Filipino Merchants Insurance Co., Inc. vs. Court of Appeals

Facts:

The dispute arose from the shipment of fishmeal loaded aboard the SS Bougainville and unloaded at the Port of Manila on or about December 11, 1976. Choa Tiek Seng (private respondent), the consignee/vendee of the goods, insured the cargo with Filipino Merchants Insurance Co., Inc. (petitioner) under Cargo Policy No. M-2678 for P267,653.59, described as 600 metric tons of fishmeal from Bangkok to Manila on a warehouse-to-warehouse, “all risks” basis. In fact, the importation comprised 59.940 metric tons in 666 new gunny bags at CNF Manila. Upon discharge the arrastre contractor E. Razon, Inc. and the ship’s agent jointly noted some bags in bad order; subsequent surveys (including insurer’s surveyor) showed a total of 227 bad-order bags (12,148 kilos). The consignee made formal claims against the insurer (P51,568.62) and the vessel; the insurer refused payment.

The consignee sued the insurer for the claimed loss. The insurer filed a third-party complaint against the vessel owner Compagnie Maritime Des Chargeurs Reunis and E. Razon, Inc.. After trial the trial court rendered judgment for the plaintiff (consignee), ordering the insurer to pay P51,568.62 with legal interest, and holding the third-party defendants jointly and severally liable to reimburse amounts paid by the third-party plaintiff. On appeal the Court of Appeals affirmed the trial court insofar as the main award to the consignee was concerned but modified the third-party adjudication: it ordered E. Razon, Inc. to reimburse the third-party plaintiff P25,471.80 with interest and dismissed the claim against Compagnie Maritime Des Chargeurs Reunis.

Petitioner insurer sought review in the Supreme Court contesting (1) the Court of Appeals’ interpretation of the all risks clause (arguing that the insured failed to prove a fortuitous or accidental cause), (2) the existence...(Pro-only)

Issues:

• Did the Court of Appeals err in holding the insurer liable under the maritime “all risks” policy despite petitioner’s contention that the insured failed to prove a fortuitous, accidental or causal event?
• Did the consignee (private respondent) have an insurable interest in the subject cargo sufficient to sustain recovery under the policy?
• Was the consignee barred from recovery by fraud or concealment for allegedly not ...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

• (Pro-only)