RepublicofthePhilippines

SupremeCourt
Manila

THIRDDIVISION

G.R.No.174116
EASTERNSHIPPINGLINES,INC.,
Petitioner,

versus

Present:
YNARESSANTIAGO,J.,
Chairperson,
CHICONAZARIO,
VELASCO,JR.,
NACHURA,and
PERALTA,JJ.

PRUDENTIAL GUARANTEE AND

ASSURANCE,INC.,
Promulgated:
Respondent.

September11,2009
xx

DECISION

PERALTA,J.:

[1]

BeforethisCourtisaPetitionforReviewonCertiorari

underRule45oftheRulesofCourt,seekingtosetasidetheApril26,2006Decision

[2]

and

[3]
oftheCourtofAppeals(CA)inCAG.R.CVNo.68165.

August15,2006Resolution

Thefactsofthecase:

OnNovember8,1995,fiftysixcasesofcompletelyknockdownautopartsofNissanmotorvehicle(cargoes)wereloadedonboardM/VApolloTujuh
(carrier)atNagoya,Japan,tobeshippedtoManila.TheshipmentwasconsignedtoNissanMotorPhilippines,Inc.(Nissan)andwascoveredbyBillofLading
[4]
ThecarrierwasownedandoperatedbypetitionerEasternShippingLines,Inc.

No.NMA1.

On November 16, 1995, the carrier arrived at the port of Manila. On November 22, 1995, the shipment was then discharged from the vessel onto the
custodyofthearrastreoperator,AsianTerminals,Inc.(ATI),completeandingoodcondition,exceptforfourcases.

[5]

OnNovember24to28,1995,theshipmentwaswithdrawnbySeafrontCustomsandBrokeragefromthepieranddeliveredtothewarehouseofNissanin
[6]

QuezonCity.

A survey of the shipment was then conducted by TanGaute Adjustment Company, Inc. (surveyor) at Nissans warehouse. On January 16, 1996, the
[7]
surveyorsubmitteditsreport withafindingthattherewereshort(missing)itemsinCasesNos.10/A26/T3Kand10/A26/7Kandbroken/scratchedand
brokenitemsinCaseNo.10/A26/70Kandthat(i)n(its)opinion,theshortageanddamagesustainedbytheshipmentwereduetopilferageandimproper
handling,respectivelywhileinthecustodyofthevesseland/orArrastreContractors.

[8]

[9]
Asaresult,NissandemandedthesumofP1,047,298.34 representingthecostofthedamagessustainedbytheshipmentfrompetitioner,theownerofthe
vessel,andATI,thearrastreoperator.However,thedemandswerenotheeded.

[10]

OnAugust21,1996,asinsureroftheshipmentagainstallrisksperMarineOpenPolicyNo.86168andMarineCargoRiskNoteNo.3921/95,respondent
PrudentialGuaranteeandAssuranceInc.paidNissanthesumofP1,047,298.34.

On October 1, 1996, respondent sued petitioner and ATI for reimbursement of the amount it paid to Nissan before the Regional Trial Court (RTC) of
MakatiCity,Branch148,docketedasCivilCaseNo.961665,entitledPrudentialGuaranteeandAssurance,Inc.v.EasternShippingLines,Inc.Respondent
claimedthatitwassubrogatedtotherightsofNissanbyvirtueofsaidpayment.

[11]

[12]
OnJune21,1999,theRTCrenderedaDecision,
thedispositiveportionofwhichreads:

WHEREFORE,premisesconsidered,judgmentisherebyrenderedinfavoroftheplaintiffandagainstthedefendantsEasternShippingLines,Inc.andATI,andsaid
defendantsareherebyorderedtopayjointlyandsolidarilyplaintiffthefollowing:

1)TheclaimofP1,047,298.34withlegalinterestthereonof6%perannumfromthedateofthefilingofthiscomplaintuntilthesameisfullypaid
2)[Twentyfive(25%)]percentoftheprincipalclaim,asandforattorneysfees
3)Pluscostsofsuit.

Boththecounterclaimsandcrossclaimsarewithoutlegalbasis.Thecounterclaimsandcrossclaimsarebasedontheassumptionthattheotherdefendantistheone
solelyliable.However,inasmuchasthesolidaryliabilityofthedefendantshavebeenestablished,thecounterclaimsandcrossclaimsmustbedenied.

