Professional Documents
Culture Documents
What is a Chattel?
An item of personal property that is movable; it may be animate or
inanimate.
1. Accessory Contract
2. Formal Contract
3. Unilateral Contract
4. Nominate Contract
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2. Object certain which is the subject matter of the contract; and
3. Cause of the obligation which is established
Distinctions
The following are held to be morttgageable Under the Chattel Mortgage Law
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4. Vessels
5. Motor vehicles
6. House of mixed materials
7. House intended to be demolished
8. House built on rented land
9. House of strong materials
10. Machinery which is movable in its nature and becomes
immobilized only by destination or purpose
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- The law provides for only one way: the registration of the personal
property in the Chattel Mortgage Register as security for the performance
of an obligation.
- If the property is situated in a different province from that in which the
mortgagor resides, the registration must be in both registers otherwise
the chattel mortgage is void.
1. Recording required
2. Recording is not required
Effects of Registration
Equity of Redemption
1. After default
2. Before default
3. Where mortgagor refuses to surrender possession
4. Where the right of mortgage conceded/disputed
5. Where third party claims title
6. Where claimant is an unpaid seller
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Foreclosure of Chattel Mortgage
1. Public Sale
- If the mortgagor defaultsin the payment of the secured debt or otherwise
fails to comply with the conditions of the mortgage, the creditor has no
right to appropriate to himself the personal property. He is permitted
only to recover his credit from the proceeds of the sale of the property at
a public auction through a public officer in the manner prescribed.
2. Private Sale
- There is nothing illegal, immoral or against public order in the agreement
for the private sale of the personal properties covered by the chattel
mortgage. The mortgagor is in estoppel to question it except on the
ground of fraud or duress.
1. Nature of remedy
2. Where right of possession is not disputed
3. Where right of possession disputed
4. Inclusion of other parties
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5. Matters to be established
A chattel mortgage does not transfer ownership of the property form the
mortgagor to the mortgagee, the mortgagor can still use the property, unless
there is a stipulation to the contrary.
Under the Revised Penal Code, the following acts are punishable:
(1) Knowingly removing any personal property mortgaged under the
Chattel Mortgage Law to any province or city other than the one in which it
was located at the time of the execution of the mortgage without the written
consent of the mortgagee; and
(2) Selling or pledging personal property already mortgaged, or any part
thereof, under the terms of the Chattel Mortgage Law without the consent of
the mortgagee written on the back of the mortgage and duly recorded in the
Chattel Mortgage Register. (Art. 319, Revised Penal Code.)
An essential element common to the two acts punished under Article 319
of the Revised Penal Code is that the property removed or repledged, as the
case may be, should be the same or identical property that was
mortgaged or pledged before such removal or pledging. The mortgagor is
not relieved of criminal liability even if the mortgage indebtedness is
thereafter paid in full, or the mortgagor-seller informed the purchaser that
the thing sold had been mortgaged. But the sale is valid although no written
consent was obtained from the mortgagee but the mortgagor lays himself
open to criminal prosecution.