G.R. No. 172156 ; November 23, 2007
MALAYAN INSURANCE CO., INC., Petitioner, vs. REGIS BROKERAGE CORP., Respondent.

FACTS

Petitioner Malayan Insurance Co., Inc. paid consignee ABB Koppel, Inc. for the loss of 55 motors from a shipment delivered by respondent Regis Brokerage Corp. Claiming subrogation rights, Malayan sued Regis for damages. During trial, Malayan presented a Marine Risk Note dated March 21, 1995, as proof of insurance. Regis objected, arguing the note was invalid as it was issued after the loss was known on March 7, 1995.
The Metropolitan Trial Court ruled in favor of Malayan, a decision affirmed by the Regional Trial Court. The Court of Appeals reversed, dismissing the complaint. It held the Marine Risk Note invalid for insuring a known loss under the Insurance Code. It also found the subrogation receipt improperly authenticated. Malayan moved for reconsideration, arguing the Risk Note was issued pursuant to a pre-existing open policy dated January 20, 1995, but admitted this policy was not presented as evidence at trial.

ISSUE

Whether Malayan, as subrogee, is entitled to relief despite its failure to present in evidence the insurance contract that established its right of action.

RULING

No. The Supreme Court denied the petition, affirming the Court of Appeals. The core of Malayan’s action for recoupment is its right of subrogation, which springs from its payment under a valid insurance contract. A cause of action for subrogation requires proof of the insurer’s relationship with the insured, which is established by the insurance policy. Malayan failed to discharge this fundamental burden.
The Court emphasized it is not a trier of facts. The only evidence Malayan offered to prove the insurance contract was the Marine Risk Note. The Court of Appeals correctly found this document insufficient, as it was issued after the loss occurred, violating the principle that insurance covers future or unknown risks. Malayan’s new argument—that the Risk Note was derived from an earlier open policy—was unavailing because that policy was never offered or admitted as evidence during trial. Evidence submitted for the first time on appeal, like the copy of the Marine Insurance Policy attached to the petition, is not part of the record and cannot be considered. Consequently, Malayan failed to prove the existence of a valid insurance contract, which is the very foundation of its subrogatory right. Without this proof, it had no legal capacity to sue, and its complaint was correctly dismissed.