EqualcostsagainstEasternShippingLines,Inc.andAsianTerminals,Inc.

[13]
SOORDERED.

BothpetitionerandATIappealedtotheCA.


OnApril26,2006,theCArenderedaDecisionthedispositiveportionofwhichreads:

WHEREFORE,theappealeddecisionisAFFIRMEDwithMODIFICATIONS,inthat(i)defendantappellantEasternShippingLines,Inc.isorderedtopayappellee
(a)theamountofP904,293.75plusinterestthereonattherateof6%perannumfromthefilingofthecomplaintuptothefinalityofthisjudgment,whentheinterestshall
become12%perannumuntilfullypaid,and(b)thecostsofsuit(ii)theawardofattorneysfeesisDELETEDand(iii)thecomplaintagainstdefendantappellantAsian
Terminals,Inc.isDISMISSED.

[14]
SOORDERED.

The CA exonerated ATI and ruled that petitioner was solely responsible for the damages caused to the cargoes. Moreover, the CA relying on Delsan
[15]
TransportLines,Inc.vs.CourtofAppeals,
ruledthattherightofsubrogationaccruesuponpaymentbytheinsurancecompanyoftheinsuranceclaimand
thatthepresentationoftheinsurancepolicyisnotindispensablebeforetheappelleemayrecoverintheexerciseofitssubrogatoryright.

[16]

Petitionerthenfiledamotionforreconsideration,whichwas,however,deniedbytheCAinaResolutiondatedAugust15,2006.

Hence,hereinpetition,withpetitionerraisingthefollowingassignmentoferrorstowit:

I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE LOWER COURT FINDING HEREIN
PETITIONERLIABLEDESPITETHEFACTTHATRESPONDENTFAILEDTOSUBMITANYINSURANCEPOLICY.

II.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT APPLYING THE US$500.00/PACKAGE/CASE PACKAGE LIMITATION OF
[17]
LIABILITYINACCORDANCEWITHTHECARRIAGEOFGOODSBYSEAACT.

Thepetitionismeritorious.

TheruleinourjurisdictionisthatonlyquestionsoflawmaybeentertainedbythisCourtinapetitionforreviewoncertiorari.Thisrule,however,isnot
ironcladandadmitsofcertainexceptions,oneofwhichiswhentheCAmanifestlyoverlookedcertainrelevantandundisputedfactsthat,ifproperlyconsidered,
[18]
Inthecaseatbar,therecordsofthecasecontainevidencewhichjustifytheapplicationoftheexception.

wouldjustifyadifferentconclusion.

Anentthefirsterror,petitionerarguesthatrespondentwasnotproperlysubrogatedbecauseofthenonpresentationofthemarineinsurancepolicy.Inthe
caseatbar,inordertoproveitsclaim,respondentpresentedamarinecargorisknoteandasubrogationreceipt.Thus,thequestiontoberesolvediswhetherthe
twodocuments,withouttheMarineInsurancePolicy,aresufficienttoproverespondentsrightofsubrogation.

Beforeanythingelse,itmustbeemphasizedthatamarinerisknoteisnotaninsurancepolicy.Itisonlyanacknowledgmentordeclarationoftheinsurer
confirmingthespecificshipmentcoveredbyitsmarineopenpolicy,theevaluationofthecargoandthechargeablepremium.

[19]

In International Container

[20]
thenatureofamarinecargorisknotewasexplained,thus:

TerminalServices,Inc.v.FGUInsuranceCorporation(International),

xxxItisthemarineopenpolicywhichisthemaininsurancecontract.Inotherwords,themarineopenpolicyistheblanketinsurancetobeundertakenbyFGUonall
goods to be shipped by RAGC during the existence of the contract, while the marine risk note specifies the particular goods/shipment insured by FGU on that specific
[21]
transaction,includingthesuminsured,theshipmentparticularsaswellasthepremiumpaidforsuchshipment.xxx.

