In its desire to develop the full potentials of its mining claims and deposits, Filipinas Marbles Corporation (FMC) applied and was granted a loan in the amount of $5,000,000 by respondent Development Bank of the Philippines (DBP) on the conditions that the management contract will be handled by Bancom System Control and the DBP. and the loan shall be secured by a final mortgage on the assets of petitioner with a total approved vale of PhP 48,630,756. The chattel mortgage was not registered pursuant to Article 2125 of the Civil Code.
ISSUE: WON the non-registration of the mortgage will nullify the contract between the parties, considering that a mortgage contract is an accessory contract?
HELD:
The SC have to say this, we agree with the petitioner that a mortgage is a mere accessory contract, and, thus its validity would depend on the validity of the loan secured by it. We, however, reject the petitioner's argument that since the chattel mortgage involved was not registered, the same is null and void. Article 2125 of the Civil Code clearly provides that non-registration of the mortgage does not affect the immediate parties. The petitioner cannot invoke the mentioned provision to nullify the mortgage (chattel).
Showing posts with label chattel mortgage. Show all posts
Showing posts with label chattel mortgage. Show all posts
Sunday, August 21, 2016
Sunday, August 14, 2016
ONG VS. IAC, 201 SCRA 543
Madrigal Shipping Co., Inc., owner of Barge No. 601, pledged said vessel and tugboat to secure the Shipping Company's obligation to herein private respondent Solidbank in the amount of PhP 2,094,000. Both parties executed a document denominated as "Pledge Agreement".
Madrigal failed to pay its obligation to the Solidbank. When the latter was about to sell the pledge property, the same was no where to be found from its bodega. Meanwhile, on August 1, 1979, petitioner Honesto Ong bought one barge, the same barge which was the subject of the pledge from Santiago Ocampo.
Solidbank filed a complaint against Honesto Ong, et al. Petitioner contends that they are purchaser in good faith, and the contract of pledge by and between Solidbank and Madrigal Shipping Co., Inc. was not recorded under Section 804 and 809 of the Tariff and Custom Code, hence, not binding on third person like the petitioners.
Private respondent argued that petitioner acted in bad faith, and that it complied with all the requirements necessary to bind third persons.
ISSUE: WON the contract of pledge entered into by and between Solidbank and Madrigal Shipping Co., Inc. is binding to petitioner Ong?
HELD:
YES, it is binding on said petitioners. Article 2096 of the Civil Code requires that a pledge to take effect against third persons, it should be in a public instrument which must contain the description of the thing pledged and the date of the pledges. In the case at bar, all three requirements have been complied.
Madrigal failed to pay its obligation to the Solidbank. When the latter was about to sell the pledge property, the same was no where to be found from its bodega. Meanwhile, on August 1, 1979, petitioner Honesto Ong bought one barge, the same barge which was the subject of the pledge from Santiago Ocampo.
Solidbank filed a complaint against Honesto Ong, et al. Petitioner contends that they are purchaser in good faith, and the contract of pledge by and between Solidbank and Madrigal Shipping Co., Inc. was not recorded under Section 804 and 809 of the Tariff and Custom Code, hence, not binding on third person like the petitioners.
Private respondent argued that petitioner acted in bad faith, and that it complied with all the requirements necessary to bind third persons.
ISSUE: WON the contract of pledge entered into by and between Solidbank and Madrigal Shipping Co., Inc. is binding to petitioner Ong?
HELD:
YES, it is binding on said petitioners. Article 2096 of the Civil Code requires that a pledge to take effect against third persons, it should be in a public instrument which must contain the description of the thing pledged and the date of the pledges. In the case at bar, all three requirements have been complied.
Friday, August 5, 2016
Spouses Cesar San Jose and Margarita Batongbakal vs. CA, spouses Marcos and Gloria de Guzman
Petitioner-spouses filed a complaint to annul the extra-judicial foreclosure sale conducted by the Provincial Sheriff of Bulacan of the property covered by TCT no. T-159703 located in Duhat, Bocaue, Bulacan.
The land was mortgaged to private respondent spouses Marcos and Gloria de Guzman on April 14, 1972 as security for the payment of a loan of PhP 12,000. For allegedly failing to comply with the conditions of the mortgage, the private respondent extra-judicially foreclosed the said land and was sold at the sheriff's sale held on Nov. 25, 1975 with the respondent as purchasers thereof. Consequently, TCT no. T-159703 was cancelled and TCT No. T-30762(M) was issued in the name of respondent.
