Leon is the owner of a condominium unit located directly above the condominium unit owned by Anj. In 2014, Leon undertook renovations in his unit’s bathroom, which caused water to leak from his bathroom down to Anj’s unit, and caused extensive damage to Anj’s belongings. As Anj had obtained property insurance on her unit and its contents from Proverbial Insurance Co. (PIC), Anj was able to recover the value of the damage in September 2016. In October 2022, PIC, as subrogee of Anj, sued Leon to recover the insurance proceeds it paid to Anj. Leon interposed prescription to dismiss the suit of PIC. PIC counters that the payment of the insurance proceeds in 2016 created, by way of legal subrogation, a 10-year period within which to file the suit against Leon. Is PIC correct? Explain briefly. (5 points)
Suggested answer only. Not an official answer and not legal advice.
No, PIC is not correct. Under Article 1146 of the Civil Code, an action based on quasi-delict prescribes in four years. Under Article 1303, subrogation transfers the credit with all appurtenant rights. An
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Quick check
What is the statutory prescriptive period for bringing a civil action based on a quasi-delict under Article 1146 of the Civil Code?
Article 1146 provides that actions arising from quasi-delicts prescribe in four years from the time the cause of action accrues.
Under Article 1303 of the Civil Code, what is the legal effect of subrogation on the rights transferred to the subrogee?
Subrogation transfers the original credit with all its appurtenant rights, stepping directly into the shoes of the original creditor.
How does the payment of insurance proceeds affect the running of the prescriptive period against a third-party tortfeasor?
Insurance indemnification does not reset or create a new prescriptive period against the original wrongdoer.
Why was Proverbial Insurance Co.'s suit against Leon barred by prescription when filed in October 2022?
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What prescriptive period applies to an insurer seeking recovery from a tortfeasor as a subrogee of the insured?
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Learn more about these topics
1. Quasi-Delict Prescription
Under Article 1146 of the Civil Code, an action arising from a quasi-delict must be instituted within four years from the time the cause of action accrues. The cause of action accrues at the exact moment the negligent act occurs and inflicts physical injury or property damage upon the victim. Once the four-year statutory period elapses without judicial intervention, the victim's right of action is completely extinguished by prescription, barring any subsequent civil action against the tortfeasor.
2. Legal Subrogation Principles
Under Article 1303 of the Civil Code, legal subrogation transfers to the subrogee the credit with all rights appertaining thereto, either against the debtor or against third persons. In property insurance, upon indemnification of the insured, the insurer becomes subrogated to the rights of the insured against the wrongdoer. Subrogation does not create a new cause of action or reset statutory prescriptive periods; rather, the insurer merely steps into the shoes of the insured and acquires only the remaining rights and period.
3. Step In Shoes
An insurer exercising subrogation rights under Article 2207 of the Civil Code acquires no greater rights than those possessed by the insured at the time of indemnification. Because subrogation does not generate a separate contract between the insurer and the wrongdoer, the ten-year prescriptive period for written contracts under Article 1144 does not apply. The insurer remains subject to the original four-year prescriptive period governing quasi-delicts, computed from the date the original property damage occurred.