Professional Documents
Culture Documents
A. Requisites
1. Constituted to secure a principal obligation.
2. Mortgagor is absolute owner of the thing.
3. The persons constituting the mortgage have free disposal of property/legally authorized
4. Essence is when principal obligation becomes due, the things in which the mortgage consists may be alienated for the
payment to the creditor.
5. Perfected by recording
-Personal property is recorded in the Chattel Mortgage Register as security for the performance of an obligation. Notes:
provisions of pledge applicable as long as it’s not in conflict with the Chattel Mortgage Law.-
If a CM contract is not recorded, it is not binding on third persons. Only valid between mortgagor and mortgagee
Act of recording grants chattel mortgagee the symbolic possession of the collateral.
B. Form
Act 15081. Chattel mortgage not valid unless recorded in the officeof deeds (Sec. 4)2. Where recorded:a. province where
mortgagor resides at the time of the making of the CMb. OR if he resides outside Phils.
whereproperty is situated.c. If the property is situated in a different provincefrom which the mortgagor resides
recorded both wherethe property is and where mortgagor resides.d. City of Manila
Deemed sufficient when substantially inaccordance with the ff. forma. and signed by partiesb. in the presence of 2
witnessesc. each mortgagee and mortgagor, or in theabsence of mortgagee, his agent/attorney shall make andsubscribe
an affidavit d. and the certificate of oath signed by authorityadministering the same.e. property must be specifically
described.f. copy of notes/notes secured attached.g. describe concisely other obligations aside frompayment of
PNNotes:-
(Sec. 6) if corporation: affidavit by director,cashier, trustee, cashier,treasurer/manager/person authorized-
Refusal on the part of the debtor toexecute the agreement as to cover after-incurred obligation may constitute anevent of
default of the contract to mortgage
BUT the remedy of foreclosure will cover only debts existing at the time of constitution of the contract of CM.
D. Object of Chattel Mortgage
1. movables
2. personal property (Act. 1508, Sec. 2)
3. obligations and actions which have for their object movables or demandable sums.
4. shares of stock of agricultural, commercial, and industrial entities, although they may have real estate.
GR: Chattel covers only the property describedtherein and does not cover property thereafteracquired.
E:A stipulation in a CM authorizing mortgagor tosell the property covered by the CM, and toreplace, renew or substitute
them with otherproperty thereafter acquired is VALID andBINDING and extends the scope and effet of theCM to after
acquired properties.
E. Ownership of Collateral
- Mortgagor can alienate mortgaged property as hecontinues to be the owner of the same-
Mortgagor’s right to alienate is restricted by
requirements imposed by law.- MORTGAGOR MUST PROCURE THE WRITTEN CONSENT
OF MORTGAGEE (PENAL LIABILITY IF HE DOESN’T)