2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

536 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

*
No. L-36413. September 26, 1988.

MALAYAN INSURANCE CO., INC., petitioner, vs. THE

HON. COURT OF APPEALS (THIRD DIVISION) MARTIN
C. VALLEJOS, SIO CHOY, SAN LEON RICE MILL, INC.
and PANGASINAN TRANSPORTATION CO., INC.,
respondents.

Insurance; Third-Party Liability; Solidary Obligation; The

direct liability of the insurer under indemnity contracts against
third-party liability does not mean that the insurer can be held
solidarily liable with the insured and/or the other parties found at
fault.—While it is true that where the insurance contract provide
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 solidarily 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
tort.
Same; Same; Same; Same; Petitioner as insurer of Sio Choy is
liable to respondent Vallejos but it cannot be made solidarily liable
with the two principal tortfeasors.—In the case at bar, petitioner
as insurer of Sio Choy, is liable to respondent Vallejos, but it
cannot, as incorrectly held by the trial court, be made “solidarily”
liable with the two principal tortfeasors, namely respondents Sio
Choy and San

_______________

* SECOND DIVISION.

537

VOL. 165, SEPTEMBER 26, 1988 537

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 1/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

Malayan Insurance Co., Inc. vs. Court of Appeals

Leon Rice Mill, Inc. For if petitioner-insurer were solidarily liable

with said two (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.
Same; Same; Same; Same; Same; The trial court as upheld by
the Court of Appeals erred in holding petitioner solidarily liable
with respondents Sio Choy and San Leon Rice Mill, Inc. to
respondent Vallejos.—In the case at bar, the trial court held
petitioner together with respondents Sio Choy and San Leon Rice
Mills Inc. solidarily liable to respondent Vallejos for a total
amount of P29,103.00, with the qualification that petitioner’s
liability is only up to P20,000.00 In the context of a solidary
obligation, petitioner may be compelled by respondent Vallejos to
pay the entire obligation of P29,103.00, notwithstanding the
qualification made by the trial court. But, how can petitioner be
obliged to pay the entire obligation when the amount stated in its
insurance policy with respondent Sio Choy for indemnity against
third party liability is only P20,000.00? Moreover, the
qualification made in the decision of the trial court to the effect
that petitioner is sentenced to pay up to P20,000.00 only when the
obligation to pay P29,103.00 is made solidary, is an evident
breach of the concept of a solidary obligation. Thus, We hold that
the trial court, as upheld by the Court of Appeals, erred in holding
petitioner, solidarily liable with respondents Sio Choy and San
Leon Rice Mill, Inc. to respondent Vallejos.
Civil Law; Subrogation; Principle of Subrogation.—”x x x
Sub-rogation is a normal incident of indemnity insurance (Aetna
L. Ins. Co. vs. Moses, 287 U.S. 530, 77 L. ed. 477). 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 (44 Am.
Jr. 2nd 745, citing Standard Marine Ins. Co. vs. Scottish
Metropolitan Assurance Co., 283 U.S. 284, 75 L. ed. 1037). The
right of subrogation is of the highest equity. The loss in the first
instance is that of the insured but after reimbursement or
compensation, it becomes the loss of the insurer.
Same; Same; Same; The equitable right of subrogation as the
legal effect of payment inures to the insurer without any formal
assignment or any express stipulation to that effect in the policy.—
Although many policies including policies in the standard form,
now provide for subrogation, and thus determine the rights of

538

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 2/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

