Title | 357888795 Keppel Cebu Shipyard Inc vs Pioneer Insurance and Surety Corporation Case Digest |
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Author | Joshy Mercado |
Course | Columbia Law/nyu law Exchange |
Institution | Columbia University in the City of New York |
Pages | 1 |
File Size | 65.4 KB |
File Type | |
Total Downloads | 77 |
Total Views | 128 |
Digest...
13. Keppel Cebu Shipyard, Inc. vs. Pioneer Insurance and Surety Corporation, 601 SCRA 96, September 25, 2009 KEPPEL CEBU SHIPYARD, INC. vs. PIONEER INSURANCE AND SURETY CORPORATION x - - - - - - - - - - - - - - - - - - - - - - -x PIONEER INSURANCE AND SURETY CORPORATION vs. KEPPEL CEBU SHIPYARD, INC. G.R. Nos. 180880-81 | September 25, 2009 | Nachura, J.
In marine insurance, a constructive total loss occurs under any of the conditions set forth in Section 139 of the Insurance Code, which provides: “a person insured by a contract of marine insurance may abandon the thing insured, or any particular portion hereof separately valued by the policy, or otherwise separately insured, and recover for a total loss thereof, when the cause of the loss is a peril insured against: (a) If more than three-fourths thereof in value is actually lost, or would have to be expended to recover it from the peril; (b) If it is injured to such an extent as to reduce its value more than three-fourths.
FACTS: KCSI and WG&A executed a Shiprepair Agreement wherein KCSI would renovate and reconstruct WG&A’s M/V Superferry 3 using its dry docking facilities pursuant to its restrictive safety and security rules and regulations. Prior to the execution of the Shiprepair Agreement, Superferry 3 was already insured by WG&A with Pioneer. In the course of its repair, M/V Superferry 3 was gutted by fire. Claiming that the extent of the damage was pervasive, WG&A declared the vessels damage as a total constructive loss and, hence, filed an insurance claim with Pioneer. Pioneer paid the insurance claim of WG&A in turn, executed a Loss and Subrogation Receipt in favor of Pioneer. Pioneer claimed for reimbursement armed by the receipt but KSCI did not hid to such demand. Pioneer asseverates that there existed a total constructive loss so that it had to pay WG&A the full amount of the insurance coverage and, by operation of law, it was entitled to be subrogated to the rights of WG&A to claim the amount of the loss. KCSI counters that a total constructive loss was not adequately proven by Pioneer, and that there is no proof of payment of the insurance proceeds. ISSUE: Whether or not there was total constructive loss RULING: Yes, there was total constructive loss. In marine insurance, a constructive total loss occurs under any of the conditions set forth in Section 139 of the Insurance Code, which provides: “a person insured by a contract of marine insurance may abandon the thing insured, or any particular portion hereof separately valued by the policy, or otherwise separately insured, and recover for a total loss thereof, when the cause of the loss is a peril insured against: (a) If more than three-fourths thereof in value is actually lost, or would have to be expended to recover it from the peril; (b) If it is injured to such an extent as to reduce its value more than three-fourths; x x x....