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Petitioner CSEW was also insured by Prudential for third party liability
under a Shiprepairer's Legal Liability Insurance Policy. The policy was
for P10 million only, under the limited liability clause, to wit:
7. Limit of Liability
The limit of liability under this insurance, in respect of
any one accident or series of accidents, arising out of
one occurrence, shall be [P10 million], including
liability for costs and expense which are either:
(a) incurred with the written consent of the
underwriters hereon, or
(b) awarded against the Assured. 3
On February 5, 1991, William Lines, Inc. brought its vessel, M/V Manila
City, to the Cebu Shipyard in Lapulapu City for annual dry-docking and
repair.
On February 6, 1991, an arrival conference was held between
representatives of William Lines, Inc. and CSEW to discuss the work to
be undertaken on the M/V Manila City.
The contracts, denominated as Work Orders, were signed thereafter,
with the following stipulations:
10. The Contractor shall replace at its own work and
at its own cost any work or material which can be
shown to be defective and which is communicated in
writing within one (1) month of redelivery of the
vessel or if the vessel was not in the Contractor's
Possession, the withdrawal of the Contractor's
workmen, or at its option to pay a sum equal to the
On February 21, 1991, William Lines, Inc. filed a complaint for damages
against CSEW, alleging that the fire which broke out in M/V Manila City
was caused by CSEW's negligence and lack of care.
7. To pay unto plaintiff, William Lines, Inc. the amount of Ten Million
(P10,000.000.00) Pesos in attorney's fees; and to pay the costs of
this suit.
On June 10, 1994, the trial court a quo came out with a judgment
against CSEW, disposing as follows:
On July 31, 1996, the Court of Appeals ordered the partial dismissal of
the case insofar as CSEW and William Lines were concerned.
agency charged with negligence, as found by the trial court and the
Court of Appeals and as shown by the records, is the herein petitioner,
Cebu Shipyard and Engineering Works, Inc., which had control over
subject vessel when it was docketed for annual repairs. So also, as
found by the regional trial court, "other responsible causes, including
the conduct of the plaintiff, and third persons, are sufficiently eliminated
by the evidence. 11
What is more, in the present case the trial court found direct evidence
to prove that the workers and/or employees of CSEW were remiss in
their duty of exercising due diligence in the care of subject vessel. The
direct evidence substantiates the conclusion that CSEW was really
negligent. Thus, even without applying the doctrine of res ipsa loquitur,
in light of the direct evidence on record, the ineluctable conclusion is
that the petitioner, Cebu Shipyard and Engineering Works, Inc., was
negligent and consequently liable for damages to the respondent,
William Lines, Inc.
Neither is there tenability in the contention of petitioner that the Court of
Appeals erroneously ruled on the inadmissibility of the expert
testimonies it (petitioner) introduced on the probable cause and origin
of the fire. Petitioner maintains that the Court of Appeals erred in
disregarding the testimonies of the fire experts, Messrs. David Grey and
Gregory Michael Southeard, who testified on the probable origin of the
fire in M/V Manila City. Petitioner avers that since the said fire experts
were one in their opinion that the fire did not originate in the area of
Tank Top No. 12 where the JNB workers were doing hotworks but on
the crew accommodation cabins on the portside No. 2 deck, the trial
court and the Court of Appeals should have given weight to such finding
based on the testimonies of fire experts; petitioner argues.
But courts are not bound by the testimonies of expert witnesses.
Although they may have probative value, reception in evidence of
expert testimonies is within the discretion of the court. Section 49, Rule
130 of the Revised Rules of Court, provides:
Sec. 49. Opinion of expert witness. The opinion of
a witness on a matter requiring special knowledge,
skill, experience or training which he is shown to
possess, may be received in evidence.
The word "may" signifies that the use of opinion of an expert
witness as evidence is a prerogative of the courts. It is never
mandatory for judges to give substantial weight to expert
testimonies. If from the facts and evidence on record, a
conclusion is readily ascertainable, there is no need for the