G.R. No. 229877 , July 15, 2020
FILCON READY MIXED, INC. AND GILBERT S. VERGARA, PETITIONERS, VS. UCPB GENERAL INSURANCE COMPANY, INC., RESPONDENT.

FACTS

Marco P. Gutang owned a Honda Civic insured by respondent UCPB General Insurance Company, Inc. On November 16, 2007, the insured vehicle was damaged in a vehicular accident in Quezon City involving a cement mixer owned by petitioner Filcon Ready Mixed Inc. and driven by petitioner Gilbert S. Vergara. The Traffic Accident Investigation Report indicated that Vergara left the cement mixer with its engine running on an uphill portion, causing it to roll backward and hit other vehicles, including Gutang’s insured car. Gutang had the car repaired at Honda Cars Pasig City. As the insurer, respondent paid the repair cost of P195,409.50. Gutang then executed a “Release and Discharge” document, assigning his claims against the petitioners to respondent. By virtue of this subrogation, respondent sent a demand letter to petitioners on September 1, 2011, which was ignored. Respondent filed a complaint for sum of money before the Metropolitan Trial Court (MeTC) on February 1, 2012. Petitioners raised the affirmative defense of prescription, arguing that the action, based on quasi-delict, prescribed in four years from the accident date (November 16, 2007), making the filing on February 1, 2012, beyond the prescriptive period. The MeTC and the Regional Trial Court (RTC) dismissed the complaint on the ground of prescription. The Court of Appeals reversed, applying the ruling in Vector Shipping Corp. v. American Home Assurance Company, which held that an action based on legal subrogation under Article 2207 of the Civil Code is an obligation created by law prescribable in ten years. Since respondent indemnified Gutang on February 6, 2008, the filing on February 1, 2012, was within the ten-year period.

ISSUE

Is respondent’s action for money claims against petitioners barred by prescription?

RULING

No, the action is not barred by prescription. The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. While the Court abandoned the Vector doctrine in the later case of Henson, Jr. v. UCPB General Insurance Co., Inc., holding that an insurer-subrogee merely steps into the shoes of the insured and is bound by the same prescriptive period (four years for quasi-delict) that began from the commission of the tort, this abandonment was declared to be prospective in application. Applying the guidelines set in Henson, the Court found that the present case falls under the category of actions filed during the applicability of the Vector ruling (from its finality on August 15, 2013, until the finality of Henson). Since respondent filed its complaint on February 1, 2012, which was before the finality of Vector, the prescriptive period is four years from the time the tort was committed (November 16, 2007). However, the Court further held that the prescriptive period was interrupted by the extrajudicial demand letter sent by respondent to petitioners on September 1, 2011. This demand letter, which petitioners did not deny receiving, effectively renewed the prescriptive period, giving respondent a fresh period of four years from September 1, 2011, within which to file the action. Consequently, the filing of the complaint on February 1, 2012, was well within the four-year prescriptive period. The case was remanded to the trial court for further proceedings.