Commercial Law, 2011 Bar — Question 89

MULTIPLE CHOICE

X Shipping, Co., insured its vessel MV Don Teodoro for Php100 Million with ABC Insurance, Co. through T, an agent of X Shipping. During a voyage, the vessel accidentally caught fire and suffered damages estimated at Php80 Million. T personally informed ABC Insurance that X Shipping was abandoning the ship. Later, ABC insurance denied X Shipping's claim for loss on the ground that a notice of abandonment through its agent was improper. Is ABC Insurance right? A) Yes, since X Shipping should have ratified its agent’s action. B) No, since T, as agent of X Shipping who procured the insurance, can also give notice of abandonment for his principal. C) Yes, since only the agent of X Shipping relayed the fact of abandonment. D) No, since in the first place, the damage was more than 3/4 of the ship’s value.

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