Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 34385 September 21, 1931
ALEJANRA TORRES, ET AL., plaintiff-appellees,
vs.
!RANC"SCO L"MJAP, Spe#$%& A'm$($)tr%tor o* t+e e)t%te o* t+e 'e#e%)e' Jo)e ,.
-e()o(, defendant-appellant.
x---------------------------------------------------------x
G.R. No. 3438. September 21, 1931
SA,"NA /ERGARA /A. E TORRES, ET AL., plaintiffs-appellees,
vs.
!RANC"SCO L"MJAP, Spe#$%& A'm$($)tr%t$o( o* t+e e)t%te o* t+e 'e#e%)e' Jo)e ,.
-e()o(, defendant-appellant.
Duran, Lim and Tuason for appellant.
Guevara, Francisco and Recto for appellees.
JO-NSON, J.:
These two actions wee co!!enced in the Cout of "ist #nstance of Manila on Apil $%, $&'(,
fo the pupose of secuin) fo! the defendant the possession of two du) stoes located in the
Cit* of Manila, coveed b* two chattel !ot)a)es executed b* the deceased +ose B. ,enson in
favo of the plaintiffs.
#n the fist case the plaintiffs alle)ed that +ose B. ,enson, in his lifeti!e, executed in thei favo
a chattel !ot)a)e -Exhibit A. on his du) stoe at Nos. $($-$(' Calle Rosaio, /nown as
"a!acia ,enson, to secue a loan of P0,(((, althou)h it was !ade to appea in the instu!ent
that the loan was fo P1(,(((.
#n the second case the plaintiffs alle)ed that the* wee the heis of the late 2on "loentino
Toes3 and that +ose B. ,enson, in his lifeti!e, executed in favo of 2on "loentino Toes a
chattel !ot)a)e -also Exhibit A. on his thee du) stoes /nown as ,enson4s Pha!ac*,
"a!acia ,enson and Botica ,ensonina, to secue a loan of P5(,(((, which was late educed to
P1%,(((, and fo which, ,enson4s Pha!ac* at Nos. 0$-0' Escolta, e!ained as the onl* secuit*
b* a)ee!ent of the paties.
#n both cases the plaintiffs alle)ed that the defendant violated the te!s of the !ot)a)e and that,
in conse6uence theeof the* beca!e entitled to the possession of the chattels and to foeclose
thei !ot)a)es theeon. 7pon the petition of the plaintiffs and afte the filin) of the necessa*
bonds, the cout issued in each case an ode diectin) the sheiff of the Cit* of Manila to ta/e
i!!ediate possession of said du) stoes.
The defendant filed pacticall* the sa!e answe to both co!plaints. ,e denied )eneall* and
specificall* the plaintiffs4 alle)ations, and set up the followin) special defenses8
-$. That the chattel !ot)a)es -Exhibit A, in 9.R. No. ':';5 and Exhibit A, in 9.R. No. ':1;%.
ae null and void fo lac/ of sufficient paticulait* in the desciption of the popet* !ot)a)ed3
and
-1. That the chattels which the plaintiffs sou)ht to ecove wee not the sa!e popet* descibed
in the !ot)a)e.
The defendant also filed a counteclai! fo da!a)es in the su! of P1(,((( in the fist case and
P$((,((( in the second case.
7pon the issue thus aised b* the pleadin)s, the two causes wee tied to)ethe b* a)ee!ent of
the paties. Afte heain) the evidence adduced duin) the tial and on +ul* $0, $&'(, the
,onoable Maiano Albet, <ud)e, in a ve* caefull* pepaed opinion, aived at the conclusion
-a. that the defendant defaulted in the pa*!ent of inteest on the loans secued b* the !ot)a)es,
in violation of the te!s theeof3 -b. that b* eason of said failue said !ot)a)es beca!e due,
and -c. that the plaintiffs, as !ot)a)ees, wee entitled to the possession of the du) stoes
"a!acia ,enson at Nos. $($-$(' Calle Rosaio and ,enson4s Pha!ac* at Nos. 0$-0' Escolta.
