GR 223134 Bersamin (Digest)
G.R. No. 223134 , August 14, 2019
VICENTE G. HENSON, JR., PETITIONER, VS. UCPB GENERAL INSURANCE CO., INC., RESPONDENT.
FACTS
Copylandia’s equipment was damaged by a water leak in a building owned by Vicente Henson on May 9, 2006. Copylandia’s insurer, UCPB General Insurance Co., Inc. (UCPBGen), indemnified Copylandia on November 2, 2006, and was thereby subrogated to Copylandia’s rights. On April 21, 2014, UCPBGen moved to implead Henson as a defendant in its damage suit. Henson opposed, arguing the action, arising from quasi-delict, had prescribed in four years from the leak on May 9, 2006. The Regional Trial Court and the Court of Appeals ruled for UCPBGen, holding the insurer’s cause of action was based on legal subrogation under Article 2207 of the Civil Code, an obligation created by law prescribing in ten years from the date of indemnification (November 2, 2006). Thus, the action filed in 2014 was timely.
ISSUE
Whether the prescriptive period for an insurer’s subrogatory action against a tortfeasor is ten years from indemnification or if it inherits the insured’s original prescriptive period, which begins from the tort.
RULING
The Supreme Court, in its majority decision, abandoned the ruling in Vector Shipping Corporation v. American Home Assurance Company. The Court held that legal subrogation under Article 2207 does not create a new cause of action with a fresh ten-year prescriptive period. The insurer merely steps into the shoes of the insured. Consequently, the insurer inherits the insured’s cause of action against the wrongdoer, including its original prescriptive period and reckoning point. Since the insured’s action against Henson was based on quasi-delict, it prescribed in four years from the tortious event on May 9, 2006. UCPBGen’s attempt to sue Henson in 2014 was therefore barred by prescription. The abandonment of the Vector doctrine was applied prospectively. In his dissenting opinion, Chief Justice Bersamin argued there were no compelling grounds to overturn Vector, which correctly held that subrogation under Article 2207 gives rise to a cause of action created by law, prescribing in ten years. He maintained the ruling of the Court of Appeals should be affirmed.