[G.R. No. 159213. July 3, 2013.] @u@"e%+e+ a%+ eRte%+e+ t!e "er)o+ #or 10 +ay@, w!)c! )% t!

e+ t!e "er)o+ #or 10 +ay@, w!)c! )% t!)@ ca@e $ea%t t!at t!e

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VECTOR SHIPPING CORPORATION and FRANCISCO SORIANO , pettoners , vs.
AMERICAN HOME ASSURANCE COMPANY and SULPICIO LINES, INC. , responden*s. EN
acLo% @!oul+ /e co$$e%ce+ /y 30 :ece$/er 1991, rat!er t!a% 20 :ece$/er
1991. T!u@, w!e% t!e co$"la)%t a*a)%@t Sul")c)o >)%e@ wa@ @le+ o% 5 'arc! 1992,
BERSAMIN , J. t!e acLo% !a+ "re@cr)/e+.

FACTS Re@"o%+e%t a""eale+ to t!e CA, w!)c! "ro$ul*ate+ )t@ a@@a)le+ +ec)@)o% o% July 22,
Vector wa@ t!e o"erator o# t!e $otor ta%&er '(T Vector, w!)le Sor)a%o wa@ t!e 2003 reYer@)%* t!e RTC. Alt!ou*! t!ere/y a/@olY)%* Sul")c)o >)%e@, -%c. o# a%y l)a/)l)ty to
re*)@tere+ ow%er o# t!e '(T Vector. Re@"o%+e%t )@ a +o$e@Lc )%@ura%ce cor"oraLo%. - re@"o%+e%t, t!e CA !el+ Vector a%+ Sor)a%o fo)%tly a%+ @eYerally l)a/le to re@"o%+e%t #or

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t!e re)$/ur@e$e%t o# t!e a$ou%t o# UQ,655,621.0P "a)+ to CalteR, eR"la)%)%* t!at t!e

Home N% Se"te$/er 30, 19PQ, CalteR e%tere+ )%to a co%tract o# aSre)*!t$e%t w)t! Vector #or
t!e tra%@"ort o# CalteR4@ "etroleu$ car*o t!rou*! t!e '(T Vector. CalteR )%@ure+ t!e
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re@oluLo% o# t!e ca@e )@ "r)$ar)ly a%c!ore+ o% t!e +eter$)%aLo% o# w!at &)%+ o#
relaLo%@!)" eR)@te+ /etwee% CalteR a%+ '(V :o;a Ua< a%+ /etwee% CalteR a%+ '(T
"etroleu$ car*o w)t! re@"o%+e%t #or UQ,655,621.0P u%+er 'ar)%e N"e% Uol)cy No. 367 Vector #or "ur"o@e@ o# a""ly)%* t!e law@ o% "re@cr)"Lo%. T!e relaLo%@!)" t!at eR)@te+
509378. -% t!e eYe%)%* o# :ece$/er 20, 19PQ, t!e '(T Vector a%+ t!e '(V :o;a Ua<, /etwee% CalteR a%+ '(V :o%a Ua< )@ t!at o# a ?ua@)7+el)ct w!)le t!at /etwee% CalteR
t!e la=er a Ye@@el ow%e+ a%+ o"erate+ /y Sul")c)o >)%e@, -%c., coll)+e+ )% t!e o"e% @ea a%+ '(T Vector )@ cul"a co%tractual /a@e+ o% a Co%tract o# ASre)*!t$e%t or a c!arter
%ear :u$al) Uo)%t )% Ta/la@ Stra)t, locate+ /etwee% t!e UroY)%ce@ o# 'ar)%+u?ue a%+ "arty.

