FEDERAL EXPRESS CORPORATION vs.

AMERICAN HOME INSURANCE CORP AND

PHILAM INSURANCE COMPANY GR No 150094, Aug 18, 2004

Facts: Smithklein caused the transportation of 109 cartons of veterinary

biologicals. The Shipment was initially loaded to Burlington Air Express and then
later on forwarded to the petitioner for delivery to the consignee. When the
consignee received the same it was found out that goods was damaged and
decided to abandon the shipment and declared a total loss and then claimed
against the insurance company. The insurance company paid the loss.

Issue: Whether or not there is legal subrogation on the part of the Insurance
Company

Held: Yes. Upon payment, the insurer’s entitlement to subrogation pro tanto
equips the insurance company with a cause of action in case of a contractual
breach or negligence. The insurance company stands in the same footing or in
substitution of the insured party.