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    F.F. CRUZ and CO., INC. vs. CA

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    Renz Aimeriza Alonzo
    1) A fire started in the petitioner's furniture shop and spread to the private respondents' adjacent residence, destroying both buildings. The private respondents were paid 35,000 pesos by their insurer. 2) The private respondents sued the petitioner for damages. The Court ruled that under Article 2207, having been paid by their insurer, the private respondents could only recover the amount not covered (deficiency), and the insurer has the right to recover the 35,000 pesos paid from the petitioner. 3) The Court held that upon paying the insured's loss, the insurer is entitled to be subrogated to the insured's right to sue the negligent third party (petitioner) for the amount paid.

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    F.F. CRUZ and CO., INC. vs. CA

    Uploaded by

    Renz Aimeriza Alonzo
    835 views2 pages
    1) A fire started in the petitioner's furniture shop and spread to the private respondents' adjacent residence, destroying both buildings. The private respondents were paid 35,000 pesos by their insurer. 2) The private respondents sued the petitioner for damages. The Court ruled that under Article 2207, having been paid by their insurer, the private respondents could only recover the amount not covered (deficiency), and the insurer has the right to recover the 35,000 pesos paid from the petitioner. 3) The Court held that upon paying the insured's loss, the insurer is entitled to be subrogated to the insured's right to sue the negligent third party (petitioner) for the amount paid.

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    1) A fire started in the petitioner's furniture shop and spread to the private respondents' adjacent residence, destroying both buildings. The private respondents were paid 35,000 pesos by their insurer. 2) The private respondents sued the petitioner for damages. The Court ruled that under Article 2207, having been paid by their insurer, the private respondents could only recover the amount not covered (deficiency), and the insurer has the right to recover the 35,000 pesos paid from the petitioner. 3) The Court held that upon paying the insured's loss, the insurer is entitled to be subrogated to the insured's right to sue the negligent third party (petitioner) for the amount paid.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    835 views2 pages

    F.F. CRUZ and CO., INC. vs. CA

    Uploaded by

    Renz Aimeriza Alonzo
    1) A fire started in the petitioner's furniture shop and spread to the private respondents' adjacent residence, destroying both buildings. The private respondents were paid 35,000 pesos by their insurer. 2) The private respondents sued the petitioner for damages. The Court ruled that under Article 2207, having been paid by their insurer, the private respondents could only recover the amount not covered (deficiency), and the insurer has the right to recover the 35,000 pesos paid from the petitioner. 3) The Court held that upon paying the insured's loss, the insurer is entitled to be subrogated to the insured's right to sue the negligent third party (petitioner) for the amount paid.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    F.F. CRUZ and CO., INC. vs.

     CA

    GR. No. L-52732, August 29, 1988

    Doctrine: Upon payment of the loss incurred by the insured, 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. Under Art. 2207, the real party in interest with
    regard to the indemnity received by the insured is the insurer.

    Recit-Ready Summary: The furniture manufacturing shop of petitioner in Caloocan City was
    situated adjacent to the residence of private respondents. Sometime in August 1971, private
    respondent Gregorio Mable first approached Eric Cruz, petitioner’s plant manager, to request that a
    firewall be constructed between the shop and private respondents’ residence. The request was
    repeated several times but they fell on deaf ears. In the early morning of September 6, 1974, fire
    broke out in petitioner’s shop. The fire spread to private respondents’ house. Both the shop and the
    house were razed to the ground. The cause of the conflagration was never discovered. Subsequently,
    private respondents collected P35,000.00 on the insurance on their house and the contents thereof.
    On January 23, 1975, private respondents filed an action for damages against petitioner. The issue in
    this case is whether or not the respondent may still recover from petitioner notwithstanding the
    indemnity paid by the insurer. The Court ruled that upon payment of the loss incurred by the insured,
    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.

    Facts: The furniture manufacturing shop of petitioner in Caloocan City was situated adjacent to the
    residence of private respondents. Sometime in August 1971, private respondent Gregorio Mable first
    approached Eric Cruz, petitioner’s plant manager, to request that a firewall be constructed between
    the shop and private respondents’ residence. The request was repeated several times but they fell on
    deaf ears. In the early morning of September 6, 1974, fire broke out in petitioner’s shop. Petitioner’s
    employees, who slept in the shop premises, tried to put out the fire, but their efforts proved futile.
    The fire spread to private respondents’ house. Both the shop and the house were razed to the ground.
    The cause of the conflagration was never discovered. Subsequently, private respondents collected
    P35,000.00 on the insurance on their house and the contents thereof. On January 23, 1975, private
    respondents filed an action for damages against petitioner.
    The Court of First Instance held for private respondents. On appeal, the Court of Appeals
    affirmed the decision of the trial court but reduced the award of damages. But Petitioner contends
    that the Court of Appeals erred in not deducting the sum of P35,000.00, which private respondents
    recovered on the insurance on their house, from the award of damages.
    Hence, petitioner filed the instant petition for review.

    Issue: Whether or not the respondents may still recover from petitioner notwithstanding the
    indemnity paid by the insurer.

    Held: Yes. 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 is subrogated to the rights of the insured against the
    wrongdoer or the person who violated the contract. If the amount paid by the insurance company
    does not fully cover the injury or loss, the aggrieved party shall be entitled to recover the deficiency
    from the person causing the loss or injury. 
    The law is clear and needs no interpretation. Having been indemnified by their insurer,
    private respondents are only entitled to recover the deficiency from petitioner. On the other hand, the
    insurer, if it is so minded, may seek reimbursement of the amount it indemnified private respondents
    from petitioner. This is the essence of its right to be subrogated to the rights of the insured, as
    expressly provided in Article 2207. Upon payment of the loss incurred by the insured, 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.
    Under Article 2207, the real party in interest with regard to the indemnity received by the
    insured is the insurer. Whether or not the insurer should exercise the rights of the insured to which it
    had been subrogated lies solely within the former’s sound discretion. Since the insurer is not a party
    to the case, its identity is not of record and no claim is made on its behalf, the private respondent’s
    insurer has to claim his right to reimbursement of the P35,000.00 paid to the insured.

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