Philippine Home Assurance Corporation v. Court of Appeals

Summary

This case involves a maritime insurance dispute where Eastern Shipping Lines' vessel SS Eastern Explorer caught fire off Okinawa due to an exploding acetylene cylinder, becoming a constructive total loss. After salvage operations, ESLI charged consignees additional freight and salvage charges, which Philippine Home Assurance Corporation paid under protest as their insurer. PHAC sued for recovery, but lower courts ruled in favor of ESLI, finding the fire was a natural calamity and the charges were valid. The Supreme Court reversed, holding that fire cannot be deemed a natural disaster when caused by human negligence. The Court found ESLI negligent in storing the highly inflammable acetylene cylinder near the engine room in the accommodation area, creating foreseeable danger. The Court also ruled that certain documentary evidence was inadmissible hearsay and that the expenses did not constitute general average due to procedural non-compliance. ESLI was ordered to refund the amounts paid under protest.