Saved Nr)e%tal ')%+oro. T!e coll)@)o% le+ to t!e @)%&)%* o# /ot! Ye@@el@. T!e e%Lre "etroleu$
car*o o# CalteR o% /oar+ t!e '(T Vector "er)@!e+. N% July 12, 19PP, re@"o%+e%t N% t!e ot!er !a%+, t!e cla)$ o# a""ella%t a*a)%@t '(T Vector )@ a%c!ore+ o% a /reac! o#
)%+e$%)@e+ CalteR #or t!e lo@@ o# t!e "etroleu$ car*o )% t!e #ull a$ou%t o# co%tract o# aSre)*!t$e%t. T!e a""ella%t aYerre+ t!at '(T Vector co$$)=e+ @uc! act
UQ,655,621.0P. #or !aY)%* $)@re"re@e%te+ to t!e a""ella%t t!at @a)+ Ye@@el )@ @eawort!y w!e% )% #act )t
)@ %ot. T!e co%tract wa@ eRecute+ /etwee% CalteR a%+ '(T Vector o% Se"te$/er 30,
N% 'arc! 5, 1992, re@"o%+e%t @le+ a co$"la)%t a*a)%@t Vector, Sor)a%o, a%+ Sul")c)o 19PQ #or t!e la=er to tra%@"ort t!ou@a%+@ o# /arrel@ o# +)Sere%t "etroleu$ "ro+uct@.
>)%e@, -%c. to recoYer t!e #ull a$ou%t o# UQ,655,621.0P )t "a)+ to CalteR. N% :ece$/er D%+er Artcle 11@@ o# t!e New C)Y)l Co+e, acLo%@ /a@e+ o% wr)=e% co%tract $u@t /e
10, 199Q, t!e RTC )@@ue+ a re@oluLo% +)@$)@@)%* t!e ca@e o% t!e #ollow)%* *rou%+@a /rou*!t w)t!)% 10 year@ #ro$ t!e L$e t!e r)*!t o# acLo% accrue+. A "a@@e%*er o# a @!)",
! T!)@ acLo% )@ u"o% a ?ua@)7+el)ct a%+ a@ @uc! $u@t / e co$$e%ce+ w)t!)% #our year@ or !)@ !e)r@, ca% /r)%* a% acLo% /a@e+ o% cul"a co%tractual w)t!)% a "er)o+ o# 10 year@
Bestsellers #ro$ t!e +ay t!ey $ay /e /rou*!t. BFro$ t!e +ay [t!e acLo%] $ay /e /rou*!tB
$ea%@ #ro$ t!e +ay t!e ?ua@)7+el)ct occurre+. [Ca"u%o Y. Ue"@) Cola]
/ecau@e t!e Lc&et )@@ue+ #or t!e tra%@"ortaLo% )@ /y )t@el# a co$"lete wr)=e% co%tract
V)ewe+ w)t! re#ere%ce to t!e @tatute o# l)$)taLo%@, a% acLo% a*a)%@t a carr)er, w!et!er
! T!e tort co$"la)%e+ o# )% t!)@ ca@e occurre+ o% 20 :ece$/er 19PQ. T!e acLo% o# *oo+@ or o# "a@@e%*er@, #or )%fury re@ulL%* #ro$ a /reac! o# co%tract #or @a#e carr)a*e
ar)@)%* t!ere#ro$ woul+ u%+er t!e law "re@cr)/e, u%le@@ )%terru"te+, o% 20 )@ o%e o% co%tract, a%+ %ot )% tort, a%+ )@ t!ere#ore, )% t!e a/@e%ce o# a @"ec)@c @tatute
:ece$/er 1991. relaL%* to @uc! acLo%@ *oYer%e+ /y t!e @tatute @R)%* t!e "er)o+ w)t!)% w!)c! acLo%@
! c!e% t!e ca@e wa@ @le+ a*a)%@t +e#e%+a%t@ Vector S!)"")%* a%+ Fra%c)@co Sor)a%o #or /reac! o# co%tract $u@t /e /rou*!t.

