ASIA BANKING CORPORATION, PLAINTIFF AND APPELLEE, VS. LACSON COMPANY, INC., DEFENDANT AND APPELLANT.

This is an appeal taken by Lacson Company, Inc., from the judgment of
the Court of First Instance of Manila sentencing it to pay the Asia
Banking Corporation the sum of P45,489.83, with the costs.

The transcript of the stenographic notes of the oral testimony taken
during the trial was not forwarded to this court. In view of this
omission on the part of the appellant company we are compelled to abide
by the findings of fact made by the trial court in its judgment. And to
the conclusions of law derived from the findings of fact which we find
correct, we have to add only that in the case of Bank of the Philippine
Islands vs. Herridge (47 Phil., 57), this court, speaking through Mr. Justice Ostrand, said:

“CLAIMS OF THE BANK OF THE PHILIPPINE ISLANDS AND THE

GUARANTY TRUST COMPANY OF NEW YORK

* * * * * * *

“On
November 16, 1920, De Poli executed and delivered to said bank a
chattel mortgage on the same property described in the receipts, in
which chattel mortgage no mention was made of the warehouse receipts.
This mortgage was registered in the Office of the Register of Deeds of
Manila on November 18, 1920.

“The appellants argue that the
obligations created by the warehouse receipts were extinguished by the
chattel mortgage and that the validity of the claim must be determined
by the provisions of the Chattel Mortgage Law and not by those of the
Warehouse Receipts Act, or, in other words, that the chattel mortgage
constituted a novation of the contract between the parties.

“Novations
are never presumed and must be clearly proven. There is no evidence
whatever in the record to show that a novation was intended, The
chattel mortgage was evidently taken as additional security for the
funds advanced by the bank and the transaction was probably brought
about through a misconception of the relative values of warehouse
receipts and chattel mortgages. As the warehouse receipts transferred
the title to the goods to the bank, the chattel mortgage was both
unnecessary and inefficatious and may be properly disregarded.”

In that case all the warehouse receipts were endorsed to the bank.
Later on, De Poli mortgaged the merchandise covered by said receipts to
secure the debt for which said receipts were endorsed, without making
any mention of the aforesaid receipts.

In the instant case
the merchandise mortgaged is almost all the merchandise covered by the
eleven drafts, in the amount of which the defendant company is
indebted. So that the merchandise mortgaged to the plaintiff
corporation belongs to itself, and not to the defendant company. If the
merchandise belonging to the debtor which was mortgaged to the
creditor, as in the U. de Poli case, cannot constitute novation, much
less can a chattel mortgage of the merchandise belonging to the same
creditor constitute a novation, because the chattel mortgage in
question did not secure the payment of a debt, but the payment of the
value of the merchandise mortgaged in case of sale, and the integrity
thereof while the sale was not effected.

For the foregoing
reasons, and not finding any error in the judgment appealed from, the
same is hereby affirmed in all its parts with the costs against the
appellant. So ordered.

Street, Malcolm, Ostrand, Johns, and Romualdez, JJ., concur.
Avanceña, C. J., and Johnson, J., did not take part.