FACTS
In 1992, William Lines, Inc. brought its vessel, M/V Manila City, to the Cebu Shipyard for annual dry-docking and repair. M/V Manila after subject vessel was transferred to the docking quay, it caught fire and sank, resulting to its eventual total loss. At the time of the unfortunate occurrence, the vessel was insured with Prudential for P45,000,000.00 pesos for hull and machinery.
William Lines, Inc. filed a complaint for damages against Cebu Shipyard, alleging that the fire which broke out in M/V Manila City was caused by CSEW’s negligence and lack of care. Prudential Insurance was impleaded in the complaint after it paid William Lines, Inc. the value of the hull and machinery insurance on the M/V Manila City.