Petitioner spouses contend that the extra-judicial foreclosure sale was invalid or void for the following reasons:
1. The petitioner spouses were not notified of the extra-judicial foreclosure;
2. The sheriff's certificate of posting of notice was not presented;
3. There was no proof of that the newspaper in which the notice of extra-judicial foreclosure sale was made as one of the general circulation; and
4. The property mentioned in the Notice of Sheriff's sale and in the minutes of auction sale was covered by TCT No. T-169705 not by TCT No.T-159703, the title to the mortgage property subject of the foreclosure sale.
The trial court and CA upheld the validity of the foreclosure saying that although the property to be sold pursuant to the foreclosure of mortgage was indeed covered by the TCT No. T-159703 and NOT by TCT No. T-169705, the technical description, however, in the notice was the actual and correct technical description of the property.
ISSUE: WON the extra-judicial foreclosure sale complied with the requirements of ACT No. 3135 which governs the extra-judicial foreclosure of real estate mortgage?
HELD:
NO
In the Tambunting case, this Court stated that the failure to advertise a mortgage sale in compliance with statutory requirements constitute a jurisdictional defect invalidating the sale and that a substantial error or omission in a notice of sale will render the notice insufficient and transfer certificate of title of the property to be sold. This is substantial and fatal error which resulted in invalidating the entire notice. That the correct technical description appeared on the Notice of Sheriff's sale is to inform all interested parties of the date, time and place of the foreclosure sale of the real property subject thereof. Logically, this is not only requires that the correct date, time and place of the foreclosure sale appear in the notice but also that any and all interested parties be able to determine that what is about to be sold at the foreclosure sale is the real property in which they have interest. The extra-judicial Foreclosure Sale of the property of the petitioner spouses are null and void.
The land was mortgaged to private respondent spouses Marcos and Gloria de Guzman on April 14, 1972 as security for the payment of a loan of PhP 12,000. For allegedly failing to comply with the conditions of the mortgage, the private respondent extra-judicially foreclosed the said land and was sold at the sheriff's sale held on Nov. 25, 1975 with the respondent as purchasers thereof. Consequently, TCT no. T-159703 was cancelled and TCT No. T-30762(M) was issued in the name of respondent.
Petitioner spouses contend that the extra-judicial foreclosure sale was invalid or void for the following reasons:
1. The petitioner spouses were not notified of the extra-judicial foreclosure;
2. The sheriff's certificate of posting of notice was not presented;
3. There was no proof of that the newspaper in which the notice of extra-judicial foreclosure sale was made as one of the general circulation; and
4. The property mentioned in the Notice of Sheriff's sale and in the minutes of auction sale was covered by TCT No. T-169705 not by TCT No.T-159703, the title to the mortgage property subject of the foreclosure sale.
The trial court and CA upheld the validity of the foreclosure saying that although the property to be sold pursuant to the foreclosure of mortgage was indeed covered by the TCT No. T-159703 and NOT by TCT No. T-169705, the technical description, however, in the notice was the actual and correct technical description of the property.
ISSUE: WON the extra-judicial foreclosure sale complied with the requirements of ACT No. 3135 which governs the extra-judicial foreclosure of real estate mortgage?
HELD:
NO
In the Tambunting case, this Court stated that the failure to advertise a mortgage sale in compliance with statutory requirements constitute a jurisdictional defect invalidating the sale and that a substantial error or omission in a notice of sale will render the notice insufficient and transfer certificate of title of the property to be sold. This is substantial and fatal error which resulted in invalidating the entire notice. That the correct technical description appeared on the Notice of Sheriff's sale is to inform all interested parties of the date, time and place of the foreclosure sale of the real property subject thereof. Logically, this is not only requires that the correct date, time and place of the foreclosure sale appear in the notice but also that any and all interested parties be able to determine that what is about to be sold at the foreclosure sale is the real property in which they have interest. The extra-judicial Foreclosure Sale of the property of the petitioner spouses are null and void.
Monday, August 1, 2016
Roxas vs. CA and Rural Bank of Dumalag, 221 SCRA 729
Petitioner Roxas is the owner of a parcel of land located at Tanza Norte, Capiz. She obtained , thru her attorney-in-fact, an agricultural loan in the amount of PhP 2000. Real estate mortgage was executed over the subject land as security for the loan for failure to pay upon the loan's maturity, private respondent foreclosed the mortgage; subject land was sold at public auction to the bank, being the highest bidder Roxas filed a complaint for cancellation of foreclosure of mortgage an annulment of sale against private respondent claiming that the foreclosure did not comply with the notice requirements: there was failure to post notices in the barrio where the land lies. The RTC rendered judgment in favor of petitioner. However, on elevating the matter to the CA, said court reversed the decision of the trial court: section 5 of RA 720 does not require personal notification to the mortgagor in case of foreclosure and there was substantial requirement of said law.
ISSUE: WON the auction sale over the subject land is void?
