CHIN GUAN, PLAINTIFF AND APPELLEE, VS. COMPAÑIA MARITIMA, DEFENDANT AND APPELLANT.

The steamship Corregidor
was sunk as a result of a collision. An action was instituted by Chin
Guan against the Compañia Maritima, owner of the steamship Cebu, which caused the collision, to recover the value of sixty sacks of flour loaded on the Corregidor.
Judgment having been rendered against the defendant in the amount of
P181 with legal interest from the filing of the complaint, it now
appeals to this court to have said judgment reversed.

Appellant, in its brief, says that “no question of fact is involved in
this case. The appeal has been interposed because we honestly believe
and maintain that a rule of law has been violated. This being so, its
cognizance lies within the jurisdiction of the Supreme Court in
accordance with clause 6 of section 138 of Commonwealth Act No. 3.”

The statement of facts in the decision appealed from which appellant admits as correct and sufficient, is as follows:

“* * * On July 3, 1933 the agent consignee of plaintiff in the City of Manila, Ong Ang Chuan, loaded on the steamship Corregidor
for the port of Calivo, Province of Capiz, sixty (60) sacks of ‘Anchor’
flour valued at P181, belonging to plaintiff and consigned to him. On
the 5th of the same month, the steamship Corregidor, under
the command of its captain, defendant Arcadio Castisima, left the port
of Manila for that of Calivo, Province of Capiz, and other southern
ports, bringing on board; with other cargo, the sixty (60) sacks of
flour aforementioned. On the night of July 5, 1933, while the Corregidor was navigating in the waters of Manila Bay, it collided with the steamship Cebu, which is also owned by the defendant company. As a result of the collision, the Corregidor
sank with all its cargo, including the sixty (60) sacks of flour
belonging to plaintiff. Defendants Compañia Maritima and Arcadio
Castisima refused to pay plaintiff the value of the aforesaid sixty
(60) sacks of flour in spite of plaintiff’s demands.

“By reason of the collision between the steamships Cebu and Corregidor,
the Bureau of Customs conducted an investigation which resulted in said
office finding the officers of both ships responsible for the
collision. Later, the Department of Finance to which the resolution of
the Bureau of Customs was appealed, modified it in the sense of
exonerating, as it did exonerate, the captain of the steamship Cebu.”

Appellant contends that even on the theory that the total loss of the steamship Corregidor
with all its cargo was due to the fault of the captain, still it is not
responsible for the loss of the sacks of flour belonging to plaintiff
for the reason that according to article 837 of the Code of Commerce
“the civil liability contracted by the ship-owners in the cases
prescribed in this section, shall be understood as limited to the value of the vessel with all her appurtenances and all the freight earned.” (Italic ours.) And the Corregidor having been totally lost, the appellant’s liability has been extinguished.

However, in accordance with the foregoing legal provision, it was held in the case of G. Urrutia & Co. vs. Baco River Plantation Co. (26 Phil., 632, 646), that:

“While it was held in the case of Philippine Shipping Co. vs.
Vergara (6 Phil. Rep., 281), that, in accordance with articles 837 and
826 of the Code of Commerce, the defendant in an action such as the one
at bar cannot be held responsible in damages when the ship causing the
injury was wholly lost by reason of the accident, we do not apply it in this case for the reason that the vessel lost was insured and that the defendant collected the insurance.
That being the case, the insurance money substitutes the vessel and
must be used, so far as necessary, to pay the judgment rendered in this
case.” (Italic ours.)

Appellee,
nevertheless, contends that even granting but without admitting the
theory of appellant that its liability has been extinguished by reason
of the sinking of the steamship Corregidor, it remains bound to pay the claim of appellee from the freights earned by said ship on its voyage.

The decision of this court in the case of G. Urrutia & Co. vs.
Baco River Plantation Company, aforecited, does not in any way sustain
the pretension of appellee. In that case it was held that in accordance
with the provisions of articles 837 and 826 of the Code of Commerce,
the ship-owner is not liable in damages when the ship responsible for
the collision has been totally lost. In such case, the amount of the
insurance substitutes for the value of the ship and should be applied
to the payment of the judgment rendered in favor of plaintiff. If the
ship was not insured, then the freights earned shall answer for the
civil liability of the ship-owner according to article 837.

The judgment appealed from is reversed without prejudice to the right
of the plaintiff to obtain payment of the value of the sixty (60) sacks
of flour with legal interest from the amount of the insurance of the Corregidor, if it was insured; otherwise, from the freights earned during the voyage. Without pronouncement as to costs.

Avanceña, C. J., Villa-Real, Imperial, Diaz, and Laurel, JJ., concur.