Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

147839 June 8, 2006

GAISANO CAGAYAN, INC. Petitioner, vs. INSURANCE COMPANY O NORT! AMERICA, Respondent.

ACTS" Intercapitol Mar etin! "orporation #IM"$ is the %a er of &ran!ler 'lue (eans. )evi Strauss #Phils.$ Inc. #)SPI$ is the local distributor of products bearin! trade%ar s o*ned b+ )evi Strauss , "o. IM" and )SPI separatel+ obtained fro% respondent fire insurance policies *ith boo debt endorse%ents. The insurance policies provide for covera!e on -boo debts in connection *ith read+.%ade clothin! %aterials *hich have been sold or delivered to various custo%ers and dealers of the Insured an+*here in the Philippines.The policies defined boo debts as the -unpaid account still appearin! in the 'oo of /ccount of the Insured 01 da+s after the ti%e of the loss covered under this Polic+.The policies also provide for the follo*in! conditions2 3. &arranted that the "o%pan+ shall not be liable for an+ unpaid account in respect of the %erchandise sold and delivered b+ the Insured *hich are outstandin! at the date of loss for a period in e4cess of si4 #5$ %onths fro% the date of the coverin! invoice or actual deliver+ of the %erchandise *hichever shall first occur. 6. &arranted that the Insured shall sub%it to the "o%pan+ *ithin t*elve #36$ da+s after the close of ever+ calendar %onth all a%ount sho*n in their boo s of accounts as unpaid and thus beco%e receivable ite% fro% their custo%ers and dealers. Petitioner is a custo%er and dealer of the products of IM" and )SPI. On Februar+ 61, 3773, the 8aisano Superstore "o%ple4 in "a!a+an de Oro "it+, o*ned b+ petitioner, *as consu%ed b+ fire. Included in the ite%s lost or destro+ed in the fire *ere stoc s of read+.%ade clothin! %aterials sold and delivered b+ IM" and )SPI. Februar+ 0, 37762 Insurance "o%pan+ of North /%erica filed a co%plaint for da%a!es a!ainst 8aisano.

In#u$%n&e Co'(%n) o* No$+, A'e$-&%.# C/%-'" Na!file an! IM" and )SPI saa%in n! clai%s under their respective fire insurance policies *ith boo debt endorse%ents. /s of Februar+ 61, 3773, the unpaid accounts of petitioner on the sale and deliver+ of read+.%ade clothin! %aterials *ith IM" *as P6,337,691.99 *hile *ith )SPI it *as P1:1,53:.99. 'ina+aran na%in! +un! clai%s n! IM" and )SPI a+a subro!ated a%i to their ri!hts a!ainst petitioner. /nta!al na na%in! naninin!il pero na!bibin!i bin!ihan sila; Pa!baba+aran nila ito;

T,e Con+en+-on o* G%-#%no C%0%)%n, In&" Pucha; &ala a%in! asalanan; &e should not be held liable because the !oods *ere destro+ed b+ a fortuitous event < force %a=eure. Nasunu!an a+a a%i, helerrrrr. /lso, an! respondent>s ri!ht of subro!ation a+ *alan! basehan dahil *alan! breach of contract %ula sa a%in! a%po since the loss a+ dahil sa suno! *hich *e could not prevent or foresee. ?indi a%i %an!huhula; Further%ore, IM" and )SPI never co%%unicated to us that the+ insured their properties@ *e never consented to pa+in! the clai% of the insured.

