GR 101439; (June, 1999) (Digest)
G.R. No. 101439 June 21, 1999
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. COURT OF APPEALS, VICTORIA JAIME VDA. DE KHO, et al., respondents.
FACTS
On May 9, 1979, a Chevrolet truck owned by the National Food Authority (NFA) and driven by its employee, Guillermo Corbeta, collided with a Toyota Tamaraw owned by Victor Uy. The truck, which was insured against third-party liability by GSIS, crossed over to the opposite lane. The collision resulted in the deaths of five Tamaraw passengers, including relatives of the respondents, and injuries to ten others, including respondents Victoria Kho and Gloria Calabia. Three consolidated civil cases for damages were filed. The trial court found Corbeta’s negligence to be the proximate cause of the collision. It held NFA, Corbeta, GSIS (as insurer), and Mabuhay Insurance (insurer of the Tamaraw) jointly and severally liable to the victims for various damages, including compensatory and moral damages. The Court of Appeals affirmed the trial court’s decision. GSIS filed this petition, arguing it should only be liable up to the statutory limit for compulsory motor vehicle liability insurance and that its liability should be subsidiary, not solidary, with the NFA and Corbeta.
ISSUE
Whether the GSIS’s liability as an insurer under the compulsory motor vehicle liability insurance is solidary with the principal tortfeasors and whether such liability is limited to the statutory indemnity schedule.
RULING
The Supreme Court denied the petition and affirmed the decisions of the lower courts. On the nature of liability, the Court ruled that GSIS’s liability is solidary with its insured, the NFA, and the negligent driver, Corbeta. An insurer’s liability under a third-party liability insurance policy is direct and primary to the injured third party. The insurance contract is deemed a stipulation pour autrui, allowing the injured party to sue the insurer directly. Consequently, the insurer’s obligation is not subsidiary but solidary with the insured under Article 1207 of the Civil Code, as the nature of the obligation—to indemnify the victim—requires solidarity. Regarding the limit of liability, the Court held that the statutory indemnity schedule under the compulsory motor vehicle liability insurance applies only to cases exclusively grounded on that compulsory coverage. Here, the respondents’ cause of action in Civil Case No. 2256 was based on quasi-delict against NFA and Corbeta. The insurance policy sued upon was a separate, comprehensive third-party liability insurance, not merely the compulsory coverage. Therefore, GSIS’s liability is governed by the limits of its insurance contract with NFA, not the lower compulsory schedule. The trial court’s award, being within the policy limits, was upheld.