[22]

Forclarity,thepertinentportionsoftheMarineCargoRiskNote,

relieduponbyrespondent,arehereunderreproduced,towit:

RNNO39821/95
Date:Nov.16,1995

NISSANMOTORPHILS.,INC.
xxx

Gentlemen:

WehavethisdaynotedaRiskinyourfavorsubjecttoallclausesandconditionoftheCompanysprintedformofMarineOpenPolicyNo.86168


ForPHILIPINEPESOSFOURTEENMILLIONONEHUNDREDSEVENTYTHREETHOUSANDFORTYTWO&91/100ONLY(P14,173,042.91)xxx

CARGO:56CASESNISSANMOTORVEHICLECKD(GC22)

CONDITIONS:INSTITUTECARGOCLAUSESA
OTHERTERMSANDCONDITIONSPER
MOP86168

From:NAGOYA
To:MANILA,PHILS.
ETD:NOV.8,1995ETA:NOV.17,1995
CARRIER:APOLLOTUJUH
B/LNO:NMA1
BANK:BANKOFTHEPHILLIPINEISLANDS
L/CNO:026010051971
Shipper/Consignee:MARUBENICORPORATION

It is undisputed that the cargoes were already on board the carrier as early as November 8, 1995 and that the same arrived at the port of Manila on
November16,1995.Itis,however,veryapparentthattheMarineCargoRiskNotewasissuedonlyonNovember16,1995.Thesame,therefore,shouldhave
raisedaredflag,asitwouldbeimpossibletoknowwhethersaidgoodswereactuallyinsuredwhilethesamewereintransitfromJapantoManila.Onthisscore,
[23]
thisCourtisguidedbyMalayanInsuranceCo.,Inc.v.RegisBrokerageCorp.,
wherethisCourtruled:

Thus,wecanonlyconsidertheMarineRiskNoteindeterminingwhetherthereexistedacontractofinsurancebetweenABBKoppelandMalayanatthetimeofthe
lossofthemotors.However,theverytermsoftheMarineRiskNoteitselfarequitedamning.Itisdated21March1995,oraftertheoccurrenceoftheloss, and
specificallystatesthatMalayanha[d]thisdaynotedtheabovementionedriskinyourfavorandherebyguarantee[s]thatthisdocumenthasalltheforceandeffectofthe
[24]
termsandconditionsintheCorporationsprintedformofthestandardMarineCargoPolicyandtheCompanysMarineOpenPolicy.

Likewise,thedateoftheissuanceoftheMarineRiskNotealsocaughttheattentionofpetitioner.InpetitionersComment/Opposition
offerofevidencebeforetheRTC,petitionermadethefollowingmanifestations,towit:

[25]

totheformal


ExhibitB,MarineCargoRiskNoteNo.39821datedNovember16,1995isbeingobjectedtoforbeingirrelevantandimmaterialasitwasexecutedon
November16,1995.ThecargoesarrivedinManilaonNovember16,1995.Thismeansthatthecargoesarenotspecificallycoveredbyanyparticularinsuranceat
thetimeoftransit.TheallegedMarineOpenPolicywasnotpresented.MarineOpenPolicymaybesubjecttoInstituteCargoClauseswhichmayrequirearbitrationpriorto
[26]
thefilingofanactionincourt.

Inaddition,petitioneralsocontendedthattheMarineCargoRiskNotereferredtoInstituteCargoClausesAandothertermsandconditionsperMarine
OpenPolicy86168.

Basedontheforgoing,itisalreadyevidentwhyhereinpetitionismeritorious.TheMarineRiskNoterelieduponbyrespondentasthebasisforitsclaim
forsubrogationisinsufficienttoprovesaidclaim.
Aspreviouslystated,theMarineRiskNotewasissuedonlyonNovember16,1995hence,withoutacopyofthemarineinsurancepolicy,itwouldbe
impossibleandsimplyguessworktoknowwhetherthecargowasinsuredduringthevoyagewhichstartedonNovember8,1995.Again,withoutthemarine
insurancepolicy,itwouldbeimpossibleforthisCourttoknowthefollowing:first,thespecificsoftheInstituteCargoClausesAandothertermsandconditions
perMarineOpenPolicy86168asalludedtointheMarineRiskNotesecond,ifthesaidtermsandconditionswereactuallycompliedwithbeforerespondent
paidNissansclaim.

Furthermore,areadingofthetranscriptoftherecordsclearlyshowthat,attheRTC,petitionerhadalreadyobjectedtothenonpresentationofthemarine
insurancepolicy,towit:

Q.AreyoualsotheonepreparingtheMarineInsuranceContract?
A.No,sir.

Q.Whoistheone?
A.OurMarineCargoUnderwritingDepartment.

Q.Anddoyouknowanybodyinthatdepartment?
A.Yes,sir.

