REGISTRATION OF CHATTEL MORTGAGES - A property is identified or separate

from the mass of the property of the

 Section 114 Recording of Chattel mortgagor as a SECURITY OF MONEY
Mortgages or the FULFILLMENT OF AN
OBLGATION to answer the amount
1. Procedure of of indebtedness, in case of default
Registration of Chattel of payment
Mortgage;
2. Effect of failure to 2 Contractual modes by which personal
register; property can be used to secure a principal
3. Functions of Register of obligation/payment:
Deeds.
1. Contract of pledge
 Section 115 Manner of Recording o A pledge would require the
Chattel Mortgages pledger to surrender
possession of the thing
1. General concept of pledged, in order that the
Chattel Mortgage; contract may be constituted.
Subject Matter
2. Mortgage of a motor i.e., membership share
vehicle;
3. Mortgage property sold If the contract of pledge is not effected,
at public auction. the suitable security transaction is Chattel
(Foreclosure; Procedure) Mortgage.

 Section 116 Fees for Chattel It is governed by Chattel Mortgage Law

Mortgages (Act. No. 1508) and the Civil Code.

*ADDITIONAL TOPICS:
2. CHATTEL MORTGAGE
 Deed of Mortgage; - Personal property is recorded in the
 Affidavit of Good Faith; (Effect of Chattel Mortgage Register to secure
absence of Affidavit) performance of an obligation.
 Sale of Chattel Mortgage;
 Assignment of Mortgage; Purpose:
 Cancellation of Mortgage. - Effective and binding notice to other
creditors of its existence;
- It creates a real right or lien that
follows the property wherever it may
PRESENTATION be.

General concept of Chattel Mortgage;

Subject Matter

Subject Matter: Personal Property

Essence of Mortgage
Section 114 Recording of Chattel Procedure of Registration of Chattel
Mortgages Mortgage

1. Execution of Document;
Registration of Chattel Mortgage (EFFECT) 2. Present the document together with
- It is a constructive notice of the Affidavit of Good Faith;
existence of a contract;
- And the legal effects of the Affidavit of Good Faith (statement)
instrument must be discovered in the - Mortgage is made to secure
document itself. (in relation with the obligation specified
fact of notice. - That it is a valid and just obligation
- That it is not entered into for
NOTE: Registration adds nothing to the purposes of fraud.
instrument, affecting nobody except its
notice of existence. 3. Payment of fees;
4. The Register of Deeds enters in Day
Book in strict order of their
WHERE TO REGISTER? presentation chattel mortgages and
-In the Register of Deeds. other instruments relating thereto
(primary process);
FUNCTIONS OF REGISTER OF DEEDS 5. Register of Deeds thereafter enters
in a more detailed form the essential
-purely of a ministerial character; contents of the instrument in the
- no judicial- or quasi-judicial power to Chattel Mortgage Register
determine the nature of the property. (Complementary Process)
(They don’t have the power to determine if
the subject matter of mortgage is real of
personal) EFFECT OF FAILURE TO REGISTER:

e.g. building attached to the land(real). 1. Valid between the parties but void
against 3rd persons;
What matters is: 2. If instead of registration, it is
delivered, it shall be a Pledge and
-accept the qualification of the not a chattel mortgage (if no chattel
property;(adapted by the person who mortgaged deed executed);
presents the instrument for registration) 3. Actual knowledge is same effect as
- place the instrument on record; registration.
-upon payment of the proper fee.

ABSENCE OF GOOD FAITH:

Effects of the registration:
-to be determined by the court. (If -it vitiates mortgage as against creditors
such question will arise for legal and subsequent encumbrances
determination); (So basically, you have to -Mortgage is not valid as between parties
file that before the court).
Note: No need to be in public document.
DEED OF MORTGAGE *Such certificate index and
-Requires both parties the description to recording shall be open to public
identify the subject matter being inspection.
mortgaged. *These duly certified copies of such
records and of filed instruments shall be
RECEIVABLE AS EVIDENCE IN COURT.
Section 115 Manner of Recording Chattel
Mortgages How will the RECORDING OF MORTGAGE
be effected?
REGISTER OF DEEDS:
-Primary Entry book *BY MAKING AN ENTRY (BOOKS)
- Registration book -ROD gives correlative number;
-State the names of mortgagee and
(For Chattel Mortgage) mortgagor;
-Sum or obligation guaranteed;
-Date of the instrument;
What to record? - Name of the notary it was sworn to
-Any chattel mortgage; or acknowledged
-Assignment or discharge thereof;
-Other instruments relating to the NOTE: The property, terms and conditions
recorded instrument. of the mortgage is mentioned in detail in
-All other instrument presented in the instrument filed (ROD will give a proper
duplicate. file number for it).

NOTE: How will the RECORDING OF OTHER

Duplicate: Will be returned to the INSTRUMENTS relating to a recorded
person concerned. mortgage?

Original: to be filed in the Register of *BY WAY OF ANNOTATION on the space

Deeds. provided in the Registration book. (After
the same shall have been entered in the
Primary Entry Book).
 Certify:
- On each mortgage; duplicate; the
date, hour, minute (after receiving)
FORCLOSURE OF MORTGAGE
- Officer’s return of sale upon any
mortgage. There must be first non-payment and
atleast 30 days elapsed since then.
(Making reference to the VOLUME Alternatives:
and PAGE of the record of the Judicial
mortgage) Extra-judicial- only if there is
stipulation and Authority
(Giving certified copy thereof upon
payment of legal fees) PROCEDURE IN FORECLOSURE:
 1. Notice posted for 10 days in at least The Register of Deeds shall collect the
2 public places in municipality where following fees for services rendered by him
property is to be sold designating the under this section:
time, place and purpose of sale.
2. Mortgagor is notified in writing 1. Entry fee
atleast 10 days before the sale.  5php for entry or
3. Public Auction. presentation of any
4. 30 days after the sale, officer makes document in the Primary
a return and file with the ROD where Entry Book.
mortgage has been recorded.  Supporting papers need
5. Officer’s return operates as a not be charged any
discharge of the lien created by the entry, unless the party in
mortgage. interest desres that they
6. Proceeds to be applied: be likewise entered.
a. Cost of Sale
b. Amount of obligation 2. Chattel Mortgage (for the filing and
c. Subsequent mortgages recording each chattel
d. Balance-mortgagor. mortgage,including necessary
certificates and affidavits:

MORTGAGE OF A MOTOR VEHICLE a. Amount of mortgage not exceeding

6,000 php
The mortgage of any motor vehicle
in order to affect third persons should not Fees:
only be registered in the Chattel Mortgage 7 php for the first 500 pesos, or
Registry, but the same should also be fractional part thereof; and
recorded in the Motor Vehicles Office 3 php for each additional 500
(Land Transportation Office, as required by pesos, or fractional part thereof.
Section 5(e) of the Revised Motor Vehicle
Law. b. Amount of mortgage more than
6,000 php but not exceeding 30,000
Failure to Register: php
The mortgage will be ineffective
against a purchaser in good faith who Fees:
registers his purchase in the Motor Vehicles 48 php for the initial amount
Office. not exceeding 8,000; and
8 php for additional 2,000 php,
Thus, as between the Motor Vehicles or fractional part thereof
Office, and an innocent purchaser for
value of a car who registers the car in his c. Amount of mortgage more than
name, the latter is entitled to preference. 30,000 php but not exceeding
100,000 php

SECTION 116: FEES FOR CHATTEL Fees:

MORTGAGES, ETC. 150 php for initial amount not
exceeding 35,000 php