FRANCISCO JARQUE V. SMITH BELL GR NO.

L-32986

FACTS: Francisco Jarque, plaintiff, owner of the motorboat Pandan and held a marine
insurance policy (45k) on the boat, the policy is issued by the National Union Fire Insurance
Company and according to the provisions of a "rider" attached to the policy, the insurance was
against the "absolute total loss of the vessel only."

Later on, the ship ran into very heavy sea off the Islands of Ticlin, and it became necessary to
jettison (abandon/ditch) a portion of the cargo. As a result of the jettison, the National Union Fire
Insurance Company was assessed in the sum of P2,610.86 as its contribution to the general
average.

The insurance company, insisting that its obligation did not extend beyond the insurance of the
"absolute total loss of the vessel only, and to pay proportionate salvage of the declared value,"
refused to contribute to the settlement of the general average.

Thus the actions was instituted which the lower court rules in favor of plaintiff and ordered
National Union to pay the plaintiff (2k+) as its part of the indemnity for the general average.

NUFIC appealed to the SC claiming that the lower Court erred in (1) disregarding the
typewritten clause expressly limiting the liability of NUFIC to of total loss the wooden vessel and
to proportionate salvage charges, (2) holding that NUFIC is liable Pandan to contribute in the
loss resulting from the jettison.

ISSUE:

1. W/N THE TYPED RIDER PREVAILS OVER THE PRINTED POLICY – YES

UNDER THE LAW, Section 291 of the Code of Civil Procedure provides that "when an
instrument consists partly of written words and partly of a printed form and the two are
inconsistent, the former controls the latter."

The insurance contract, is printed in the English common form of marine policies.

Attached to the policy over and above the said clause is a "rider" containing typewritten
provisions, among which appears in capitalized type the following clause:

AGAINST THE ABSOLUTE TOTAL LOSS OF THE VESSEL ONLY, AND TO PAY
PROPORTIONATE SALVAGE CHARGES OF TEH DECLARED VALUE.

At the bottom of the same rider following the type written provisions therein set forth are the
following words: "Attaching to and forming part of the National Union Fire Insurance Co., Hull
Policy No. 1055."
It is a well settled rule that in case repugnance exists between written and printed portions of a
policy, the written portion prevails. THUS, “rider" prevails over the printed clause it covers.

2. W/N NUFIC IS STILL LIABLE FOR THE LOSS FROM THE JETTISON – YES

If there is no positive legislation to the contrary, the policy would be perhaps limited to the
absolute loss of the vessel.

However, the policy was executed in this jurisdiction & warranted to trade within the PH waters
only. Thus, the liability for the contribution rests upon the theory that there is a is quasi-contract
implied by law between the parties. NOT based on the express terms of the policy

Article 859 of the Code of Commerce - The article is mandatory – making the insurers bound to
contribute to the indemnity of the general average. There is nothing unfair in the provisions
because it simply puts the insurer on the same footing as the other persons who have interest in
the vessel.

IN THIS CASE, it is not disputed that the ship was in great peril, and that the jettison on the part
of the cargo was necessary to prevent a great danger the absolute loss. Since the jettion had as
much as a benefit to the underwriter (insurer) as that to the jettison owner of the cargo, the
insurer should also be required to contribute to the indemnity (just like how the owner of the
cargo did).

If the jettison was not done, and if the ship would have foundered (filled with water and sank),
and the underwriter’s loss would have been bigger than the contribution now demanded.

ART. 859. The underwriters of the vessel, of the freight, and of the cargo shall be obliged to pay
for the indemnity of the gross average in so far as is required of each one of these objects
respectively.