Books !
o% 5 'arc! 1992, t!e acLo% %ot !aY)%* /ee% )%terru"te+, !a+ alrea+y "re@cr)/e+
D%+er t!e @a$e @)tuaLo%, t!e cro@@7cla)$ o# Sul")c)o >)%e@ a*a)%@t Vector S!)"")%* Co%@)+er)%* t!e co%clu@)o% t!at t!e "re@cr)"LYe "er)o+@ #or @l)%* acLo% a*a)%@t '(V
a%+ Fra%c)@co Sor)a%o @le+ o% 25 Ju%e 1992 !a+ l)&ew)@e "re@cr)/e+. :o;a Ua< /a@e+ o% quasi delict a%+ '(T Vector /a@e+ o% breach of contract !aYe %ot
! T!e le=er o# +e$a%+ u"o% +e#e%+a%t Sul")c)o >)%e@ alle*e+ly o% 8 NoYe$/er 1991 yet eR")re+, t!e Court +ec)+e+ aIr$aLYely o% t!e a""eal o% )t@ $er)t. Artcle !!"# o#
+)+ %ot )%terru"t t!e toll)%* o# t!e "re@cr)"LYe "er)o+ @)%ce t!ere )@ %o eY)+e%ce t!e C)Y)l Co+e o% @u/ro*aLo% )@ eR"l)c)t t!at )# t!e "la)%LS4@ "ro"erty !a@ /ee% )%@ure+,
t!at )t wa@ actually rece)Ye+ /y t!e a++re@@ee. D%+er @uc! c)rcu$@ta%ce@, t!e a%+ !e !a@ rece)Ye+ )%+e$%)ty #ro$ t!e )%@ura%ce co$"a%y #or t!e )%fury or lo@@ ar)@)%*

Audiobooks !
acLo% a*a)%@t Sul")c)o >)%e@ !a+ l)&ew)@e "re@cr)/e+.
EYe% a@@u$)%* t!at @uc! wr)=e% eRtra7fu+)c)al +e$a%+ wa@ rece)Ye+ a%+ t!e
out o# t!e wro%* or /reac! o# co%tract co$"la)%e+ o#, t!e )%@ura%ce co$"a%y @!oul+ /e
@u/ro*ate+ to t!e r)*!t@ o# t!e )%@ure+ a*a)%@t t!e wro%*+oer or t!e "er@o% w!o !a@
"re@cr)"LYe "er)o+ )%terru"te+ )% accor+a%ce w)t! Art. 1155, C)Y)l Co+e, )t wa@ o%ly Y)olate+ t!e co%tract. D%+ou/te+ly, t!e !ere)% a""ella%t !a@ t!e r)*!t@ o# a @u/ro*ee to
#or t!e 107+ay "er)o+ w)t!)% w!)c! Sul")c)o >)%e@ wa@ re?u)re+ to @e=le )t@ recoYer #ro$ '(T Vector w!at )t !a@ "a)+ /y way o# )%+e$%)ty to CalteR. c!ere#ore, t!e
o/l)*aLo%. Ager t!at "er)o+ la"@e+, t!e "re@cr)"LYe "er)o+ @tarte+ a*a)%. A %ew 67 +ec)@)o% +ate+ :ece$/er 10, 199Q o# t!e RTC jra%c! 165 )@ !ere/y REVERSE:.
year "er)o+ to @le acLo% wa@ %ot create+ /y t!e eRtra7 fu+)c)al +e$a%+H )t $erely Accor+)%*ly, t!e +e#e%+a%t7a""ellee@ Vector S!)"")%* Cor"oraLo% a%+ Fra%c)@co Sor)a%o