Q.Andyouwereawarethatthisparticularcargooftheshipmentwasinsured?

A.Yes,sir,perpolicyissued.

Q.AndthatyouarereferringtoExhibit?
A.TheMarineCargoRisk.

Q.IsthistheonlycontractofInsurancebetweenPrudentialGuaranteeandNissan?
A.Sir,thereisaMarineOpenPolicy.

Q.Doyouhaveanycopyofthat?
A.Itisintheoffice.

Atty.AlojadoCanyouproducethatcopy?
Atty.ZapaMayweknowtherequestofcounselforproducingthisMarineOpenPolicy?

Atty.AlojadoThebasisofthequestionistheanswerofthewitnesswhichsaysthatthereisanothercontractofinsurance.

COURTYes,thatisaMarineOpenPolicy.
AreyoufamiliarwithMarineOpenPolicy?

Atty.AlojadoYes,YourHonor.
Butwewouldalsoliketobefamiliarizewith
thatcontract.

COURTButyouknowalreadyaMarineOpenPolicy

Atty.AlojadoYes,YourHonor.

COURTIdonotknowifyouworkasalawyerforseveralInsuranceCompany?

Atty.AlojadoNo,YourHonor.Honestly,YourHonorIworkedas
aMaritimelawyer.

COURTThenyoushouldknowwhatisMarineOpenPolicy.
Atty.AlojadoIwouldliketoknowthespecificationofthe
MarineOpenPolicyinthisregard.

Atty.ZapaIthinkyourHonor,betweentheplaintiffandthedefendantthereisnoissueagainsttheinsurance.

COURTYesbecausethiswitnessitnottestifyingontheMarineOpenPolicy.


Atty.AlojadoWesubmit.

COURTProceed.

Atty.Alojado
Q.ButthereisaMarineOpenPolicy
[27]
A.Yes,sir.

xxxx

COURT
Q.Isthepolicyastandingpolicy,acontinuingpolicyorisitgoingonlyforonlyayearorforaparticularshipmentorwhat?
A.Forthisparticularconsignee,theyhaveMarineOpenPolicy.

Atty.AlojadoThatwasnotpresented.

COURTThatswhyImasking.Sothepolicyisnotonlyforaparticularshipment,butallothershipmentsthatmaycome?
A.Yes,YourHonor.

Q.Arecovered?
A.Yes,YourHonor.

Q.Withoutanyspecifications?
[28]
A.Yes,YourHonor.

Clearly,petitionerwasnotremisswhenitopenlyobjectedtothenonpresentationoftheMarineInsurancePolicy.Astestifiedtobyrespondentswitness,
theyhadacopyofthemarineinsurancepolicyintheiroffice.Thus,respondentwasalreadyapprisedofthepossibleimportanceofthesaiddocumenttotheir
cause.

Inaddition,thisCourttakesnoticethatnotwithstandingthattheRTCmayhavedeniedtherepeatedmanifestationofpetitionerofthenonpresentationof
the marine insurance policy, the same by itself does not exonerate respondent. As plaintiff, it was respondents burden to present the evidence necessary to

substantiateitsclaim.

InitsComplaint,

[29]
respondent alleged: That the abovedescribed shipment was insured for P14,173,042.91 against all risks under plaintiffs Marine
[30]
Therefore,otherthanthemarinecargorisknote,respondentshouldhavealsopresentedthe

CargoRiskNoteNo.39821/MarineOpenPolicyNo.86168.

marineinsurancepolicy,asthesamealsoservedasthebasisforitscomplaint.Section7,Rule9ofthe1997RulesofCivilProcedure,provide:

SECTION 7. Action or defense based on document.Whenever an action or defense is based upon a written instrument or document, the substance of such
instrumentordocumentshallbesetforthinthepleading,andtheoriginaloracopythereofshallbeattachedtothepleadingasanexhibit,whichshallbedeemedtobeapart
ofthepleading,orsaidcopymay,withlikeeffect,besetforthinthepleading.

