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CHATTEL MORTGAGE and sale immediately becomes void, and the mortgagee is
thereby divested of his title.
A. GENERAL CONCEPTS Originally regarded as a conditional sale of personal
property, similar to a pacto de retro sale
Art. 2085 The following requisites are essential to the
contracts of pledge and mortgage: PCI Leasing & Finance, Inc. v. Trojan Metal Industries Inc., et
al.
(1) That they be constituted to secure the fulfillment of a The true transaction was a simple loan secured by a
principal obligation; chattel mortgage, instead of a simulated financial
leasing
(2) That the pledgor or mortgagor be the absolute owner of Upon TMIs default, PCILF was entitled to seize the
the thing pledged or mortgaged; mortgaged equipment, not as owner but as creditor-
mortgagee for the purpose of foreclosing the chattel
(3) That the persons constituting the pledge or mortgage mortgage
have the free disposal of their property, and in the absence PCILFs sale to a third party of the mortgaged
thereof, that they be legally authorized for the purpose. equipment and collection of the proceeds of the sale
can be deemed in the exercise of its right to foreclose
Third persons who are not parties to the principal obligation the chattel mortgage as creditor-mortgagee
may secure the latter by pledging or mortgaging their own
property. (1857)
Brief Facts: TMI came to PCI to seek a loan. Instead of
extending a loan, PCI offered to buy various equipment TMI
Art. 2087 It is also of the essence of these contracts that owned, in exchange for P2.8M. Deeds of sale were executed
when the principal obligation becomes due, the things in and both parties entered into a lease agreement.
which the pledge or mortgage consists may be alienated for
the payment to the creditor. (1858) B. FORM OF CHATTEL MORTGAGE
Art. 2140 By a chattel mortgage, personal property is
Act No. 1508, Sec. 4 Validity. A chattel mortgage shall
recorded in the Chattel Mortgage Register as a security for
not be valid against any person except the mortgagor, his
the performance of an obligation. If the movable, instead of
executors or administrators, unless the possession of the
being recorded, is delivered to the creditor or a third
property is delivered to and retained by the mortgagee or
person, the contract is a pledge and not a chattel mortgage.
unless the mortgage is recorded in the office of the register
(n)
of deeds of the province in which the mortgagor resides at
the time of making the same, or, if he resides without the
Art. 2141 The provisions of this Code on pledge, insofar as Philippine Islands, in the province in which the property is
they are not in conflict with the Chattel Mortgage Law shall situated: Provided, however, That if the property is situated
be applicable to chattel mortgages. (n) in a different province from that in which the mortgagor
resides, the mortgage shall be recorded in the office of the
A chattel mortgage: register of deeds of both the province in which the
Is a real security transaction constituted to secure mortgagor resides and that in which the property is
the fulfillment of a principal obligation by the absolute situated, and for the purposes of this Act the city of Manila
owner (the mortgagor) of personal property who has shall be deemed to be a province.
free disposal of the property, and in the absence
thereof, is legally authorized for the purpose Act No. 1508, Sec. 5 Form. A chattel mortgage shall be
Is perfected by the recording of the personal property deemed to be sufficient when made substantially in
in the Chattel Mortgage Register as a security accordance with the following form, and shall be signed by
Subjects the collateral to the condition that when the the person or persons executing the same, in the presence
principal obligation becomes due, the collateral may be of two witnesses, who shall sign the mortgage as witnesses
alienated for payment to the creditor (the mortgagee) to the execution thereof, and each mortgagor and
mortgagee, or, in the absence of the mortgagee, his agent
Art. 2140: adheres to the equitable concept of a chattel or attorney, shall make and subscribe an affidavit in
mortgage; preserves the distinction between pledge and substance as hereinafter set forth, which affidavit, signed
chattel mortgage by the parties to the mortgage as above stated, and the
certificate of the oath signed by the authority administering
Act of recording grants the chattel mortgagee the symbolic the same, shall be appended to such mortgage and
possession of the collateral recorded therewith.
In commercial transactions, it greatly facilitates the sale of FORM OF CHATTEL MORTGAGE AND AFFIDAVIT.
goods and merchandise; sales of merchandise would be
sluggish and insubstantial if a chattel mortgage did not "This mortgage made this ____ day of ______19____ by
adequately protect sellers against the defaults and _______________, a resident of the municipality of
delinquencies of buyers ______________, Province of ____________, Philippine Islands
mortgagor, to ____________, a resident of the municipality of
Old definition of Chattel Mortgage (but repealed by the ___________, Province of ______________, Philippine Islands,
CC) mortgagee, witnesseth:
A conditional sale of personal property as security for the
payment of a debt, or the performance of some other "That the said mortgagor hereby conveys and mortgages to
obligation specified therein, the condition being that the the said mortgagee all of the following-described personal
sale shall be void upon the seller paying the purchaser a property situated in the municipality of ______________,
sum of money or doing some other act named. If the Province of ____________ and now in the possession of said
condition is performed according to the terms the mortgage mortgagor, to wit:
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Signed by the person or persons executing the same
(Here insert specific description of the property mortgaged.) In the presence of two witnesses, who shall sign as
witnesses to the execution
"This mortgage is given as security for the payment to the Each mortgagor and mortgagee, or, in the absence of
said ______, mortgagee, of promissory notes for the sum of the mortgagee, his agent or attorney, shall make and
____________ pesos, with (or without, as the case may be) subscribe an affidavit in substance, signed by the
interest thereon at the rate of ___________ per centum per parties
annum, according to the terms of __________, certain Certificate of oath signed by the authority
promissory notes, dated _________, and in the words and administering the same
figures following (here insert copy of the note or notes Appended to the mortgage and recorded
secured).