Accodin)l*, a <ud)!ent was endeed in favo of the plaintiffs and a)ainst the defendant,
confi!in) the attach!ent of said du) stoes b* the sheiff of the Cit* of Manila and the
delive* theeof to the plaintiffs. The dispositive pat of the decision eads as follows8
En virtud de todo lo expuesto, el +u=)ado dicta sentencia confi!ado en todas sus pates
los odenes de fechas $% * $0 de abil de pesente ano, dictadas en las causas Nos. '0(&%
* '0(&0, espectiva!ente, * declaa definitiva la ente)a hecha a los de!andantes po el
>heiff de Manila de las boticas en cuestion. >e condena en costas al de!andado en
a!bas causas.
"o! the <ud)!ent the defendant appealed, and now !a/es the followin) assi)n!ents of eo8
#. The lowe cout eed in failin) to !a/e a findin) on the 6uestion of the sufficienc* of
the desciption of the chattels !ot)a)ed and in failin) to hold that the chattel !ot)a)es
wee null and void fo lac/ of paticulait* in the desciption of the chattels !ot)a)ed.
##. The lowe cout eed in efusin) to allow the defendant to intoduce evidence tendin)
to show that the stoc/ of !echandise found in the two du) stoes was not in existence
o owned b* the !ot)a)o at the ti!e of the execution of the !ot)a)es in 6uestion.
###. The lowe cout eed in holdin) that the ad!inistato of the deceased is now
estopped fo! contestin) the validit* of the !ot)a)es in 6uestion.
#?. The lowe cout eed in failin) to !a/e a findin) on the counteclai!s of the
defendant.
@ith efeence to the fist assi)n!ent of eo, we dee! it unnecessa* to discuss the 6uestion
theein aised, inas!uch as accodin) to ou view on the 6uestion of estoppel, as we shall
heeinafte set foth in ou discussion of the thid assi)n!ent of eo, the defendant is estopped
fo! 6uestionin) the validit* of these chattel !ot)a)es.
#n his second assi)n!ent of eo the appellant attac/s the validit* of the stipulation in said
!ot)a)es authoi=in) the !ot)a)o to sell the )oods coveed theeb* and to eplace the! with
othe )oods theeafte ac6uied. ,e insists that a stipulation authoi=in) the disposal and
substitution of the chattels !ot)a)ed does not opeate to extend the !ot)a)e to afte-ac6uied
popet*, and that such stipulation is in contavention of the expess povision of the last
paa)aph of section 0 Act No. $5(;, which eads as follows8
A chattel !ot)a)e shall be dee!ed to cove onl* the popet* descibed theein and not
li/e o substituted popet* theeafte ac6uied b* the !ot)a)o and placed in the sa!e
deposito* as the popet* oi)inall* !ot)a)ed, an*thin) in the !ot)a)e to the conta*
notwithstandin).
#n ode to )ive a coect constuction to the above-6uoted povision of ou Chattel Mot)a)e
Aaw -Act No. $5(;., the spiit and intent of the law !ust fist be ascetained. @hen said Act was
placed on ou statute boo/s b* the 7nited >tates Philippine Co!!ission on +ul* 1, $&(%, the
pi!a* ai! of that law-!a/in) bod* was undoubtedl* to po!ote business and tade in these
#slands and to )ive i!petus to the econo!ic develop!ent of the count*. Beain) this in !ind, it
could not have been the intention of the Philippine Co!!ission to appl* the povision of section
0 above 6uoted to stoes open to the public fo etail business, whee the )oods ae constantl*
sold and substituted with new stoc/, such as du) stoes, )oce* stoes, d*-)oods stoes, etc. #f
said povision wee intended to appl* to this class of business, it would be pacticall* i!possible
to constitute a !ot)a)e on such stoes without closin) the!, conta* to the ve* spiit about a
handicap to tade and business, would estain the ciculation of capital, and would defeat the
pupose fo which the law was enacted, to wit, the po!otion of business and the econo!ic
develop!ent of the count*.
#n the intepetation and constuction of a statute the intent of the law-!a/e should alwa*s be
ascetained and )iven effect, and couts will not follow the lette of a statute when it leads awa*
fo! the tue intent and pupose of the Ae)islatue and to conclusions inconsistent with the spiit
of the Act. Bn this sub<ect, >utheland, the foe!ost authoit* on statuto* constuction, sa*s8
The Intent of Statute is the La. C #f a statute is valid it is to have effect accodin) to the
pupose and intent of the law!a/e. The intent is the vital pat, the essence of the law,
and the pi!a* ule of constuction is to ascetain and )ive effect to that intent. The
intention of the le)islatue in enactin) a law is the law itself, and !ust be enfoced when
ascetained, althou)h it !a* not be consistent with the stict lette of the statute. Couts
will not follow the lette of a statute when it leads awa* fo! the tue intent and pupose
of the le)islatue and to conclusions inconsistent with the )eneal pupose of the act.
