Company X procured an “open-‐policy” marine insurance from Y Insurance, a foreign corporation. The insurance was for a transshipment of certain wooden work tools and workbenches purchased for consignee Z. The cargo, packed inside one container van was shipped from Hamburg, Germany en route to Manila, Philippines. The ship arrived and docked where cargo was received by Aboitiz Shipping Corporation, thereafter it issued a bill of lading containing a notation ‘grounded outside warehouse’. It was then shipped to Cebu City and was released to Z. Two days after its release, Aboitiz received a call from Z informing it that the cargo sustained water damage. Z then informed the Philippine office of Y Insurance for insurance claims. Y Insurance got an official weather report from PAGASA, it would appear that heavy rains caused water damage to the shipment, noticeably the shipment was placed outside the warehouse of Aboitiz based on the bill of lading containing an notation “grounded outside the warehouse”. Aboitiz refused to settle the claim, Y Insurance paid the amount of Php 280, 176.92 to consignee Z, and a subrogation receipt was thereafter signed.
A case for collection of actual damages with interest and attorney’s fees was filed with RTC. Aboitiz disavowed any liability and asserted that the claim had no factual and legal bases, and that complaint had no cause of action, plaintiff Y Insurance had no personality to sue, cause of action was barred, suit was premature there being no claim made upon Aboitiz. RTC rendered decision against Y Insurance and case was elevated to CA, which reversed RTC decision. Case was then elevated to SC.
a. Is Respondent Y Insurance the real party-in-interest that possesses the right of subrogation to claim reimbursement from Aboitiz?
b. Is this right to subrogation an absolute right?
a. YES. A foreign corporation not licensed to do business in the Philippines is not absolutely incapacitated from filing a suit in local courts. Only when that foreign corporation is “transacting” or “doing business” in the country will a license be necessary before it can institute suits. It may, however, bring suits on isolated business transactions, which is not prohibited under Philippine law. Thus, this Court has held that a foreign insurance company may sue in the Philippine courts upon the marine insurance policies issues by it abroad to cover international-‐bound cargoes shipped by a Philippine carrier, even if it has no license to do business in this country. It is the act of engaging in business without the prescribed license, and not the lack of license per se, which bars a foreign corporation from access to our courts. Thus, the payment by the insurer to the assured operates as an equitable assignment of all remedies the assured may have against the third party who caused the damage. Subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon written assignment of claim. It accrues simply upon payment of the insurance by the insurer. (Aboitiz Shipping Corporation vs. Insurance Company of North America, G.R. No. 168402, August6, 2008, [Reyes, R.T.,J.])
b. NO. This Right of Subrogation has its limitations, to wit:
1. Both the insurer and the consignee are bound by the contractual stipulations under the bill of lading;
2. The insurer can be subrogated only to the rights as the insured may have against the wrongdoer.