Onthisscore,Malayanisinstructive:

MalayansrightofrecoveryasasubrogeeofABBKoppelcannotbepredicatedaloneontheliabilityoftherespondenttoABBKoppel,eventhoughsuchliability
willnecessarilyhavetobeestablishedatthetrialforMalayantorecover.BecauseMalayansrighttorecoveryderivesfromcontractualsubrogationasanincidenttoan
insurancerelationship,andnotfromanyproximateinjurytoitinflictedbytherespondents,itiscriticalthatMalayanestablishthelegalbasisofsuchrighttosubrogationby
presentingthecontractconstitutiveoftheinsurancerelationshipbetweenitandABBKoppel.Withoutsuchlegalbasis,itscauseofactioncannotsurvive.

OurproceduralrulesmakeplainhoweasilyMalayancouldhaveadducedtheMarineInsurancePolicy.Ideally,thisshouldhavebeenaccomplishedfrom
themomentitfiledthecomplaint.SincetheMarineInsurancePolicywasconstitutiveoftheinsurerinsuredrelationshipfromwhichMalayandrawsitsrightto
[31]
subrogation,suchdocumentshouldhavebeenattachedtothecomplaintitself,asprovidedforinSection7,Rule9ofthe1997RulesofCivilProcedure:xxx

Therefore,sincerespondentalludedtoanactionabledocumentinitscomplaint,thecontractofinsurancebetweenitandNissan,asintegraltoitscauseof
actionagainstpetitioner,theMarineInsurancePolicyshouldhavebeenattachedtotheComplaint.Eveninitsformalofferofevidence,respondentalludedtothe
marineinsurancepolicywhichcanstandindependentoftheMarineCargoRiskNote,towit:

EXHB=MarineCargoRiskNoteNo.39821/95DatedNovember16,1995.

[32]
Purpose:AsproofthatthesubjectshipmentwascoveredbyinsuranceforP14,173,042.91underMarineOpenPolicyNo.86168.

Itissignificantthatthedatewhentheallegedinsurancecontractwasconstitutedcannotbeestablishedwithcertaintywithoutthecontractitself.Saidpoint
iscrucialbecausetherecanbenoinsuranceonariskthathadalreadyoccurredbythetimethecontractwasexecuted.

[33]
Surely,theMarineRiskNoteonits

facedoesnotspecifywhentheinsurancewasconstituted.
TheimportanceofthepresentationoftheMarineInsurancePolicywasalsoemphasizedinWallemPhilippinesShipping,Inc.v.PrudentialGuarantee&
[34]
Assurance,Inc.,
wherethisCourtruled:

xxxWallemstillcannotbeheldliablebecauseofthefailureofPrudentialtopresentthecontractofinsuranceoracopythereof.Prudentialclaimsthatitissubrogatedtothe
rightsofGMCpursuanttotheirinsurancecontract.Forthispurpose,itsubmittedasubrogationreceipt(Exh.J)andamarinecargorisknote(Exh.D).However,asthetrial
court pointed out, this is not sufficient. As GMCs subrogee, Prudential can exercise only those rights granted to GMC under the insurance contract. The contract of
insurancemustbepresentedinevidencetoindicatetheextentofitscoverage.Astherewasnodeterminationofrightsundertheinsurancecontract,thisCourtsrulingin
HomeInsuranceCorporationv.CourtofAppealsisapplicable:
The insurance contract has not been presented. It may be assumed for the sake of argument that the subrogation receipt may nevertheless be used to establish the
relationshipbetweenthepetitioner[HomeInsuranceCorporation]andtheconsignee[NestlPhil.]andtheamountpaidtosettletheclaim.Butthatisallthedocumentcan
do.Byitselfalone,thesubrogationreceiptisnotsufficienttoprovethepetitionersclaimholdingtherespondent[MabuhayBrokerageCo.,Inc.]liableforthedamagetothe
engine.
....
It is curious that the petitioner disregarded this rule, knowing that the best evidence of the insurance contract was its original copy, which was presumably in the
[35]
possessionofHomeitself.Failuretopresentthisoriginal(orevenacopyofit),forreasonstheCourtcannotcomprehend,mustprovefataltothispetition.