538 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

the insurer in this respect, the equitable right of subrogation as

the legal effect of payment inures to the insurer without any
formal assignment or any express stipulation to that effect in the
policy” (44 Am. Jur. 2nd 746). Stated otherwise, when the
insurance company pays for the loss, such payment operates as an
equitable assignment to the insurer of the property and all
remedies which the insured may have for the recovery thereof.
That right is not dependent upon, nor does it grow out of, any
privity of contract, (italics supplied) or upon written assignment of
claim, and payment to the insured makes the insurer an assignee
in equity.
Same; Same; Same; Same; Petitioner is subrogated to
whatever rights Sio Choy has against respondent San Leon Rice
Mill, Inc.—It follows, therefore, that petitioner, upon paying
respondent Vallejos the amount of not exceeding P20,000.00, shall
become the subrogee of the insured, the respondent Sio Choy; as
such, it is subrogated to whatever rights the latter has against
respondent San Leon Rice Mill, Inc. Article 1217 of the Civil Code
gives to a solidary debtor who has paid the entire obligation the
right to be reimbursed by his co-debtors for the share which
corresponds to each. In accordance with Article 1217, petitioner,
upon payment to respondent Vallejos and thereby becoming the
subrogee of solidary debtor Sio Choy, is entitled to reimbursement
from respondent San Leon Rice Mill, Inc.

PETITION for certiorari to review the judgment of the

Court of Appeals.

The facts are stated in the opinion of the Court.

     Freqillana, Jr. for petitioner.
          B.F. Estrella & Associates for respondent Martin
Vallejos.
          Vicente Erfe Law Office for respondent Pangasinan
Transportation Co., Inc.
       Nemesio Callanta for respondent Sio Choy and San
Leon Rice Mill, Inc.

PADILLA, J.:
**
Review on certiorari of the judgment of the respondent
appellate court in CA-G.R. No. 47319-R, dated 22 February

_______________

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 3/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

** Penned by Justice Ramon C. Fernandez, concurred in by Justices

Hermogenes Concepcion, Jr. and Emilio A. Gancayco.

539

VOL. 165, SEPTEMBER 26, 1988 539

Malayan Insurance Co., Inc. vs. Court of Appeals

1973, which
***
affirmed, with some modifications, the
decision, dated 27 April 1970, rendered in Civil Case No.
U-2021 of the Court of First Instance of Pangasinan.
The antecedent facts of the case are as follows:
On 29 March 1967, herein petitioner, Malayan
Insurance Co., Inc., issued in favor of private respondent
Sio Choy Private Car Comprehensive Policy No. MRO/PV-
15753, effective from 18 April 1967 to 18 April 1968,
covering a Willys jeep with Motor No. ET-03023, Serial No.
351672, and Plate No. J-21536, Quezon City, 1967. The
insurance coverage was for “own damage” not to exceed
P600.00 and “third-party liability” in the amount of
P20,000.00.
During the effectivity of said insurance policy, and more
particularly on 19 december 1967, at about 3:30 o’clock in
the afternoon, the insured jeep, while being driven by one
Juan P. Campollo, an employee of the respondent San Leon
Rice Mill, Inc., collided with a passenger bus belonging to
the respondent Pangasinan Transportation Co., Inc.
(PANTRANCO, for short) at the national highway in
Barrio San Pedro, Rosales, Pangasinan, causing damage to
the insured vehicle and injuries to the driver, Juan P.
Campollo, and the respondent Martin C. Vallejos, who was
riding in the ill-fated jeep.
As a result, Martin C. Vallejos filed an action for
damages against Sio Choy, Malayan Insurance Co., Inc.
and the PANTRANCO before the Court of First Instance of
Pangasinan, which was docketed as Civil Case No. U-2021.
He prayed therein that the defendants be ordered to pay
him, jointly and severally, the amount of P15,000.00, as
reimbursement for medical and hospital expenses;
P6,000.00, for lost income; P51,000.00 as actual, moral and
compensatory damages; and P5,000.00, for attorney’s fees.
Answering, PANTRANCO claimed that the jeep of Sio
Choy was then operated at an excessive speed and bumped
the PANTRANCO bus which had moved to, and stopped at,
the shoulder of the highway in order to avoid the jeep; and
that it had observed the diligence of a good father of a
family to prevent damage, especially in the selection and
supervision of
central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 4/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

_______________

*** Penned by Judge Vicente M. Santiago, Jr.

540

540 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

its employees and in the maintenance of its motor vehicles.

