G.R. No. 26247, March 18, 1927
JUAN YSMAEL & CO., INC., plaintiff-appellant, vs. NAGEEB T. HASHIM and AFIFE ABDO CHEYBAN GORAYEB, defendants. AFIFE ABDO CHEYBAN GORAYEB, appellant.

FACTS

Juan Ysmael & Co., Inc. (plaintiff) filed a complaint against spouses Nageeb T. Hashim and Afife Abdo Cheyban Gorayeb (defendants) for two causes of action: (1) to recover the unpaid balance of a chattel mortgage debt executed by Hashim in 1916, and (2) to collect an assigned credit originally owed by Hashim to Hashim Commercial & Trading Co., Ltd., which the plaintiff claimed was assigned to it. The defendant Hashim admitted the allegations, while Gorayeb denied them and alleged a conspiracy to defraud her of alimony. The trial court rendered judgment in favor of the plaintiff for the first cause of action but dismissed the second cause of action, finding that the credit had been assigned to Asia Banking Corporation, not to the plaintiff. Both the plaintiff and Gorayeb appealed.

ISSUES:
1. Whether the trial court erred in dismissing the second cause of action for lack of a valid assignment of the credit to the plaintiff.
2. Whether the trial court erred in not allowing Gorayeb to present evidence on her special defense of conspiracy.
3. Whether the trial court erred in excluding prior testimony of witnesses for impeachment purposes without laying a proper foundation.
4. Whether the amount awarded under the first cause of action should be reduced.

RULING

1. No, the trial court did not err in dismissing the second cause of action. The Supreme Court held that no formal assignment of the credit was made to the plaintiff. The resolution of October 3, 1921, authorizing an assignment to the plaintiff, was effectively revoked by a subsequent resolution dated November 2, 1921, which ratified an assignment to Asia Banking Corporation. Under applicable laws (Article 51 of the Code of Commerce, Article 1280 of the Civil Code, and Section 335 of the Code of Civil Procedure), a formal written assignment is required for credits exceeding P300. The plaintiff, not being the formal assignee, could not maintain an action to collect the debt.

2. No, the trial court did not err in disallowing evidence on conspiracy. The Supreme Court found that the offer of prior testimony from witnesses in an earlier case was for impeachment purposes. However, the defendant-appellant failed to lay the necessary foundation by first calling the witnesses’ attention to their prior statements during cross-examination to allow them an opportunity to explain. Thus, the exclusion was proper.

3. The amount awarded under the first cause of action was modified. The Supreme Court found the oral evidence unreliable and limited recovery to the amount shown in the plaintiff’s ledger as of December 31, 1924, which was P12,238.02. The Court reasoned that the chattel mortgage debt had merged into this book account and that the plaintiff’s failure to include interest in its year-end balances suggested no agreement for interest on the book account beyond the ledger amount.

DISPOSITIVE PORTION:
The judgment was modified by reducing the plaintiff’s recovery to P12,238.02, with legal interest at 6% per annum from January 13, 1925 (the filing date of the complaint). In all other respects, the judgment was affirmed. No costs were awarded.