On  the 13th of July, 1908, the plaintiff commenced an action against the defendant to recover the sum of P9,841.50, the amount due, deducting the salvage, upon the following fire insurance policy issued by the defendant to the plaintiff:

"[Fire policy No. 3007499.]

"This policy of insurance witnesseth, that E. M. Bachraeh, esq., Manila (hereinafter  called the insured), having paid to the undersigned, as authorized agent of the British American Assurance Company (hereinafter called the company), the sum of two thousand pesos Philippine currency, for insuring against loss or damage by fire, as hereinafter mentioned, the property hereinafter described, in the sum of several sums following, viz:

"Ten thousand  pesos Philippine currency, on  goods, belonging  to a general furniture  store, such  as iron and brass  bedsteads, toilet  tables, chairs, ice boxes, bureaus, washstands,  mirrors, and  sea-grass furniture (in accordance with warranty  'D' of the tariff attached hereto) the property  of  the assured, in  trust, on commission or for which  he is responsible, whilst stored in the ground  floor and first story of house and dwelling No. 16 Calle Martinez, district 3, block 70, Manila, built, ground floor of stone and or brick, first story of hard wood and roofed with galvanized iron - bounded  in  the front by the said calle, on one side by Calle David and on the other two sides by buildings of similar construction and occupation.

"Co-insurances allowed,  particulars of which  to be declared in the event of loss or claim.

"The company hereby agrees with the insured  (but subject to the conditions on  the back hereof,  which are  to be taken  as  a  part of  this  policy) that  if the property above described, or any part  thereof,  shall be destroyed or damaged  by fire,  at any  time between the  21st day  of February, 1908, and 4 o'clock in the afternoon of the  21st day  of February, 1909, or  (in case of the renewal of this policy)  at any  time afterwards,  so long  as,  and during the period in respect of which the insured shall have paid to the company, and they shall have  accepted, the sum required for the renewal  of this policy, the company will, out of their capital stock, and funds, pay or make good to the insured the value of the property so destroyed, or the amount of such damage  thereto, to any amount not exceeding, in respect of each or any  of the several matters above specified, the sum set opposite thereto,  respectively, and  not exceeding" in the whole  the sum of ten thousand pesos, and also not exceeding,  in any case, the amount of the insurable interest therein  of the insured  at the time of the happening of such fire.

"In witness  whereof, the British American Assurance Company has caused  these presents  to be signed this 21st day of February, in the year of our Lord 1908.

"For the company.

"W. F. STEVENSON &  CO., LTD.,

"By........................................
       "Manager Agents."

And indorsed on the back the following:

"The within policy covers and includes a 'Calalac' automobile to the extent of (P1,250) twelve hundred and fifty pesos Philippine currency.

"Memo: Permission is hereby granted for the use of gasoline not to  exceed  10 gallons  for the  above  automobile, but only whilst contained in the  reservoir of the car.  It is further warranted that the car  be  neither  filled nor emptied in the  within-described building or this policy be null and void.

"Manila, 27th February,  1908.

"W. F. STEVENSON & CO., LTD.,

"By.........................................,
       "Manager Agents."

The defendant answered the complaint, admitting some of the facts alleged by the plaintiff and  denying others. The defendant  also alleged certain  facts under which  it claimed that it was released from all obligations whatever under said policy.  These special facts are as follows:

First.  That the plaintiff maintained a paint and varnish shop in  the said building where the goods which  were insured were stored.

Second. That the plaintiff transferred his interest in and to the property covered by the policy to H. W. Peabody & Co. to secure certain indebtedness due  and owing to said company, and  also that the plaintiff had  transferred his interest in certain of the goods covered by the said policy to one Macke, to secure certain obligations  assumed by the said Macke for and  on behalf  of the insured.   That the sanction of the said  defendant had  not been obtained by the plaintiff, as required by the said policy.