Finally,therehavebeencaseswherethisCourtruledthatthenonpresentationofthemarineinsurancepolicyisnotfatal,ascanbegleanedin
International,wherethisCourtheld:

Indeed,jurisprudencehasitthatthemarineinsurancepolicyneedstobepresentedinevidencebeforethetrialcourtorevenbelatedlybeforetheappellatecourt.In
MalayanInsuranceCo.,Inc.v.RegisBrokerageCorp.,theCourtstatedthatthepresentationofthemarineinsurancepolicywasnecessary,astheissuesraisedthereinarose
fromtheveryexistenceofaninsurancecontractbetweenMalayanInsuranceanditsconsignee,ABBKoppel,evenpriortothelossoftheshipment.InWallemPhilippines

Shipping,Inc.v.PrudentialGuaranteeandAssurance,Inc.,theCourtruledthattheinsurancecontractmustbepresentedinevidenceinordertodeterminetheextentofthe
coverage.ThiswasalsotherulingoftheCourtinHomeInsuranceCorporationv.CourtofAppeals.
However,asineverygeneralrule,thereareadmittedexceptions.InDelsanTransportLines,Inc.v.CourtofAppeals,theCourtstatedthatthepresentationofthe
insurancepolicywasnotfatalbecausethelossofthecargoundoubtedlyoccurredwhileonboardthepetitioner'svessel,unlikeinHomeInsuranceinwhichthecargopassed
throughseveralstageswithdifferentpartiesanditcouldnotbedeterminedwhenthedamagetothecargooccurred,suchthattheinsurershouldbeliableforit.

AsinDelsan,thereisnodoubtthatthelossofthecargointhepresentcaseoccurredwhileinpetitioner'scustody.Moreover,thereisnoissueasregardsthe
provisionsofMarineOpenPolicyNo.MOP12763,suchthatthepresentationofthecontractitselfisnecessaryforperusal,nottomentionthatitsexistencewas
alreadyadmittedbypetitionerinopencourt.Andeventhoughitwasnotofferedinevidence,itstillcanbeconsideredbythecourtaslongastheyhavebeenproperly
[36]
identifiedbytestimonydulyrecordedandtheyhavethemselvesbeenincorporatedintherecordsofthecase.

AlthoughtheCAmayhaveruledthatthedamagetothecargooccurredwhilethesamewasinpetitionerscustody,thisCourtcannotapplytherulingin
Internationaltothecaseatbar.Incontrast,unlikeinInternationalwheretherewasnoissueasregardstheprovisionsofthemarineinsurancepolicy,suchthatthe
presentationofthecontractitselfisnecessaryforperusal,hereinpetitionerhadrepeatedlyobjectedtothenonpresentationofthemarineinsurancepolicyandhad
manifesteditsdesiretoknowthespecificprovisionsthereof.Moreover,andthesameiscritical,themarinerisknoteinthecaseatbarisquestionablebecause:
first,itisdatedonthesamedaythecargoesarrivedattheportofManilaandnotduringthedurationofthevoyagesecond,withouttheMarineInsurancePolicy
toelucidateonthespecificsofthetermsandconditionsalludedtointhemarinerisknote,itwouldbesimplyguessworktoknowifthesamewerecomplied
with.

Lastly,tocastalldoubtonthemeritsofhereinpetition,thisCourtisguidedbytherulinginMalayan,towit:

ItcannotbedeniedfromtheonlyestablishedfactsthatMalayanandABBKoppelcomportedasiftherewasaninsurancerelationshipbetweenthemanddocuments
exist that evince the presence of such legal relationship. But, under these premises, the very insurance contract emerges as the white elephant in the room an obdurate
presencewhicheverybodyreactsto,yet,legallyinvisibleasamatterofevidencesincenoattempthadbeenmadetoproveitscorporealexistenceinthecourtoflaw.Itmay
seemcommonsensicaltoconcludeanywaythattherewasacontractofinsurancebetweenMalayanandABBKoppelsincetheyobviouslybehavedinamannerthat
indicates such relationship, yet the same conclusion could be had even if, for example, those parties staged an elaborate charade to impress on the world the
existence of an insurance contract when there actually was none. While there is absolutely no indication of any bad faith of such import by Malayan or ABB
Koppel,thefactthatthecommonsensicalconclusioncanbedrawneveniftherewasbadfaiththatconvincesustorejectsuchlineofthinking.