It prayed that it be absolved from any and all liability.
Defendant Sio Choy and the petitioner insurance
company, in their answer, also denied liability to the
plaintiff, claiming that the fault in the accident was solely
imputable to the PANTRANCO.
Sio Choy, however, later filed a separate answer with a
cross-claim against the herein petitioner wherein he
alleged that he had actually paid the plaintiff, Martin C.
Vallejos, the amount of P5,000.00 for hospitalization and
other expenses, and, in his cross-claim against the herein
petitioner, he alleged that the petitioner had issued in his
favor a private car comprehensive policy wherein the
insurance company obligated itself to indemnify Sio Choy,
as insured, for the damage to his motor vehicle, as well as
for any liability to third persons arising out of any accident
during the effectivity of such insurance contract, which
policy was in full force and effect when the vehicular
accident complained of occurred. He prayed that he be
reimbursed by the insurance company for the amount that
he may be ordered to pay.
Also later, the herein petitioner sought, and was
granted, leave to file a third-party complaint against the
San Leon Rice Mill, Inc. for the reason that the person
driving the jeep of Sio Choy, at the time of the accident,
was an employee of the San Leon Rice Mill, Inc. performing
his duties within the scope of his assigned task, and not an
employee of Sio Choy; and that, as the San Leon Rice Mill,
Inc. is the employer of the deceased driver, Juan P.
Campollo, it should be liable for the acts of its employee,
pursuant to Art. 2180 of the Civil Code. The herein
petitioner prayed that judgment be rendered against the
San Leon Rice Mill, Inc., making it liable for the amounts
claimed by the plaintiff and/or ordering said San Leon Rice
Mill, Inc. to reimburse and indemnify the petitioner for any
sum that it may be ordered to pay the plaintiff.
After trial, judgment was rendered as follows:

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 5/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

“WHEREFORE, in view of the foregoing findings of this Court

judgment is hereby rendered in favor of the plaintiff and against
Sio Choy and Malayan Insurance Co., Inc., and third-party
defendant San Leon Rice Mill, Inc., as follows:

541

VOL. 165, SEPTEMBER 26, 1988 541

Malayan Insurance Co., Inc. vs. Court of Appeals

“(a) P4,103 as actual damages;

“(b) P18,000.00 representing the unearned income of plaintiff
Martin C. Vallejos for the period of three (3) years;
“(c) P5,000.00 as moral damages;
“(d) P2,000.00 as attorney’s fees or the total of P29,103.00,
plus costs.

“The above-named parties against whom this judgment is

rendered are hereby held jointly and severally liable. With
respect, however, to Malayan Insurance Co., Inc., its liability will
be up to only P20,000.00.
“As no satisfactory proof of cost of damage to its bus was
presented by defendant Pantranco, no award should be made in
its favor. Its counter-claim
1
for attorney’s fees is also dismissed for
not being proved.”

On appeal, the respondent Court of Appeals affirmed the

judgment of the trial court that Sio Choy, the San Leon
Rice Mill, Inc. and the Malayan Insurance Co., Inc. are
jointly and severally liable for the damages awarded to the
plaintiff Martin C. Vallejos. It ruled, however, that the San
Leon Rice Mill, Inc. has no obligation to indemnify or
reimburse the petitioner insurance company for whatever
amount it has been ordered to pay on its policy, since the
San Leon Rice Mill, Inc. is not a privy to the contract2 of
insurance between Sio Choy and the insurance company.
Hence, the present recourse by petitioner insurance
company.
The petitioner prays for the reversal of the appellate
court’s judgment, or, in the alternative, to order the San
Leon Rice Mill, Inc. to reimburse petitioner any amount, in
excess of one-half (1/2) of the entire amount of damages,
petitioner may be ordered to pay jointly and severally with
Sio Choy.
The Court, acting upon the petition, gave due course to
the same, but “only insofar as it concerns the alleged
liability of respondent San Leon Rice Mill, Inc. to
petitioner, it being understood that no other aspect of the
central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 6/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

decision of the Court of Appeals shall be reviewed, hence,

execution may already issue in favor of respondent Martin
C. Vallejos against the respon-