Third. That the plaintiff, on the 18th of April, 1908, and immediately preceding the outbreak of the alleged fire, willfully placed a gasoline can containing 10 gallons of gasoline in the upper story of said building  in close  proximity to a portion of said goods, wares, and merchandise, which can was so placed by the plaintiff as to permit the gasoline to run on the floor of said second story, and after so placing said gasoline, he, the  plaintiff, placed in close proximity to said escaping gasoline  a lighted lamp containing alcohol, thereby greatly increasing the risk of fire.

Fourth. That the plaintiff  made no  proof of the loss within the time required by condition five of said policy, nor  did the  insured  file  a statement with the municipal or any other judge or  court of the goods alleged to have been in said building at the time  of the alleged  fire, nor of the goods saved, nor the loss suffered.

The plaintiff, after denying nearly all of  the  facts set out in the special answer of the  defendant, alleged:

First. That he had been acquitted in a criminal action against him, after a  trial  duly and regularly had, upon  a charge of arson, based upon the  same alleged facts set out in the answer of the defendant.

Second. That he had  made no proof of the loss set up in his complaint  for  the reason that immediately after  he had, on the 20th of April, 1908,  given  the  defendant due notice in  writing of said  loss, the defendant, on the 21st of  April,  1908 and  thereafter on  other occasions, had waived all right to require proof of said loss by denying all  liability under the policy  and by declaring said  policy to be null and void.

After hearing the evidence adduced during the trial of the cause, the  lower court found that the defendant was liable  to  the  plaintiff and rendered  a  judgment against the defendant for the sum of P9,841.50, with interest for a period  of one year at  6  per cent, making a total  of P10,431.99, with costs.

From that decision the defendant appealed and made the following assignments of error:

1. The  court erred in  failing to hold that  the  use of the building, No. 16 Calle Martinez, as a paint and varnish shop annulled the policy  of insurance.
   
   
2. The court erred in failing to hold that the execution of the chattel mortgages  without the knowledge  and consent of the insurance company  and without receiving the sanction of said company annulled the policy of insurance.
   
   
3. The court erred in holding that the keeping of gasoline and alcohol not in  bottles in the building No.  16 Calle Martinez  was not such a violation of the conditions of the policy as to render the same null and void.
   
   
4. The court erred in failing to find as a fact that  E. M. Bachrach, the insured, willfully placed a gasoline can containing about 10 gallons  of  gasoline in the  upper story of said building, No. 16  Calle Martinez,  in close  proximity to a portion of the goods, wares, and merchandise stored therein, and that said  can  was so placed by said Bachrach as to permit the gasoline to run on the floor of said second story.
   
   
5. The court erred in failing to find as a fact that  E. M. Bachrach, after placing said gasoline can in close  proximity to the  goods, wares, and  merchandise covered by  the policy of insurance, that he (Bachrach) placed in close proximity to said escaping gasoline a lighted lamp containing alcohol, thereby greatly increasing the risk of fire.
   
   
6. The court erred in holding that the policy of insurance was in force at the  time of said fire, and that the. acts or omissions on the part of the insured which caused, or tended to cause, the forfeiture of the policy, were waived by the defendant.
   
   
7. The court erred in holding the defendant liable for the loss under the policy.
   
   
8. The  court  erred in refusing to deduct  from  the loss sustained by Bachrach the value of the automobile, which was saved without damage.
   
   
9. The court erred in refusing to grant the motion for a new trial.
   
   
10. The court erred  in  refusing to  enter  judgment in favor of the defendant and against the  plaintiff.

With reference to the first above assignment of error, the lower court in its decision said:

