GR L 54140; (October, 1986) (Digest)
G.R. No. L-54140 and G.R. No. L-62001, October 14, 1986
Filipino Merchants Insurance Company, Inc. vs. Hon. Jose Alejandro, et al. and Filipino Merchants Insurance Company, Inc. vs. Hon. Alfredo Benipayo, et al.
FACTS
These consolidated petitions involve two civil cases where Filipino Merchants Insurance Company (FMIC) was sued by its insured consignees, Choa Tiek Seng and Joseph Benzon Chua, for indemnity under marine cargo insurance policies covering shipments that sustained loss or damage upon arrival. The goods were delivered to the consignees on December 17, 1976, and between January 25-28, 1977, respectively. The consignees filed their suits against FMIC within one year from delivery.
In its defense, FMIC filed third-party complaints against the carrier respondents, Frota Oceanica Brasiliera and Australia-West Pacific Line, seeking indemnity and subrogation. These third-party complaints were filed more than one year after the delivery of the goods. The carriers moved to dismiss on the ground of prescription, invoking the one-year period to file suit under Section 3(6) of the Carriage of Goods by Sea Act (COGSA).
ISSUE
Whether the one-year prescriptive period under COGSA for filing suit against a carrier applies to an insurer like FMIC, even when the insurer files a third-party complaint after the one-year period but within the pendency of a timely-filed suit by the insured against the insurer.
RULING
Yes, the one-year prescriptive period applies to the insurer. The Supreme Court affirmed the dismissal of FMIC’s third-party complaints. The legal logic is anchored on the nature of subrogation and the substantive right created by COGSA’s prescriptive period.
Section 3(6) of COGSA discharges the carrier from all liability unless suit is brought within one year after delivery of the goods. This provision is applicable to all parties bringing a claim for loss or damage, including an insurer who stands as a subrogee. Subrogation merely places the insurer in the shoes of the insured; it confers no greater rights than those possessed by the insured consignee. Since the insured’s right of action against the carrier prescribes in one year, the insurer’s derivative right is subject to the identical time bar.
The Court rejected FMIC’s argument that the filing date of the main action by the insured should control for reckoning the prescriptive period for the third-party complaint. A third-party complaint, while ancillary procedurally, does not create independent substantive rights. It cannot revive or extend a claim that has already prescribed. FMIC could only validly file a third-party complaint if it still possessed a subsisting right of action against the carriers. At the time it filed its complaints, more than one year had elapsed from the delivery dates, thus its direct action against the carriers had already prescribed. The insureds’ timely suits against FMIC did not toll the one-year period for FMIC’s separate claim against the carriers. Consequently, the third-party complaints were correctly dismissed.