_______________

1 Record on Appeal, pp. 202-203.

2 Rollo, p. 46.

542

542 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

dents, without prejudice to the determination of whether or

not petitioner shall be entitled to reimbursement by
respondent San Leon Rice Mill, Inc. for the whole or part of
whatever the former may pay on the P20,000.00
3
it has been
adjudged to pay respondent Vallejos.”
However, in order to determine the alleged liability of
respondent San Leon Rice Mill, Inc. to petitioner, it is
important to determine first the nature or basis of the
liability of petitioner to respondent Vallejos, as compared to
that of respondents Sio Choy and San Leon Rice Mill, Inc.
Therefore, the two (2) principal issues to be resolved are
(1) whether the trial court, as upheld by the Court of
Appeals, was correct in holding petitioner and respondents
Sio Choy and San Leon Rice Mill, Inc. “solidarily liable” to
respondent Vallejos; and (2) whether petitioner is entitled
to be reimbursed by respondent San Leon Rice Mill, Inc. for
whatever amount petitioner has been adjudged to pay
respondent Vallejos on its insurance policy.
As to the first issue, it is noted that the trial court found,
as affirmed by the appellate court, that petitioner and
respondents Sio Choy and San Leon Rice Mill, Inc. are
jointly and severally liable to respondent Vallejos.
We do not agree with the aforesaid ruling. We hold
instead that it is only respondents Sio Choy and San Leon
Rice Mill, Inc, (to the exclusion of the petitioner) that are
solidarily liable to respondent Vallejos for the damages
awarded to Vallejos.
It must be observed that respondent Sio Choy is made
liable to said plaintiff as owner of the ill-fated Willys jeep,
pursuant to Article 2184 of the Civil Code which provides:

“Art. 2184. In motor vehicle mishaps, the owner is solidarily liable

with his driver, if the former, who was in the vehicle, could have,
by the use of due diligence, prevented the misfortune. it is

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 7/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

disputably presumed that a driver was negligent, if he had been

found guilty of reckless driving or violating traffic regulations at
least twice within the next preceding two months.
“If the owner was not in the motor vehicle, the provisions of
article 2180 are applicable.”

_______________

3 Rollo, p. 67.

543

VOL. 165, SEPTEMBER 26, 1988 543

Malayan Insurance Co., Inc. vs. Court of Appeals

On the other hand, it is noted that the basis of liability of

respondent San Leon Rice Mill, Inc. to plaintiff Vallejos,
the former being the employer of the driver of the Willys
jeep at the time of the motor vehicle mishap, is Article 2180
of the Civil Code which reads:

“Art. 2180. The obligation imposed by article 2176 is demandable

not only for one’s own acts or omissions, but also for those of
persons for whom one is responsible.
x x x      x x x      x x x
“Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry.
x x x      x x x      x x x
“The responsibility treated in this article shall cease when the
persons herein mentioned proved that they observed all the
diligence of a good father of a family to prevent damage.”

It thus appears that respondents Sio Choy and San Leon

Rice Mill, Inc. are the principal tortfeasors who are
primarily liable to respondent Vallejos. The law states that
the responsibility of two 4or more persons who are liable for
a quasi-delict is solidary.
On the other hand, the basis of petitioner’s liability is its
insurance contract with respondent Sio Choy. If petitioner
is adjudged to pay respondent Vallejos in the amount of not
more than P20,000.00, this is on account of its being the
insurer of respondent Sio Choy under the third party
liability clause included in the private car comprehensive
policy existing between petitioner and respondent Sio Choy
at the time of the complained vehicular accident.