"It is claimed that either gasoline or  alcohol was  kept in violation of  the policy in  the  bodega containing the insured property.   The testimony on this point is somewhat conflicting,  but conceding all of the  defendanl's claims, the construction given  to  this claim by  American courts would not justify the forfeiture of the policy on that ground. The property insured  consisted  mainly of household furniture  kept for  the  purpose  of sale.  The preservation of the furniture in a salable condition by retouching or otherwise was  incidental  to the business.  The evidence offered by  the plaintiff is to the effect  that alcohol  was  used in preparing varnish for the purpose of retouching, though he also says that the alcohol was kept in the store  and not in the bodega where the furniture was.  It is well settled that the keeping of  inflammable  oils on the premises, though prohibited by the policy, does not void it if such keeping is incidental to the business.   Thus, where a furniture factory keeps benzine for the  purposes of operation  (Davis vs. Pioneer Furniture Company, 78 N. W. Rep., 596; Faust vs. American Fire Insurance Company, 91 Wis., 158),  or where it is used for cleaning1 machinery  (Mears vs. Humboldt Insurance  Company, 92 Pa. St., 15;  37 Am. Rep., 647), the insurer can not on that ground avoid payment of a loss, though the keeping of the benzine on the premises is expressly prohibited.  These authorities also appear sufficient to answer the objection that the insured automobile contained gasoline and that the plaintiff on one occasion was seen in the  bodega with a lighted  lamp.  The first was incidental to the use of the insured article and ths second being a single  instance falls within the doctrine  of the case last cited."

It may  be  added that  there was  no  provision  in the policy prohibiting the keeping of paints and  varnishes upon the premises where the insured  property was  stored. If the company intended to  rely upon a  condition of that character,  it ought to have  been plainly expressed  in the policy.

With reference to the second above  assignment of error, the defendant and appellant  contends  that the lower court erred in failing to hold that the execution of  the  said chattel mortgage, without the knowledge and consent  of the insurance  company and without receiving the sanction of said company, annulled the said policy of insurance.

With reference to this assignment of error, upon reading the policy  of  insurance issued  by the  defendant  to the plaintiff, it will be noted that there is  no  provision in said policy prohibiting the plaintiff  from  placing a  mortgage upon the property  insured, but,  admitting  that  such  a provision was intended, we think the lower court has completely answered this contention of the  defendant.   He said, in passing upon this question as it was presented:

"It is claimed  that the execution of a  chattel  mortgage on the insured  property violated what is known  as the 'alienation clause,' which is now found  in most policies, and which is expressed in the policies  involved in cases 6496 and 6497 by a phrase imposing forfeiture if the interest in the property  pass from the insured.   (Cases 6496 and 6497, in which  are involved other actions  against  other insurance companies for the same loss as in the present action.)

"This clause has been the subject of a vast number  of judicial decisions  (13 Am. & Eng. Encyc. of Law, 2d ed., pp. 239 et seq.),  and it is  held  by the great weight  of authority  that the interest in property  insured  does not pass by the mere execution of a chattel mortgage and that while a chattel mortgage is a conditional sale, there is no alienation within the meaning of the  insurance law until the mortgagee acquires  a right to take possession by  default under the terms  of the mortgage.  No such  right is claimed to have accrued  in the case at  bar, and  the alienation clause is therefore inapplicable."

With reference  to the third assignment of error  above noted, upon a reading of the decision of the lower court it will  be found that there is nothing in  the decision of  the lower court relating to the facts stated in this assignment of error,  neither is there any provision in  the policy  relating to the facts alleged in said assignment of error.

Assignments of error  numbers 4 and 5 above noted may be considered together.

The record discloses that some time prior to the commencement of this present action, a criminal action was commenced against the plaintiff herein in the Court of  First Instance of the city of Manila, in which he was charged with willfully and  maliciously  burning the property covered by the policy in the present case.  At the conclusion of the criminal action and  after hearing the evidence adduced  during the trial, the lower court, with the assistance of two assessors, found that the evidence was insufficient to show beyond peradventure of doubt that the  defendant  was guilty of the crime.  The evidence adduced during the  trial of the criminal cause was introduced as evidence  in the present cause.  While  the evidence shows some very peculiar and suspicious circumstances concerning the. burning of the goods covered  by the said policy, yet, nevertheless, in view of the findings of the lower  court  and in view  of  the apparent conflict in the testimony, we can not find that there is a preponderance of evidence showing that the plaintiff did actually set fire or cause fire to be set to the goods in quesion.   The lower court, in discussing this question, said:

