Societe Francaise Des Colloides loaded cargoes insured by respondent New India Assurance Company, Ltd. In HK consigned in favor of General Textil. The cargo was transferred to M/V P. Aboitiz for transshipment to Manila. The vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, its hull leaked causing the vessel sank, but the captain and his crew were saved.
Petitioner notified the consignee, General Textile, of the total loss of the vessel and all of its cargoes. General Textile, lodged a claim with respondent for the amount of its loss. Respondent hired a surveyor to investigate the cause of the sinking. In its report, the surveyor concluded that the cause was the flooding of the holds brought about by the vessel’s questionable seaworthiness.
Respondent filed a complaint for damages against petitioner Aboitiz, Franco-Belgian Services and the latter’s local agent, F.E. Zuellig, Inc. (Zuellig) alleged that the proximate cause of the loss of the shipment was the fault or negligence of the master and crew of the vessel, its unseaworthiness, and the failure of defendants therein to exercise extraordinary diligence in the transport of the goods.