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are !el+ fo)%tly a%+ @eYerally l)a/le to t!e "la)%LS7a""ella%t A$er)ca% Ko$e A@@ura%ce "etroleu$ car*o. A@ t!e Court !a@ a"tly "ut )t )% Pan Malayan Insurance Corporaton v.
Co$"a%y #or t!e "ay$e%t o# UQ,655,621.0P a@ a%+ /y way o# actual damages . SN Cour* of Appeals, supra , re@"o%+e%t4@ r)*!t o# @u/ro*aLo% "ur@ua%t to ArLcle 220Q, wa@
NR:ERE:. B%ot +e"e%+e%t u"o%, %or +[)+] )t *row out o#, a%y "r)Y)ty o# co%tract or u"o% wr)=e%
a@@)*%$e%t o# cla)$ [/ut] accrue[+] @)$"ly u"o% "ay$e%t o# t!e )%@ura%ce cla)$ /y t!e
Re@"o%+e%t @ou*!t t!e "arLal reco%@)+eraLo% o# t!e +ec)@)o% o# t!e CA, co%te%+)%* )%@urer.B
t!at Sul")c)o >)%e@, -%c. @!oul+ al@o /e !el+ fo)%tly l)a/le w)t! Vector a%+ Sor)a%o #or t!e
actual +a$a*e@ awar+e+. N% t!e)r "art, !oweYer, Vector a%+ Sor)a%o )$$e+)ately Co%@)+er)%* t!at t!e cau@e o# acLo% accrue+ a@ o# t!e L$e re@"o%+e%t actually
a""eale+ to t!e Court o% Se"te$/er 12, 2003. T!u@, o% Ncto/er 1, 2003, t!e CA !el+ )% )%+e$%)@e+ CalteR )% t!e a$ou%t o# UQ,655,621.0P o% July 12, 19PP, 13 t!e acLo% wa@
a/eya%ce )t@ acLo% o% re@"o%+e%t4@ "arLal $oLo% #or reco%@)+eraLo% "ur@ua%t to )t@ %ot yet /arre+ /y t!e L$e o# t!e @l)%* o# )t@ co$"la)%t o% 'arc! 5, 1992, !" w!)c! wa@
)%ter%al rule@ u%Ll t!e Court !a@ re@olYe+ t!)@ a""eal. well w)t!)% t!e 107year "er)o+ "re@cr)/e+ /y ArLcle 1166 o# t!e Civil Code.

-SSDE -t )@ u%+e%)a/le t!at re@"o%+e%t "re"o%+era%tly e@ta/l)@!e+ )t@ r)*!t o# @u/ro*aLo%. -t@
c!et!er t!)@ acLo% o# re@"o%+e%t wa@ alrea+y /arre+ /y "re@cr)"Lo% #or /r)%*)%* )t ER!)/)t C wa@ 'ar)%e N"e% Uol)cy No. 367509378 t!at )t !a+ )@@ue+ to CalteR to )%@ure
o%ly o% 'arc! 5, 1992. A relate+ )@@ue co%cer%@ t!e "ro"er +eter$)%aLo% o# t!e %ature t!e "etroleu$ car*o a*a)%@t $ar)%e "er)l. T!e #or$al wr)=e% cla)$ o# CalteR #or t!e
o# t!e cau@e o# acLo% a@ ar)@)%* e)t!er #ro$ a ?ua@)7+el)ct or a /reac! o# co%tract. "ay$e%t o# t!e )%@ura%ce coYera*e o# UQ,655,621.0P cour@e+ t!rou*! re@"o%+e%t4@