"As to the claim that the loss occurred through the voluntary act of the insured, we consider it unnecessary to review the evidence in detail. That was done by another branch of this court in disposing of the criminal prosecution brought against the insured, on the same ground,  based mainly on the same evidence.  And regardless of whether or not the judgment in that proceeding is res adjudicata as to anything here, we are  at  least of  the  opinion that the evidence to establish this  defense should not be materially  less convincing than that required in order to convict the insured of the crime of arson.  (Turtell vs. Beamount, 25 Rev. Rep., 644.)  In order to find that the defense of incendiarism was established here, we would be obliged, therefore, in effect to set aside the findings of the  judge and assessors in the criminal cause, and this we would be loath to do even though the evidence now produced were much stronger than it is."

With reference to the  sixth  assignment of error above noted, to wit: That the court erred in holding that the policy of insurance was in force at the time of said fire and that the acts or omissions on the part of the insured which caused or tended to cause a forfeiture of the policy were waived by the defendant, the lower court, in discussing this question, said:

"Regardless of the question whether the plaintiff's letter i)f April 20 (Exhibit B) was a sufficient compliance with the requirement that he furnish notice of loss, the fact remains that on the following day the insurers replied by a letter (Exhibit C)  declaring that the 'policies were null and void,' and in effect  denying liabilty.  It is  well  settled by a preponderance of authorities that such a denial is a waiver of notice of loss, because if the 'policies are null and void,' the furnishing of such notice would be vain and useless.  (13 Am. & Eng. Encyc. of Law, 347, 348, 349.)  Besides, 'immediate notice' is construed to mean only within a reasonable time.

"Much the same may be said as to the objection that the insured failed to furnish to the insurers his books and papers or to present a  detailed statement to the 'juez municipal,' in accordance with article 404 of the Code of Commerce. The  last-named  provision is similar to one appearing in many American policies requiring a certificate from a magistrate nearest the loss regarding the circumstances thereof. A denial of liability on other grounds waives this requirement (O'Niel vs. Buffalo Fire Insurance Company, 3 N. Y., 122; Peoria Marine Ins. Co. vs. Whitehill, 25 111.,  382), as well  as that relating to the production of books and papers (Ga. Home  Ins.  Co.  vs. Goode & Co., 95 Va., 751; 66 Jur. Civ., 16).  Besides, the insured might have had difficulty in attempting to comply with this clause, for there is no longer an official here with the title of 'juez municipal.' "

Besides the foregoing reasons, it may be added that there was  no requirement  in the  policy in question that such notice be given.

With reference to the assignments of error numbers 7, 9, and  10, they are too  general in their  character to merit consideration.

With reference to the eighth  assignment of  error above noted, the defendant and  appellant  contends  that he was entitled to have the amount of his  responsibility reduced by the full value (P1,250) of the said automobile.

It does not positively appear of record that the automobile in question  was  not included in  the other policies.   It does appear that the automobile was saved and was considered as a part of the salvage.  It  is  alleged  that  the salvage amounted to P4,000, including the automobile.  This amount (P4,000)  was distributed among the different insurers and the amount of their responsibility was  proportionately reduced.  The defendant and appellant in  the present  case made no objection at any time  in the lower court to that distribution of the salvage.  The claim is now made for the first time.  No reason is given why the objection was  not made at the time of the distribution of the salvage, including the automobile, among all of the insurers.   The lower court had no opportunity to pass upon the question now presented for the first time.   The defendant  stood  by and allowed the other insurers to share in the salvage,  which he  claims now wholly belonged to him.   We think it is now too late to raise the question.

For all of the foregoing reasons, we are of the opinion that the judgment of the lower court should be affirmed, and it is hereby ordered that judgment be entered against the defendant and in  favor of the plaintiff for  the sum  of  P9,841,50, with  interest at  the rate of 6 per cent from the 13th  of July, 1908,  with costs.  So ordered.

Arellano, C. J., and Torres, J., concur.

Trent, J., concurs in the result.

Moreland, J., dissents.