#ntent is the spiit which )ives life to a le)islative enact!ent. #n constuin) statutes the
pope couse is to stat out and follow the tue intent of the le)islatue and to adopt that
sense which ha!oni=es best with the content and po!otes in the fullest !anne the
appaent polic* and ob<ects of the le)islatue. -?ol. ## >utheland, >tatuto* Constuction,
pp. %&'-%&5..
A stipulation in the !ot)a)e, extendin) its scope and effect to afte-ac6uied popet*, is valid
and bindin) C
. . . whee the afte-ac6uied popet* is in enewal of, o in substitution fo, )oods on
hand when the !ot)a)e was executed, o is puchased with the poceeds of the sale of
such )oods, etc. -$$ C.+., p. :'%..
Cobbe*, a well-/nown authoit* on Chattel Mot)a)es, eco)ni=es the validit* of stipulations
elatin) to afte-ac6uied and substituted chattels. ,is views ae based on the decisions of the
supe!e couts of seveal states of the 7nion. ,e sa*s8 DA !ot)a)e !a*, b* expess
stipulations, be dawn to cove )oods put in stoc/ in place of othes sold out fo! ti!e to ti!e. A
!ot)a)e !a* be !ade to include futue ac6uisitions of )oods to be added to the oi)inal stoc/
!ot)a)ed, but the !ot)a)e !ust expessl* povide that such futue ac6uisitions shall be held as
included in the !ot)a)e. ... @hee a !ot)a)e covein) the stoc/ in tade, funitue, and fixtues
in the !ot)a)o4s stoe povides that Dall )oods, stoc/ in tade, funitue, and fixtues heeafte
puchased b* the !ot)a)o shall be included in and coveed b* the !ot)a)e,D the !ot)a)e
coves all afte-ac6uied popet* of the classes !entioned, and, upon foeclosue, such popet*
!a* be ta/en and sold b* the !ot)a)ee the sa!e as the popet* in possession of the !ot)a)o
at the ti!e the !ot)a)e was executed.D -?ol. #, Cobbe* on Chattel Mot)a)es, sec. '%$, pp. :0:,
:05..
#n ha!on* with the foe)oin), we ae of the opinion -a. that the povision of the last paa)aph
of section 0 of Act No. $5(; is not applicable to du) stoes, ba=aas and all othe stoes in the
natue of a evolvin) and floatin) business3 -b. that the stipulation in the chattel !ot)a)es in
6uestion, extendin) thei effect to afte-ac6uied popet*, is valid and bindin)3 and -c. that the
lowe cout co!!itted no eo in not pe!ittin) the defendant-appellant to intoduce evidence
tendin) to show that the )oods sei=ed b* the sheiff wee in the natue of afte-ac6uied popet*.
@ith efeence to the thid assi)n!ent of eo, we a)ee with the lowe cout that, fo! the facts
of ecod, the defendant-appellant is estopped fo! contentin) the validit* of the !ot)a)es in
6uestion. This featue of the case has been ve* abl* and full* discussed b* the lowe cout in its
decision, and said discussion is !ade, b* efeence, a pat of this opinion.
As to the fouth assi)n!ent of eo e)adin) the counteclai!s of the defendant-appellant, it
!a* be said that in view of the conclusions eached b* the lowe cout, which ae sustained b*
this cout, the lowe cout co!!itted no eo in not !a/in) an* expess findin) as to said
counteclai!s. As a !atte of fo!, howeve, the counte-clai!s should have been dis!issed,
but as the tial cout decided both cases in favo of the plaintiffs and confi!ed and atified the
odes diectin) the sheiff to ta/e possession of the chattels on behalf of the plaintiffs, thee was,
in effect, a dis!issal of the defendant4s counteclai!s.
"o all of the foe)oin), we ae of the opinion and so hold that the <ud)!ent appealed fo! is in
accodance with the facts and the law, and the sa!e should be and is heeb* affi!ed, with costs.
>o odeed.