Sor)a%o #or t!e actual +a$a*e@ cla)$e+. You're Reading a Preview

c!et!er or %ot Sul")c)o >)%e@, -%c. @!oul+ al@o /e !el+ fo)%tly l)a/le w)t! Vector a%+ a+fu@ter. T!e $ar)%e +ocu$e%t@ relaL%* to t!e "er)@!e+ car*o o% /oar+ t!e '(V Vector
were "roce@@e+ #or t!e "ur"o@e o# Yer)#y)%* t!e )%@ura%ce cla)$ o# CalteR. T!e
@u/ro*aLo% rece)"t +ate+ July 12, 19PP @!o w@ t!at re@"o%+e%t "a)+ CalteR
are !el+ fo)%tly a%+ @eYerally l)a/le to t!e "la)%LS7a""ella%t A$er)ca% Ko$e A@@ura%ce "etroleu$ car*o. A@ t!e Court !a@ a"tly "ut )t )% Pan Malayan Insurance Corporaton v.
RD>-NG UQ,655,621.00 a@ t!e #ull @e=le$e%t o# CalteR4@ cla)$ u%+er 'ar)%e N"e% Uol)cy No. 367
Co$"a%y #or t!e "ay$e%t o# UQ,655,621.0P a@ a%+ /y way o# actual damages . SN Cour* of Appeals, supra , re@"o%+e%t4@ r)*!t o# @u/ro*aLo% "ur@ua%t to ArLcle 220Q, wa@
T!e "eLLo% lac&@ $er)t.
NR:ERE:. Unlock full access with a free trial.
T!e Court co%cur@ w)t! t!e CA4@ rul)%* t!at re@"o%+e%t4@ acLo% +)+ %ot yet "re@cr)/e.
509378. All t!e@e were u%?ue@Lo%a/ly +uly "re@e%te+, $ar&e+, a%+ a+$)=e+ +ur)%* t!e
B%ot +e"e%+e%t u"o%, %or +[)+] )t *row out o#, a%y "r)Y)ty o# co%tract or u"o% wr)=e%
tr)al. Co%@)@te%t w)t! t!e "erL%e%t law a%+ fur)@"ru+e%ce, t!ere#ore, t!e #or$al wr)=e%
a@@)*%$e%t o# cla)$ [/ut] accrue[+] @)$"ly u"o% "ay$e%t o# t!e )%@ura%ce cla)$ /y t!e
T!e le*al "roY)@)o% *oYer%)%* t!)@ ca@e wa@ %ot ArLcle 1168 o# t!e Civil Code, 1$ /ut cla)$ wa@ alrea+y e%ou*! /y )t@el# to "roYe t!e "ay$e%t o# UQ,655,621.00 a@ t!e #ull
Re@"o%+e%t @ou*!t t!e "arLal reco%@)+eraLo% o# t!e +ec)@)o% o# t!e CA, co%te%+)%* )%@urer.B
ArLcle 1166 o# t!e Civil Code, w!)c! @tate@a LT!e #ollow)%* acLo%@ $u@t /e /rou*!t @e=le$e%t o# CalteR4@ cla)$. T!e "ay$e%t $a+e to CalteR a@ t!e )%@ure+ /e)%* t!ere/y
t!at Sul")c)o >)%e@, -%c. @!oul+ al@o /e !el+ fo)%tly l)a/le w)t! Vector a%+ Sor)a%o #or t!e
w)t!)% te% year@ #ro$ t!e L$e t!e cau@e o# acLo% accrue@a
actual +a$a*e@ awar+e+. N% t!e)r "art, !oweYer, Vector a%+ Sor)a%o )$$e+)ately
M1n D"o% a wr)=e% co%tractH
This document is...
+uly +ocu$e%te+, re@"o%+e%t /eca$e @u/ro*ate+ a@ a $a=er o# cour@e "ur@ua%t to
Co%@)+er)%* t!at t!e cau@e o# acLo% accrue+ a@ o# t!e L$e re@"o%+e%t actually
ArLcle 220Q.

