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Cebu Shipyard V William Lines
Cebu Shipyard V William Lines
Cebu Shipyard V William Lines
because the insurance policy denominates the assured and the beneficiaries of the insurance. Thus when
the insurance policy names only one party as the assured thereunder, the claim of another that it is a co-
assured is unfounded.
Although contracts of adhesion have been consistently upheld as valid per se, as binding as an ordinary
contract, the Court recognizes instances when reliance on such contracts cannot be favored especially
where the facts and circumstances warrant that subject stipulations be disregarded.
To allow a repair entity to limit its liability to P1M notwithstanding the fact that the total loss suffered by
assued amounted to P45M would sanction the exercise of a degree of diligence short of what is ordinarily
required because then, it would not be difficult for the former to escape liability by the simple expedient
of paying an amount very much lower than the actual damages or loss suffered by the latter.
CSEWs Defenses:
1. We are not negligent because we did not have management and control over M/V Manila City. Although brought to CSEW for repair, William Lines
retained control over vessel as ship captain and crew were still present.
2. Prudential is not entitled to be subrogated to the rights of William Lines, Inc., theorizing that (1) the fire which gutted M/V Manila City was an
excluded risk and (2) it is a co-assured under the Marine Hull Insurance Policy.
SC:
1. the fire that occurred and consumed M/V Manila City would not have happened in the ordinary course of thing, hence negligence must have
occurred. The agency charged with negligence as found by trial court and CA is CSEW which had control over subject vessel when it was docked for
annual repairs.
2. Upon proof of payment by Prudential to William Lines, Inc., the former was subrogated to the right of the latter to indemnification from CSEW.