G.R. No. 10056 - Song Fo vs. Oria

Contract of sale and payment terms
Song Fo & Co. (plaintiff and appellant) sold a launch to Manuel Oria (defendant and appellant).
The purchase price was P16,500.
Payment was payable in quarterly installments of P1,000, together with interest at ten per centum per annum.
The launch was delivered to Oria in Manila.
The launch was shipped for Oria’s place of business in Samar.

Loss of the vessel and failure to pay
The launch was shipwrecked while en route to Samar and became a total loss.
No part of the purchase price was ever paid.
Song Fo & Co. instituted an action to recover the total amount of the purchase price with interest until paid.

Trial court judgment and appeals
The trial court rendered judgment in favor of the plaintiff for P6,000 and interest.
The P6,000 represented the amount of the unpaid installments due under the express terms of the contract at the date the complaint was filed.
The trial court declined to enter judgment for the balance of the indebtedness on the ground that, under the express terms of the contract, it was not yet due and payable when the complaint was filed.
Both parties appealed and the record came before the appellate court on the perfected bills of exceptions.

Defendant’s theory on his appeal (insurance)
Oria contended that, under the terms of the deed of sale, Song Fo & Co. had obligated themselves to insure the launch.
Oria argued that because Song Fo & Co. failed and neglected to insure, Oria should suffer the loss resulting from the shipwreck.
Oria maintained that this failure furnished a defense that should r...(Subscriber-Only)

Whether Song Fo & Co. was contractually obligated to insure the launch such that its failure would reduce or defeat Oria’s obligation to pay the purchase price
Whether the deed of sale expressly imposed an imperative obligation on Song Fo & Co. to insure and keep the launch insured.
If the deed did not expressly require insurance, whether Song Fo & Co. nonetheless owed a duty to insure “under all the circumstances.”
Whether the evidence showed that Song Fo & Co. made reasonable measures or bona fide attempts to insure, and whether they were responsible for the loss.

Whether Song Fo & Co. was entitled to recover not only installments due at the time of filing but also installments that had not yet matured under the contract
Whether Article 1125 governed only the installments due at the date of filing.
Whether the related Article 1129 applied so that the debtor lost the...(Subscriber-Only)