G.R. No. L-10056, December 24, 1915
SONG FO & CO., plaintiff-appellant, vs. MANUEL ORIA, defendant-appellant.

FACTS:
Song Fo & Co. sold a launch to Manuel Oria for P16,500, payable in quarterly installments of P1,000 with 10% annual interest. The launch was delivered in Manila but was shipwrecked and became a total loss en route to Oria’s place of business in Samar. No part of the purchase price had been paid. Song Fo & Co. filed an action to recover the total purchase price with interest. The trial court rendered judgment in favor of Song Fo & Co. only for P6,000 (the unpaid installments due at the time of filing), refusing to award the balance on the ground that it was not yet due under the contract. Both parties appealed.

The defendant (Oria) contended that under the deed of sale, Song Fo & Co. had obligated themselves to insure the launch, and their failure to do so should absolve him from liability for the loss. The plaintiff (Song Fo & Co.) argued that they were entitled to the full purchase price because the loss of the launch, which served as security for the debt, accelerated the maturity of the entire obligation.

ISSUE:
1. Whether Song Fo & Co. had an obligation to insure the launch, and if their failure to do so relieved Oria from liability.
2. Whether the loss of the launch (the security for the debt) accelerated the maturity of the entire unpaid purchase price.

RULING:
1. On the insurance obligation: The Court held that Song Fo & Co. did not have an express or implied obligation to insure the launch at all events. The contract only authorized them to insure the launch in their own name and charge the premiums to Oria. At most, it imposed a duty to take reasonable measures a prudent person would take to insure their own property. The evidence showed that Song Fo & Co. made a bona fide attempt to secure insurance, but the launch was lost before insurance could be finalized due to the risky route and the insurer’s need to consult foreign principals. Oria, who had exclusive control of the launch, sent it to Samar knowing it was uninsured. Thus, Song Fo & Co. were not responsible for the lack of insurance, and Oria’s defense failed.

DISPOSITIVE PORTION:
The trial court’s judgment was modified. Song Fo & Co. were awarded the full purchase price of P16,500, with 10% annual interest from November 15, 1911. Costs were imposed on Oria.