HELD:
The sheriff failed to publish the notices of auction sale as required by law. Proof of publication shall be accompanied by an affidavit of the sheriff or officer conducting the foreclosure sale. In the case at bar, the sheriff merely executed a certificate of posting which is not the affidavit required by law. Also, the notices of foreclosure were posted in the municipality where the subject land was located, but not in the barrio.
It is settled doctrine, that failure to publish notice of auction sale as required by the statute constitute a jurisdictional defect which invalidates the sale. Even slight deviations therefrom are not allowed.
ISSUE: WON the auction sale over the subject land is void?
HELD:
The sheriff failed to publish the notices of auction sale as required by law. Proof of publication shall be accompanied by an affidavit of the sheriff or officer conducting the foreclosure sale. In the case at bar, the sheriff merely executed a certificate of posting which is not the affidavit required by law. Also, the notices of foreclosure were posted in the municipality where the subject land was located, but not in the barrio.
It is settled doctrine, that failure to publish notice of auction sale as required by the statute constitute a jurisdictional defect which invalidates the sale. Even slight deviations therefrom are not allowed.
Sunday, July 31, 2016
CERNA VS. CA, 220 SCRA 517
Delgado borrowed money from Leviste. As payment, he made a promissory note in favor of Leviste. To secure the note, Delgado executed a chattel mortgage over a jeep owned by him and a car owned by the Cerna (under a special power of Attorney).
Delgado defaulted. Leviste filed a collection suit against Delgado and Cerna as solidarily debtors. Cerna filed a motion against him. The motion was denied and the CA held that Delgado and Leviste are solidarily debtors.
ISSUES:
1. Is Cerna solidarily bound with the principal debtor?
2. What is the extent of the mortgagor's liability?
3. Is Cerna a co-mortgagor?
4. If Cerna as co-mortgagor, would he be liable in an action for recovery of money?
HELD:
1. NO. There is no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of another's obligation by mortgaging his own property to be solidarily bound with the principal obligor. A chattel mortgagor may be an "accessory contract" to a contract of loan, but that fact alone does not make a third party mortgagor solidarily bound with the principal debtor in fulfilling the principal obligation of paying the loan. Moreover, it is a basic precept that there is solidarily liability only when the obligation expressly so states or when the law or nature of the obligation requires solidarity.
2. A third party mortgagor becomes liable only to the extent of the property mortgaged. It is only upon default of the principal debtor that the creditor may have recourse on the mortgagor by foreclosing the mortgage properties in lieu of an action for the recovery of the amount of the loan. And the liability of the third party mortgagor extends only to the property mortgaged. Should there be any deficiency, the creditor has recourse on the principal debtor.
3. NO. The special power of attorney authorizing Delgagdo to mortgage Cerna's property as security for Delgado's obligation does not itself make Cerna a co-mortgagor, especially so since only Delgagdo signed the chattel mortgage as mortgagor. The special power of attorney did not make Cerna as mortgagor, all it did was to authorize Delgado to mortgage certain properties belonging to Cerna. And this is in compliance with the requirement in Article 2085 of the New Civil Code, It is essential in mortgage xxx (3) That the person constituting the pledge or mortgage have the free disposal of their property, and IN ABSENCE THEREOF, THAT THEY BE LEGALLY AUTHORIZED FOR THE PURPOSE. Thus, it is clear that only Delgado was the sole mortgagor regardless of the fact that he used properties belonging to a third person to secure the debt.
4. And even if Cerna was a co-mortgagor, Cerna could not be held liable because the complaint was for recovery of a sum of money and not for the foreclosure, thereby abandoning the chattel mortgage as basis for relief, he clearly manifests his lack of desire and interest to go after the mortgaged property as security for the promissory note.
Delgado defaulted. Leviste filed a collection suit against Delgado and Cerna as solidarily debtors. Cerna filed a motion against him. The motion was denied and the CA held that Delgado and Leviste are solidarily debtors.
ISSUES:
1. Is Cerna solidarily bound with the principal debtor?
2. What is the extent of the mortgagor's liability?
3. Is Cerna a co-mortgagor?
4. If Cerna as co-mortgagor, would he be liable in an action for recovery of money?
HELD:
1. NO. There is no legal provision nor jurisprudence in our jurisdiction which makes a third person who secures the fulfillment of another's obligation by mortgaging his own property to be solidarily bound with the principal obligor. A chattel mortgagor may be an "accessory contract" to a contract of loan, but that fact alone does not make a third party mortgagor solidarily bound with the principal debtor in fulfilling the principal obligation of paying the loan. Moreover, it is a basic precept that there is solidarily liability only when the obligation expressly so states or when the law or nature of the obligation requires solidarity.
