The Government of the Philippine Islands vs. The Insular Maritime Co., G.R. No. L-21495, March 18,
1924
Subject: Transportation Law
FACTS
The Government of
the Philippine Islands seeks by this action to recover from The Insular
Maritime Company the sum of P30,437.91 for repairs made by the Bureau of
Commerce and Industry on the motor ship Insular.
The Insular
Maritime Company became the owner of one vessel only, the Insular, valued at
P150,000. On October 29, 1919, The Insular Maritime Company asked the Bureau of
Commerce and Industry to perform certain repairs on the Insular.
The Government
consented and terminated said repairs on November 29 of the same year.
Subsequent thereto, on April 15, 1920, the Insular suffered a total loss by fire.
The bill prepared by the chief accountant of the Bureau of Commerce and
Industry for work done on the motor ship Insular in the amount of P30,437.91,
was dated July 31, 1920. Collection of the claim was attempted pursuant to
formal demand made by the Acting Insular Auditor of date April 30, 1921.
It will thus be
noted, as was emphasized by the defense and by His Honor, the trial judge, that
no steps were taken by the Government to secure payment for the repairs until
after the loss of the vessel Insular. The trial judge further found in effect,
as a legal conclusion, that the loss of the vessel Insular extinguished the
obligation. The Attorney-General challenges the correctness of this view.
ISSUE
Whether or not the obligation
of Insular Maritime Company to pay the Bureau of Commerce and Industry for the
repairs done has been extinguished.
RULING
No. The obligation
to pay on the part of Insular Maritime Company still exists.
As a general rule,
the owners of a vessel and the vessel itself are liable for necessary repairs. Naturally,
the t destruction of the vessel extinguishes a maritime lien, as there is no
longer any res to which it can attach. But the total destruction of the vessel
does not affect the liability of the owners for repairs on the vessel completed
before its loss.
In this case, the
trial court was accordingly right in its exposition of the fact but not in its
application of the law. In Article 591 of the Code of Commerce, there is
nothing in the language to denote that the liability of the owners of a vessel
is wiped out by the loss of that vessel. While the decision in the case of
Philippine Shipping Co. vs. Garcia Vergara, supra, the facts are not the same.
There, the owners and agents of a vessel causing the loss of another vessel by
collision were held "not liable beyond the vessel itself causing the
collision," but were "not required to pay such indemnification for
the reason that the obligation thus incurred has been extinguished on account
of the loss of the thing bound for the payment thereof." In this case,
there is a contractual relation that remains unaffected by the loss of the
thing concerned in the contract and which is governed principally by the
provisions of the Civil Code. The rights and liabilities of owners of ships are
in many respects essentially the same as in the case of other owners of things.
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