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a""eale+ to t!e Court o% Se"te$/er 12, 2003. T!u@, o% Ncto/er 1, 2003, t!e CA !el+ )% )%+e$%)@e+ CalteR )% t!e a$ou%t o# UQ,655,621.0P o% July 12, 19PP, 13 t!e acLo% wa@
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a/eya%ce )t@ acLo% o% re@"o%+e%t4@ "arLal $oLo% #or reco%@)+eraLo% "ur@ua%t to )t@
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)%ter%al rule@ u%Ll t!e Court !a@ re@olYe+ t!)@ a""eal. Useful Not useful
%ot yet /arre+ /y t!e L$e o# t!e @l)%* o# )t@ co$"la)%t o% 'arc! 5, 1992, !" w!)c! wa@
cKEREFNRE, t!e Court :EN-ES t!e "eLLo% #or reY)ew o% cerLorar)H
well w)t!)% t!e 107year "er)o+ "re@cr)/e+ /y ArLcle 1166 o# t!e Civil Code.
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+ec)@)o% "ro$ul*ate+ o% July 22, 2003H a%+ NR:ERS "eLLo%er@ to "ay t!e co@t@ o# @u)t.
T!e Court @%+@ a%+ !ol+@ t!at t!at t!e "re@e%t acLo% wa@ %ot u"o% a wr)=e% co%tract,
-SSDE ½
/ut u"o% a% o/l)*aLo% create+ /y law. Ke%ce, )t ca$e u%+er ArLcle 1166 M2n. T!)@ )@
-t )@ u%+e%)a/le t!at re@"o%+e%t "re"o%+era%tly e@ta/l)@!e+ )t@ r)*!t o# @u/ro*aLo%. -t@
SO OR4ERE4.
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c!et!er t!)@ acLo% o# re@"o%+e%t wa@ alrea+y /arre+ /y "re@cr)"Lo% #or /r)%*)%* )t
/ecau@e t!e @u/ro*aLo% o# re@"o%+e%t to t!e r)*!t@ o# CalteR a@ t!e )%@ure+ wa@ /y
o%ly o% 'arc! 5, 1992. A relate+ )@@ue co%cer%@ t!e "ro"er +eter$)%aLo% o# t!e %ature
ER!)/)t C wa@ 'ar)%e N"e% Uol)cy No. 367509378 t!at )t !a+ )@@ue+ to CalteR to )%@ure
t!e "etroleu$ car*o a*a)%@t $ar)%e "er)l. T!e #or$al wr)=e% cla)$ o# CalteR #or t!e
Y)rtue o# t!e eR"re@@ "roY)@)o% o# law e$/o+)e+ )% ArLcle 220Q, to w)ta L-# t!e "la)%LS4@
o# t!e cau@e o# acLo% a@ ar)@)%* e)t!er #ro$ a ?ua@)7+el)ct or a /reac! o# co%tract. "ay$e%t o# t!e )%@ura%ce coYera*e o# UQ,655,621.0P cour@e+ t!rou*! re@"o%+e%t4@
"ro"erty !a@ /ee% )%@ure+, a%+ !e !a@ rece)Ye+ )%+e$%)ty #ro$ t!e )%@ura%ce co$"a%y
c!et!er or %ot Sul")c)o >)%e@, -%c. @!oul+ al@o /e !el+ fo)%tly l)a/le w)t! Vector a%+ a+fu@ter. T!e $ar)%e +ocu$e%t@ relaL%* to t!e "er)@!e+ car*o o% /oar+ t!e '(V Vector
#or t!e )%fury or lo@@ ar)@)%* out o# t!e wro%* or /reac! o# co%tract co$"la)%e+ o#, %&e
Sor)a%o #or t!e actual +a$a*e@ cla)$e+. were "roce@@e+ #or t!e "ur"o@e o# Yer)#y)%* t!e )%@ura%ce cla)$ o# CalteR. T!e
'n()rance c*+Lan- (&all Ne ()Nr*/a%ed %* %&e r'/&%( *0 %&e 'n()red a/a'n(% %&e
@u/ro*aLo% rece)"t +ate+ July 12, 19PP @!ow@ t!at re@"o%+e%t "a)+ CalteR
Qr*n/d*er *r %&e Ler(*n Q&* &a( 2'*la%ed %&e c*n%rac%. -# t!e a$ou%t "a)+ /y t!e
RD>-NG UQ,655,621.00 a@ t!e #ull @e=le$e%t o# CalteR4@ cla)$ u%+er 'ar)%e N"e% Uol)cy No. 367
)%@ura%ce co$"a%y +oe@ %ot #ully coYer t!e )%fury or lo@@, t!e a**r)eYe+ "arty @!all /e
T!e "eLLo% lac&@ $er)t. 509378. All t!e@e were u%?ue@Lo%a/ly +uly "re@e%te+, $ar&e+, a%+ a+$)=e+ +ur)%* t!e
e%Ltle+ to recoYer t!e +e@c)e%cy #ro$ t!e "er@o% cau@)%* t!e lo@@ or )%fury.O
T!e Court co%cur@ w)t! t!e CA4@ rul)%* t!at re@"o%+e%t4@ acLo% +)+ %ot yet "re@cr)/e. tr)al. Co%@)@te%t w)t! t!e "erL%e%t law a%+ fur)@"ru+e%ce, t!ere#ore, t!e #or$al wr)=e%
T!e le*al "roY)@)o% *oYer%)%* t!)@ ca@e wa@ %ot ArLcle 1168 o# t!e Civil Code, 1$ /ut cla)$ wa@ alrea+y e%ou*! /y )t@el# to "roYe t!e "ay$e%t o# UQ,655,621.00 a@ t!e #ull
Ver)ly, t!e co%tract o# aSre)*!t$e%t t!at CalteR a%+ Vector e%tere+ )%to +)+ %ot *)Ye r)@e