RT"2 IM" and )SPI retained o*nership of the delivered !oods until full+ paid, so it %ust bear the loss #res perit do%ino$

"/2 Reversed . sales invoices is an e4ception under /rticle 3190 #3$ of the "ivil "ode to res perit do%ino

ISSAB2 &<N Insurance "o%pan+ of North /%erica can clai% a!ainst 8aisano "a!a+an for the insured debts. ?B)D2 CBS. petition is partl+ 8R/NTBD Insurance polic+ is clear that the sub=ect of the insurance is the boo debts and NOT !oods sold and delivered to the custo%ers and dealers of the insured ART. 1104. Anless other*ise a!reed, the !oods re%ain at the seller>s ris until the o*nership therein is transferred to the bu+er, but *hen the o*nership therein is transferred to the bu+er, the !oods are at the bu+er>s ris *hether actual deliver+ has been %ade or not, e4cept that2 #3$ &here deliver+ of the !oods has been %ade to the bu+er or to a bailee for the bu+er, in pursuance of the contract and the o*nership in the !oods has been retained b+ the seller %erel+ to secure perfor%ance b+ the bu+er of his obli!ations under the contract, the !oods are at the bu+er>s ris fro% the ti%e of such deliver+

IM" and )SPI did not lose co%plete interest over the !oods. The+ have an insurable interest until full pa+%ent of the value of the delivered !oods. Anli e the civil la* concept of res perit do%ino, *here o*nership is the basis for consideration of *ho bears the ris of loss, in propert+ insurance, one>s interest is not deter%ined b+ concept of title, but *hether insured has substantial econo%ic interest in the propert+ Se&+-on 13 o* ou$ In#u$%n&e Co2e defines insurable interest as -ever+ interest in propert+, *hether real or personal, or an+ relation thereto, or liabilit+ in respect thereof, of such nature that a conte%plated peril %i!ht directl+ da%nif+ the insured.Parentheticall+, under Se&+-on 14 o* +,e #%'e Co2e, an insurable interest in propert+ %a+ consist in2 #a$ an e4istin! interest@ #b$ an inchoate interest founded on e4istin! interest@ or #c$ an e4pectanc+, coupled *ith an e4istin! interest in that out of *hich the e4pectanc+ arises. /n+one has an insurable interest in propert+ *ho derives a benefit fro% its e4istence or *ould suffer loss fro% its destruction. It is sufficient that the insured is so situated *ith reference to the propert+ that he *ould be liable to loss should it be in=ured or destro+ed b+ the peril a!ainst *hich it is insured /n insurable interest in propert+ does not necessaril+ i%pl+ a propert+ interest in, or a lien upon, or possession of, the sub=ect %atter of the insurance, and neither the title nor a beneficial interest is reDuisite to the e4istence of such an interest Insurance in this case is not for loss of !oods b+ fire but for petitioner>s accounts *ith IM" and )SPI that re%ained unpaid 01 da+s after the fire . obli!ation is pecuniar+ in nature Obli!or should be held e4e%pt fro% liabilit+ *hen the loss occurs thru a fortuitous event onl+ holds true *hen the obli!ation consists in the deliver+ of a deter%inate thin! and there is no stipulation holdin! hi% liable even in case of fortuitous event A$+-&/e 1263 o* +,e C-3-/ Co2e2 in an obli!ation to deliver a !eneric thin!, the loss or destruction of an+thin! of the sa%e ind does not e4tin!uish the obli!ation #8enus nunDuan perit$ The subro!ation receipt, b+ itself, is sufficient to establish not onl+ the relationship of respondent as insurer and IM" as the insured, but also the a%ount paid to settle the insurance clai% A$+. 2207. If the plaintiff>s propert+ has been insured, and he has received inde%nit+ fro% the insurance co%pan+ for the in=ur+ or loss arisin! out of the *ron! or breach of contract co%plained of, the insurance co%pan+ shall be subro!ated to the ri!hts of the insured a!ainst the *ron!doer or the person *ho has violated the contract.

Partl+ !ranted lan! +un! petition asi as to )SPI, no subro!ation receipt *as offered in evidence. Failure to substantiate the clai% of subro!ation is fatal to petitioner>s case for recover+ of the a%ount of P1:1,53:. ?ence, the order to pa+ the a%ount of P1:1,53:.99 to respondent is 4E5ETE4 for lac of factual basis.