005, 463 SCRA 202, 215.
19 Aboitiz Shipping Corporation v. Philippine American General Insurance Co., G.R. No. 77530, October 5, 1989, 178 SCRA 357, 360-361.
20 G.R. No. 161539, June 27, 2008, 556 SCRA 194.
23 G.R. No. 172156, November 23, 2007, 538 SCRA 681.
27 TSN, May 20, 1997, pp. 14-18.
28 TSN, July 3, 1997, pp. 9-10.
31 Malayan Insurance Co., Inc. v. Regis Brokerage Corp., supra note 23, at 690.
33 Malayan Insurance Co., Inc. v. Regis Brokerage Corp., supra note 23, at 694.
34 G.R. No. 152158, February 7, 2003, 397 SCRA 158.
36 International Container Terminal Services, Inc. v. FGU Insurance Corporation, supra note 20, at 203-204.

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