TheCourtfurtherrecognizesthedangerasprecedentshouldwesustainMalayansposition,andnotonlybecausesucharulingwouldformallyviolatethe
ruleonactionabledocuments.Malayanwouldhaveuseffectuateaninsurancecontractwithouthavingtoconsideritsparticulartermsandconditions,andona
blindleapoffaiththatsuchcontractisindeedvalidandsubsisting.TheconclusionfurtherworkstotheutterprejudiceofdefendantssuchasRegisorPaircargosince
theywouldbedeprivedtheopportunitytoexaminethedocumentthatgivesrisetotheplaintiffsrighttorecoveragainstthem,ortoraiseargumentsorobjectionsagainstthe

validityoradmissibilityofsuchdocument.Ifalegalclaimisirrefragablysourcedfromanactionabledocument,thedefendantscannotbedeprivedoftherighttoexamineor
utilizesuchdocumentinordertointelligentlyraiseadefense.Theinabilityorrefusaloftheplaintifftosubmitsuchdocumentintoevidenceconstitutesaneffective
denial of that right of the defendant which is ultimately rooted in due process of law, to say nothing on how such failure fatally diminishes the plaintiffs
[37]
substantiationofitsowncauseofaction.

Inconclusion,thisCourtrulesthatbasedontheapplicablejurisprudence,becauseoftheinadequacyoftheMarineCargoRiskNoteforthereasonsalready
stated, it was incumbent on respondent to present in evidence the Marine Insurance Policy, and having failed in doing so, its claim of subrogation must
necessarilyfail.

Becauseoftheforegoing,itwouldbeunnecessarytodiscusstheseconderrorraisedbypetitioner.

WHEREFORE,premisesconsidered,thepetitionisGRANTED.TheApril26,2006DecisionandAugust15,2006ResolutionoftheCourtofAppeals
inCAG.R.CVNo.68165areherebyREVERSEDandSETASIDE.TheComplaintinCivilCaseNo.961665isDISMISSED.

SOORDERED.

DIOSDADOM.PERALTA
AssociateJustice

WECONCUR:

CONSUELOYNARESSANTIAGO
AssociateJustice
Chairperson

MINITAV.CHICONAZARIOPRESBITEROJ.VELASCO,JR.
AssociateJusticeAssociateJustice

ANTONIOEDUARDOB.NACHURA
AssociateJustice

ATTESTATION

IattestthattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourts
Division.

CONSUELOYNARESSANTIAGO
AssociateJustice
ThirdDivision,Chairperson

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairpersonsAttestation,IcertifythattheconclusionsintheaboveDecisionwere
reachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

[1]
Rollo,pp.320.
[2]
PennedbyAssociateJusticeEdgardoP.Cruz,withAssociateJusticesRosalindaAsuncionVicenteandSesinandoE.Villon,concurringid.at2434.
[3]
Id.at36.
[4]
Rollo,p.24.
[5]
Id.
[6]
Id.
[7]
ExhibitJrecordspp.181183.
[8]
Rollo,p.25.
[9]
ExhibitArecords,pp.7678.
[10]
Rollo,p.25.
[11]
Id.
[12]
Rollo,pp.109115.
[13]
Id.at114115.
[14]
Id.at3334.
[15]
420Phil.824,835(2001).
[16]
Rollo,p.32.
[17]
Id.at11.
[18]
PhilippineCharterInsuranceCorporationv.UnknownOwneroftheVesselM/VNationalHonor,G.R.No.161833,July8,2005,463SCRA202,215.

[19]
AboitizShippingCorporationv.PhilippineAmericanGeneralInsuranceCo.,G.R.No.77530,October5,1989,178SCRA357,360361.
[20]
G.R.No.161539,June27,2008,556SCRA194.
[21]
Id.at202203.(Emphasissupplied.)
[22]
Records,p.79.
[23]
G.R.No.172156,November23,2007,538SCRA681.
[24]
Id.at689.
[25]
Records,pp.186188.
[26]
Id.at186.
[27]
TSN,May20,1997,pp.1418.
[28]
TSN,July3,1997,pp.910.
[29]
Records,pp.15.
[30]
Id.at.2.
[31]
MalayanInsuranceCo.,Inc.v.RegisBrokerageCorp.,supranote23,at690.
[32]
Records,p.72.
[33]
MalayanInsuranceCo.,Inc.v.RegisBrokerageCorp.,supranote23,at694.
[34]
G.R.No.152158,February7,2003,397SCRA158.
[35]
Id.at170171.
[36]
InternationalContainerTerminalServices,Inc.v.FGUInsuranceCorporation,supranote20,at203204.
[37]
MalayanInsuranceCo.,Inc.v.RegisBrokerageCorp.,supranote23,at692693.(Emphasissupplied.)