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    Malayan Insurance Corp. v. Court of Appeals

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    June Karl Cepida
    The document discusses a case where a vehicle accident victim sued both the driver and owner of the vehicle. The court ruled that the driver and owner were jointly liable, and the insurer was also liable to the victim based on its insurance contract but was not jointly liable with the driver and owner. Upon paying the victim, the insurer has the right to demand reimbursement from the driver's employer through subrogation.

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    Malayan Insurance Corp. v. Court of Appeals

    Uploaded by

    June Karl Cepida
    15 views3 pages
    The document discusses a case where a vehicle accident victim sued both the driver and owner of the vehicle. The court ruled that the driver and owner were jointly liable, and the insurer was also liable to the victim based on its insurance contract but was not jointly liable with the driver and owner. Upon paying the victim, the insurer has the right to demand reimbursement from the driver's employer through subrogation.

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    malayan Insurance Corp. v. Court of Appeals

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    The document discusses a case where a vehicle accident victim sued both the driver and owner of the vehicle. The court ruled that the driver and owner were jointly liable, and the insurer was also liable to the victim based on its insurance contract but was not jointly liable with the driver and owner. Upon paying the victim, the insurer has the right to demand reimbursement from the driver's employer through subrogation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views3 pages

    Malayan Insurance Corp. v. Court of Appeals

    Uploaded by

    June Karl Cepida
    The document discusses a case where a vehicle accident victim sued both the driver and owner of the vehicle. The court ruled that the driver and owner were jointly liable, and the insurer was also liable to the victim based on its insurance contract but was not jointly liable with the driver and owner. Upon paying the victim, the insurer has the right to demand reimbursement from the driver's employer through subrogation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Malayan Insurance Corp. v.

    Court of Appeals
    G.R. No. 119599, [March 20, 1997], 336 PHIL 977-989
    Doctrine:
    The victim of a vehicle accident may hold liable both the offending party
    (driver) and owner of the vehicle which is insured, in cases where the offending
    party (driver) is not the owner of the vehicle. In which case, they will both be
    held solidarily liable, subject to the right of the insured party to demand
    reimbursement from the insurer.
    Facts:
    Sio Choy insured his jeep with Malayan Insurance Co., Inc. The insurance
    coverage was for “own damage” and “third-party liability.”
    The jeep then collided with a bus while being driven by an employee of San
    Leon Rice Mill, Inc. (SLRMI) which this resulted to damages to the jeep, death of
    the driver, and injuries to Martin Vallejos, a passenger of the jeep.
    Vallejos filed a complaint for damages against Sio Choy, Malayan Insurance,
    and the bus company. Sio Choy then filed a cross-claim against the insurer
    Malayan on ground that he had actually paid the injured passenger.
    The insurer also filed a third-party complaint against SLRMI, as the
    employer of the negligent driver.
    The lower courts held the Sio Choy, Malayan Insurance Co., and driver’s
    employer jointly and severally liable.
    Issue:
    Whether the insured Sio Choy, SLRMI, or the insurer Malayan Insurance is
    liable for the third-party liability insurance.
    Ruling:
    The SC held that only Sio Choy and SLRMI were solidarily liable to the
    victim, but upon payment by the insurer of the insured’s liability, it has a right to
    demand reimbursement from SLRMI by virtue of subrogation.
    The basis of Malayan liability is its insurance contract with Sio Choy. While
    it is true that where the insurance contract provides for indemnity against liability
    to third persons, such third persons can directly sue the insurer, however, the
    direct liability of the insurer under indemnity contracts against third party liability
    does not mean that the insurer can be held solidarity liable with the insured
    and/or the other parties found at fault. The liability of the insurer is based on
    contract that of the insured is based on toil.
    Malayan as insurer of Sio Coy, is liable to Vallejos, but it cannot, as
    incorrectly held by the trial court, be made solidarily liable with the two principal
    tortfeasors, Sio Choy and SLRMI. For if petitioner-insurer were solidarily liable
    with the 2 respondents by reason of the indemnity contract against third party
    liability, under which an insurer can be directly sued by a third party, this will
    result in a violation of the principles underlying solidary obligation and insurance
    contracts.
    In solidary obligation, the creditor may enforce the entire obligation against
    one of the solidary debtors. On the other hand, insurance is defined as 'a contract
    whereby one undertakes for a consideration to indemnify another against loss,
    damage, or liability arising from an unknown contingent event.'
    In this case, the trial court held Malayan solidarily liable with Sio Choy and
    SLRMI for the total amount of Php 29,000 with a qualification that Malayan's
    liability is only up to Php 20,000. In the context of a solidary obligation, Malayan
    may be compelled by Vallejos to pay the entire obligation notwithstanding the
    qualification made by the trial court. This would constitute an error, to allow such
    would be a breach of the concept of a solidary obligation.

    Regarding the subrogation right of Malayan Insurance, the Court said:


    “Subrogation is a normal incident of indemnity insurance. Upon payment of
    the loss, the insurer is entitled to be subrogated pro tanto to any right of
    action which the insured may have against the third person whose
    negligence or wrongful act caused the loss.”
    In the present case, the insurer Malayan Insurance, upon paying the injured
    passenger, shall become the subrogee of the insured; it is subrogated to whatever
    rights the latter has against SLRMI.

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