Mayer Steel Pipe Corporation v. Court of Appeals

Summary

This Supreme Court case involved an insurance indemnity claim for damaged steel pipes and fittings. Mayer Steel Pipe Corporation manufactured goods for Hongkong Government Supplies Department and insured them under 'all risks' policies with South Sea Surety and Charter Insurance. When substantial damage was discovered upon arrival in Hongkong, the insurers refused full payment claiming factory defects. The trial court ruled for petitioners, but the Court of Appeals dismissed the case as prescribed under the Carriage of Goods by Sea Act's one-year limitation. The Supreme Court reversed, holding that the one-year prescription applies only to claims against carriers, not insurers. Insurer liability is based on the insurance contract and prescribes in ten years under Civil Code Article 1144. The decision clarified the distinction between carrier liability under carriage law and insurer liability under insurance contracts, reinstating the trial court's award.