5
central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 8/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165
5
In Guingon vs. Del Monte, a passenger of a jeepney had
just alighted therefrom, when he was bumped by another
passenger jeepney. He died as a result thereof. In the
damage suit filed by the heirs of said passenger against the
driver and owner of the jeepney at fault as well as against
the insurance company which insured the latter jeepney
against third party

_______________

4 Article 2194, Civil Code.

5 G.R. No. L-22042, August 17, 1967, 20 SCRA 1043.

544

544 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

liability, the trial court, affirmed by this Court, adjudged

the owner and the driver of the jeepney at fault jointly and
severally liable to the heirs of the victim in the total
amount of P9,572.95 as damages and attorney’s fees; while
the insurance company was sentenced to pay the heirs the
amount of P5,500.00 which was to be applied as partial
satisfaction of the judgment rendered against said owner
and driver of the jeepney. Thus, in said Guingon case, it
was only the owner and the driver of the jeepney at fault,
not including the insurance company, who were held
solidarily liable to the heirs of the victim.
While it is true that where the insurance contract
provides for indemnity against liability to third6 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 solidarily 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 tort.
In the case at bar, petitioner as insurer of Sio Choy, is
liable to respondent Vallejos, but it cannot, as incorrectly
held by the trial court, be made “solidarily” liable with the
two principal tortfeasors, namely respondents Sio Choy and
San Leon Rice Mill, Inc. For if petitioner-insurer were
solidarily liable with said two (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.

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 9/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

In solidary obligation, the creditor may enforce 7 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,8 or liability arising from an unknown
or contingent event.”

________________

6 Coquia vs. Fieldman’s Insurance Co., Inc., G.R. No. L-23276,

November 29, 1968, 26 SCRA 178.
7 The Imperial Insurance, Inc. vs. David, G.R. No. L-32425, November
21, 1984, 133 SCRA 317.
8 Philippine Phoenix Surety Insurance Co. vs. Woodworks, Inc., G.R.
No. L-25317, August 6, 1979, 92 SCRA 419.

545

VOL. 165, SEPTEMBER 26, 1988 545

Malayan Insurance Co., Inc. vs. Court of Appeals

In the case at bar, the trial court held petitioner together

with respondents Sio Choy and San Leon Rice Mills Inc.
solidarily liable to respondent Vallejos for a total amount of
P29,103.00, with the qualification that petitioner’s liability
is only up to P20,000.00. In the context of a solidary
obligation, petitioner may be compelled by respondent
Vallejos to pay the entire obligation of P29,013.00,
notwithstanding the qualification made by the trial court.
But, how can petitioner be obliged to pay the entire
obligation when the amount stated in its insurance policy
with respondent Sio Choy for indemnity against third party
liability is only P20,000.00? Moreover, the qualification
made in the decision of the trial court to the effect that
petitioner is sentenced to pay up to P20,000.00 only when
the obligation to pay P29,103.00 is made solidary, is an
evident breach of the concept of a solidary obligation. Thus,
We hold that the trial court, as upheld by the Court of
Appeals, erred in holding petitioner, solidarily liable with
respondents Sio Choy and San Leon Rice Mill, Inc. to
respondent Vallejos.
As to the second issue, the Court of Appeals, in affirming
the decision of the trial court, ruled that petitioner is not
entitled to be reimbursed by respondent San Leon Rice
Mill, Inc. on the ground that said respondent is not privy to
the contract of insurance existing between petitioner and
respondent Sio Choy. We disagree.