2. A third party mortgagor becomes liable only to the extent of the property mortgaged. It is only upon default of the principal debtor that the creditor may have recourse on the mortgagor by foreclosing the mortgage properties in lieu of an action for the recovery of the amount of the loan. And the liability of the third party mortgagor extends only to the property mortgaged. Should there be any deficiency, the creditor has recourse on the principal debtor.
3. NO. The special power of attorney authorizing Delgagdo to mortgage Cerna's property as security for Delgado's obligation does not itself make Cerna a co-mortgagor, especially so since only Delgagdo signed the chattel mortgage as mortgagor. The special power of attorney did not make Cerna as mortgagor, all it did was to authorize Delgado to mortgage certain properties belonging to Cerna. And this is in compliance with the requirement in Article 2085 of the New Civil Code, It is essential in mortgage xxx (3) That the person constituting the pledge or mortgage have the free disposal of their property, and IN ABSENCE THEREOF, THAT THEY BE LEGALLY AUTHORIZED FOR THE PURPOSE. Thus, it is clear that only Delgado was the sole mortgagor regardless of the fact that he used properties belonging to a third person to secure the debt.
4. And even if Cerna was a co-mortgagor, Cerna could not be held liable because the complaint was for recovery of a sum of money and not for the foreclosure, thereby abandoning the chattel mortgage as basis for relief, he clearly manifests his lack of desire and interest to go after the mortgaged property as security for the promissory note.
Tuesday, September 8, 2015
CHATTEL MORTGAGE sample
CHATTEL MORTGAGE
KNOW ALL MEN BY THESE PRESENTS:
I, (Name of Mortgagor) of legal age, single/married
to____________________ with postal address at_____________________________hereinafter known as the MORTGAGOR, and _________________________________ of legal age, single/married to______________________ with postal address at
_______________________________ hereinafter
known as the MORTGAGEE, witnesseth:
That the MORTGAGOR is indebted unto the MORTGAGEE in the sum of (Amount in Words) (000,000.00), Philippine Currency, receipt of which is acknowledged by the MORTGAGOR upon the signing of this instrument, payable within a period of _____ years, with interest thereon at the rate of (___) % per annum;
That the MORTGAGOR is indebted unto the MORTGAGEE in the sum of (Amount in Words) (000,000.00), Philippine Currency, receipt of which is acknowledged by the MORTGAGOR upon the signing of this instrument, payable within a period of _____ years, with interest thereon at the rate of (___) % per annum;
That for, and
consideration of , this indebtedness, and to
assure the performance of said obligation to pay, the MORTGAGOR hereby conveys by way of CHATTEL MORTGAGE unto the MORTGAGEE, his heirs and assigns, the following personality now in the
possession of said MORTGAGOR
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MAKE
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MOTOR
NO.
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SERIES
:
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SERIAL/CHASSIS
NO. :
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TYPE
OF BODY :
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PLATE
NO.
:
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YEAR
MODEL :
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FILE
NO.
:
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That the condition of this obligation
is that should the MORTGAGOR
perform the obligation to pay the herein above cited indebtedness of (Amount in Words)
(000,000.00) together with accrued interest thereon, this
chattel mortgage shall at once become null and void and of no effect
whatsoever, otherwise, it
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands, this ____day of ____________ 20___ at ____ Philippines.
_______________________________
_______________________________
MORTGAGOR
MORTGAGEE
IN THE PRESENCE OF:
_______________________________
_______________________________
ACKNOWLEDGEMENT
Republic of the Philippines)
________________________ ) S.S
BEFORE ME, personally appeared:
Name (ID used) Date/Place Issued
(Name of Mortgagor) 10000000 Jan 01, __ / Quezon City
(Name of Mortgagee) 10000000 Jan 11, __ / Las Pinas City
Known to me and to me known to be the same persons who executed the foregoing instrument and acknowledged to me that the same is their free and voluntary act and deed.
WITNESS MY HAND AND SEAL, on the date and place first above written.
(Sgd)
Notary Public for (city/municipal)
Commission Serial No:
1234
Until December 31,
2015
(office address)
Roll
No: 12345
IBP
Lifetime Roll No: 12345:5/6/2010: (city/province)
PTR
No: 12345: 5/6/2010: (city/province)
MCLE
Compliance Cert. No: 12345: 5/6/2010
Doc. No.______;
Page No. ______;
Book No.______;
Series of 20__.
AFFIDAVIT OF GOOD FAITH
We,
the undersigned MORTGAGOR AND MORTGAGEE hereby jointly and severally swear that
we executed the foregoing Chattel Mortgage in order to secure the indebtedness
therein and for no other purpose or purposes contrary to law.
____________________________ _____________________________
MORTGAGOR MORTGAGEE
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