Law on Mortgaging and Registering Chattel

A chattel mortgage is defined as a conditional sale of personal property used as security for debt or other obligations.
The sale is void if the condition (payment or performance) is fulfilled.
Upon fulfillment, the mortgage and sale become void, divesting the mortgagee of title.

Chattel mortgages are valid only against the mortgagor and his legal representatives unless:
- Possession of the property is delivered to and retained by the mortgagee, or
- The mortgage is recorded at the register of deeds office of the province where the mortgagor resides or where the property is situated if outside the Philippines.
If property and residence are in different provinces, recording is required in both.
Manila is considered a province for this Act.

Must be made substantially following a prescribed form, signed by mortgagor with two witnesses, and include affidavits by mortgagor and mortgagee.
Affidavits attest the mortgage is made to secure a valid obligation and not for fraud.
Specific forms of oath and certificate are prescribed.

Must sufficiently identify the property for reasonable inquiry.
For large cattle, detailed marks and certificates of ownership must be included.
Growing crops can be mortgaged with specific duties imposed on mortgagor for crop care.
Mortgage covers only described property, not substituted or subsequently acquired property.

Mortgagee must discharge mortgage within 10 days upon request after condition performance; failure results in penalties.
Personal property under mortgage cannot be moved from the province without written consent of both mortgagor and mortgagee.
Mortgagor cannot sell or pledge the encumbered property without mortgagee's written consent reflected on the mortgage record.
Subsequent mortgages must reference prior mortgages.

Violations of removal, sale, pledge, or unauthorized subsequent mortgages lead to fines double the property's value or imprisonment up to six months, or both.
Half of fines awarded to the injured party and half to the Philippine Treasury.

Mortgage breaker, subsequent mortgagee, or attaching creditor may redeem by paying the due amount and expenses before sale.
Attaching creditor who redeems is subrogated to mortgagee’s rights allowing foreclosure.

After 30 days following breach, mortgagee may cause property to be auctioned publicly.
Notice requirements include at least 10 days' public posting and written notice to interested parties.
Sale conducted by public officer; sale return must be filed and recorded.
Sale proceeds cover expenses, mortgage debt, subsequent mortgages in order, and surplus to mortgagor.
Certificates of transfer issued for large cattle sales.

Registers of deeds maintain chattel mortgage records, certify dates and times, and keep indexes.
Certified copies are admissible in court.
Fees: 3 pesos for recording mortgage with affidavits; 40 centavos for release recording; 20 centavos per folio for sheriff’s return.
Fees accrue to provincial or Manila treasuries.