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 10/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

The appellate court overlooked the principle of

subrogation in insurance contracts. Thus—

“x x x Subrogation is a normal incident of indemnity insurance

(Aetna L. Ins. Co. vs. Moses, 287 U.S. 530, 77 L. ed. 477). 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
(44 Am. Jur. 2nd 745, citing Standard Marine Ins. Co. vs. Scottish
Metropolitan Assurance Co., 283 U.S. 284, 75 L. ed. 1037).
“The right of subrogation is of the highest equity. The loss in
the first instance is that of the insured but after reimbursement
or compensation, it becomes the loss of the insurer (44 Am. Jur.
2d, 746, note 16, citing Newcomb vs. Cincinnati Ins. Co., 22 Ohio
St. 382).
“Although many policies including policies in the standard
form, now provide for subrogation, and thus determine the rights
of the insurer in this respect, the equitable right of subrogation as
the legal

546

546 SUPREME COURT REPORTS ANNOTATED

Malayan Insurance Co., Inc. vs. Court of Appeals

effect of payment inures to the insurer without any formal

assignment or any express stipulation to that effect in the policy”
(44 Am. Jur. 2nd 746). Stated otherwise, when the insurance
company pays for the loss, such payment operates as an equitable
assignment to the insurer of the property and all remedies which
the insured may have for the recovery thereof. That right is not
dependent upon, nor does it grow out of, any privity of contract,
(italics supplied) or upon written assignment of claim, and
payment to the insured makes the insurer an assignee in equity
(Shambley v. Jobe-Blackley
9
Plumbing and Heating Co., 264 N.C.
456, 142 SE 2d 18).”

It follows, therefore, that petitioner, upon paying

respondent Vallejos the amount of not exceeding
P20,000.00, shall become the subrogee of the insured, the
respondent Sio Choy; as such, it is subrogated to whatever
rights the latter has against respondent San Leon Rice
Mill, Inc. Article 1217 of the Civil Code gives to a solidary
debtor who has paid the entire obligation the right to be
reimbursed by his co-debtors for the share which
corresponds to each.

“Art. 1217. Payment made by one of the solidary debtors

extinguishes the obligation. If two or more solidary debtors offer

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 11/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

to pay, the creditor may choose which offer to accept.

“He who made the payment may claim from his co-debtors only
the share which corresponds to each, with the interest for the
payment already made. If the payment is made before the debt is
due, no interest for the intervening period may be demanded.
x      x      x.”

In accordance with Article 1217, petitioner, upon payment

to respondent Vallejos and thereby becoming the subrogee
of solidary debtor Sio Choy, is entitled to reimbursement
from respondent San Leon Rice Mill, Inc.
To recapitulate then: We hold that only respondents Sio
Choy and San Leon Rice Mill, Inc. are solidarily liable to
the respondent Martin C. Vallejos for the amount of
P29,103.00. Vallejos may enforce the entire obligation on
only one of said solidary debtors. If Sio Choy as solidary
debtor is made to pay

_______________

9 Fireman’s Fund Insurance Company, et al. vs. Jamila & Company,

Inc., et al., G.R. No. L-27427, April 7, 1976, 70 SCRA 323.

547

VOL. 165, SEPTEMBER 26, 1988 547

Malayan Insurance Co., Inc. vs. Court of Appeals

for the entire obligation (P29,103.00) and petitioner, as

insurer of Sio Choy, is compelled to pay P20,000.00 of said
entire obligation, petitioner would be entitled, as subrogee
of Sio Choy as against San Leon Rice Mills, Inc., to be
reimbursed by the latter in the amount of P14,551.50
(which is 1/2 of P29,103.00).
WHEREFORE, the petition is GRANTED. The decision
of the trial court, as affirmed by the Court of Appeals, is
hereby AFFIRMED, with the modification above-
mentioned. Without pronouncement as to costs.
SO ORDERED.

          Melencio-Herrera (Chairman), Paras, Sarmiento

and Regalado, JJ., concur.

Petition granted. Decision affirmed with modification.

Note.—Subrogation can only exist after insurer has

paid the insured. Insurer can be subrogated to only such
rights as insured may have should insured release the
wrongdoer after payment is received. (Manila Mahogany
central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 12/13
2/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 165

Manufacturing Corporation vs. Court of Appeals, 154 SCRA

650.)

——o0o——

548

© Copyright 2020 Central Book Supply, Inc. All rights reserved.

central.com.ph/sfsreader/session/000001704741034129294f2e003600fb002c009e/t/?o=False 13/13