Week 6 Case 15 G.R. No. 147839 Flashcards
What is the principle of res perit domino (or casum sentit dominus)?
‘accident is felt by the owner’
‘the thing is lost to the owner’
‘the thing perishes with the owner’
It is the owner of the thing who bears the consequences of the loss.
Basis:
Ownership is not transferred until delivered.
What were the reasons why the factual issues of this case were reviewed by the court?
Jurisprudence has recognized several exceptions in which
factual issues may be resolved by this Court, such as:
(1) when the findings are
grounded entirely on speculation, surmises or conjectures;
(2) when the inference made is manifestly mistaken, absurd or impossible;
(3) when there is grave abuse of discretion;
(4) when the judgment is based on a
misapprehension of facts;
(5) when the findings of facts are conflicting;
(6) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant
and the appellee;
(7) when the findings are contrary to the trial court;
(8) when the findings are conclusions without citation of specific evidence on
which they are based;
(9) when the facts set forth in the petition as well as in
the petitioner’s main and reply briefs are not disputed by the respondent;
(10)
when the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; and
(11) when the CA
manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different
conclusion.
Exceptions (4), (5), (7), and (11) apply to the present petition.
How was the insurance interpreted?
It is well-settled that when the words of a contract are plain and readily understood, there is no room for construction. In this case, the questioned insurance policies provide coverage for “book debts in connection with ready-made clothing materials which have been sold or delivered to various customers and dealers of the Insured anywhere in the Philippines.” ; and defined book debts as the “unpaid account still appearing in the Book of Account of the Insured 45 days after the time of the loss covered under this Policy.” Nowhere is it provided in the questioned insurance policies that the subject of the insurance is the goods sold and delivered to the customers and dealers of the insured.
Indeed, when the terms of the agreement are clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties, the terms are to be understood literally just as they appear on the face of the contract. Thus, what were insured against were the accounts of IMC and LSPI with petitioner which remained unpaid 45 days after the loss through fire, and not the loss or destruction of the goods delivered.
Who bears the risk of the goods delivered - the seller or the buyer?
The present case clearly falls under paragraph (1), Article 1504 of the
Civil Code:
ART. 1504. Unless otherwise agreed, the goods remain at the
seller’s risk until the ownership therein is transferred to the buyer, but
when the ownership therein is transferred to the buyer the goods are at
the buyer’s risk whether actual delivery has been made or not, except
that:
(1) Where delivery of the goods has been made to the buyer
or to a bailee for the buyer, in pursuance of the contract and the
ownership in the goods has been retained by the seller merely
to secure performance by the buyer of his obligations under
the contract, the goods are at the buyer’s risk from the time of
such delivery; (Emphasis supplied)
xxx xxx xxx
Thus, when the seller retains ownership only to insure that the buyer will
pay its debt, the risk of loss is borne by the buyer. Accordingly, petitioner
bears the risk of loss of the goods delivered.
Was the principle of res perit domino applied in this case? What was the applicable principle?
Did IMC and LSPI completely lose interest over the goods?
IMC and LSPI did not lose complete interest over the goods. They have an insurable interest until full payment of the value of the delivered goods. Unlike the civil law concept of res perit domino, where ownership is the basis for consideration of who bears the risk of loss, in property insurance, one’s interest is not determined by concept of title, but whether insured has substantial economic interest in the property.
How was insurable interest defined in the Insurance Code?
Section 13 of our Insurance Code defines insurable interest as “every interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured.” Parenthetically, under Section 14 of the same Code, an insurable interest in property may consist in: (a) an existing interest; (b) an inchoate interest founded on existing interest; or (c) an expectancy, coupled with an existing interest in that out of which the expectancy arises.
What was the insurable interest of IMC and LSPI pertained?
Therefore, an insurable interest in property does not necessarily imply a property interest in, or a lien upon, or possession of, the subject matter of the insurance, and neither the title nor a beneficial interest is requisite to the existence of such an interest, it is sufficient that the insured is so situated with reference to the property that he would be liable to loss should it be injured or destroyed by the peril against which it is insured. Anyone has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction. Indeed, a vendor or seller retains an insurable interest in the property sold so long as he has any interest therein, in other words, so long as he would suffer by its destruction, as where he has a vendor’s lien. In this case, the insurable interest of IMC and LSPI pertain to the unpaid accounts appearing in their Books of Account 45 days after the time of the loss covered by the policies.
Is the obligation to pay a generic thing? What is its applicable Civil Code provisions?
Under Article 1263 of the Civil Code, “[i]n an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation.” If the obligation is generic in the sense that the object thereof is designated merely by its class or genus without any particular designation or physical segregation from all others of the same class, the loss or destruction of anything of the same kind even without the debtor’s fault and before he has incurred in delay will not have the effect of extinguishing the obligation. This rule is based on the principle that the genus of a thing can never perish. Genus nunquan perit. An obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific property of the debtor.
What was the most relevant matter to this case?
Thus, whether fire is a fortuitous event or petitioner was negligent are matters immaterial to this case. What is relevant here is whether it has been established that petitioner has outstanding accounts with IMC and LSPI.
Did IMC successfully establish its claim?
With respect to IMC, the respondent has adequately established its claim. Exhibits “C” to “C-22” show that petitioner has an outstanding account with IMC in the amount of P2,119,205.00. Exhibit “E” is the check voucher evidencing payment to IMC. Exhibit “F” is the subrogation receipt executed by IMC in favor of respondent upon receipt of the insurance proceeds. All these documents have been properly identified, presented and marked as exhibits in court. The subrogation receipt, by itself, is sufficient to establish not only the relationship of respondent as insurer and IMC as the insured, but also the amount paid to settle the insurance claim. The right of subrogation accrues simply upon payment by the insurance company of the insurance claim. Respondent’s action against petitioner is squarely sanctioned by Article 2207 of the Civil Code which provides:
Art. 2207. If the plaintiff’s property has been insured, and he has received indemnity from the insurance company for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract.
Did LSPI successfully establish its claim?
No.
As to LSPI, respondent failed to present sufficient evidence to prove its
cause of action. No evidentiary weight can be given to Exhibit “F Levi Strauss”,
42 a letter dated April 23, 1991 from petitioner’s General Manager, Stephen S.
Gaisano, Jr., since it is not an admission of petitioner’s unpaid account with
LSPI. It only confirms the loss of Levi’s products in the amount of P535,613.00
in the fire that razed petitioner’s building on February 25, 1991.
Moreover, there is no proof of full settlement of the insurance claim of
LSPI; no subrogation receipt was offered in evidence. Thus, there is no
evidence that respondent has been subrogated to any right which LSPI may
have against petitioner. Failure to substantiate the claim of subrogation is fatal
to petitioner’s case for recovery of the amount of P535,613.00.