When a corporation is a party: affidavit may be made and
"(If the mortgage is given for the performance of some subscribed by a director, trustee, cashier, treasurer, or
other obligation aside from the payment of promissory manager thereof, or by a person authorized
notes, describe correctly but concisely the obligation to be
performed.) When a partnership is a party: affidavit may be made and
subscribed by one member
"The conditions of this obligation are such that if the
mortgagor, his heirs, executors, or administrators shall well C. OBLIGATIONS SECURED
and truly perform the full obligation (or obligations) above
stated according to the terms thereof, then this obligation
Act No. 1508, Sec. 5 Form. xxx
shall be null and void.
FORM OF OATH.
"We severally swear that the foregoing mortgage is made
"Executed at the municipality of _________, in the Province of
for the purpose of securing the obligation specified in the
________, this _____ day of 19_____
conditions thereof, and for no other purpose, and that the
same is a just and valid obligation, and one not entered into
____________________
for the purpose of fraud."
(Signature of mortgagor.)
FORM OF CERTIFICATE OF OATH.
"In the presence of
"At ___________, in the Province of _________, personally
appeared ____________, the parties who signed the foregoing
"_________________
affidavit and made oath to the truth thereof before me.
"_________________
(Two witnesses sign here.)
"_____________________________"
(Notary public, justice of the peace (now municipal judge),
FORM OF OATH.
or other officer, as the case may be.)
"We severally swear that the foregoing mortgage is made
for the purpose of securing the obligation specified in the
conditions thereof, and for no other purpose, and that the AFFIDAVIT OF GOOD FAITH
same is a just and valid obligation, and one not entered into Unique requirement, required to be executed by the parties
for the purpose of fraud." under the Chattel Mortgage Law
FORM OF CERTIFICATE OF OATH. Affidavit states that the chattel mortgage is:
"At ___________, in the Province of _________, personally 1. Made solely for the purpose of securing the obligation
appeared ____________, the parties who signed the foregoing specified in the chattel mortgage, and
affidavit and made oath to the truth thereof before me. 2. The principal obligation is a just and valid obligation,
and one not entered into for the purpose of fraud
"_____________________________"
(Notary public, justice of the peace, 1 or other officer, as the OBLIGATIONS SECURED
case may be.) Unlike a pledge, can only cover obligations existing at the
time the mortgage is constituted
Act No. 1508, Sec. 6 Corporations. When a corporation
is a party to such mortgage the affidavit required may be Cannot secure after-incurred obligations even if these
made and subscribed by a director, trustee, cashier, future debts are accurately described
treasurer, or manager thereof, or by a person authorized on
the part of such corporation to make or to receive such Cannot be made to secure a debt to be thereafter
mortgage. When a partnership is a party to the mortgage contracted because the law provides that the parties must
the affidavit may be made and subscribed by one member make oath that the debt is a just debt, honestly due and
thereof. owing from the mortgagor to the mortgagee
Contracts Involved:
(a) Contract of Loan: between Acme and Producers
1st: P3-M (FULLY PAID) with chattel mortgage
2nd: P2.7-M (FULLY PAID)
3rd: P1-M (NOT FULLY PAID)
(b) Chattel Mortgage: between Chua Pac and Producers,
in favor of Acme covering the P3-M
(2) Alienable real rights in accordance with the laws, Act No. 1508, Sec. 7 Descriptions of property. The
imposed upon immovables. description of the mortgaged property shall be such as to
enable the parties to the mortgage, or any other person,
Nevertheless, movables may be the object of a chattel after reasonable inquiry and investigation, to identify the
mortgage. (1874a) same.
Art. 416 The following things are deemed to be personal If the property mortgaged be large cattle," as defined by
property: section one of Act Numbered Eleven and forty-seven, (Now
section 511 of the Administrative Code) and the
(1) Those movables susceptible of appropriation which are amendments thereof, the description of said property in the
not included in the preceding article; mortgage shall contain the brands, class, sex, age, knots of
radiated hair commonly known as remolinos, or cowlicks,
(2) Real property which by any special provision of law is and other marks of ownership as described and set forth in
considered as personalty; the certificate of ownership of said animal or animals,
together with the number and place of issue of such
(3) Forces of nature which are brought under control by certificates of ownership.
science; and
If growing crops be mortgaged the mortgage may contain
(4) In general, all things which can be transported from an agreement stipulating that the mortgagor binds himself
place to place without impairment of the real property to properly to tend, care for and protect the crop while
which they are fixed. (335a) growing, and faithfully and without delay to harvest the
same, and that in default of the performance of such duties
Art. 417 The following are also considered as personal the mortgage may enter upon the premises, take all the
property: necessary measures for the protection of said crop, and
retain possession thereof and sell the same, and from the
(1) Obligations and actions which have for their object proceeds of such sale pay all expenses incurred in caring
movables or demandable sums; and for, harvesting, and selling the crop and the amount of the
indebtedness or obligation secured by the mortgage, and
(2) Shares of stock of agricultural, commercial and industrial the surplus thereof, if any shall be paid to the mortgagor or
entities, although they may have real estate. (336a) those entitled to the same.
Act No. 1508, Sec. 2 All personal property shall be subject A chattel mortgage shall be deemed to cover only the
to mortgage, agreeably to the provisions of this Act, and a property described therein and not like or substituted
mortgage executed in pursuance thereof shall be termed property thereafter acquired by the mortgagor and placed
chattel mortgage. in the same depository as the property originally
mortgaged, anything in the mortgage to the contrary
notwithstanding.
GR: Movable/Personal properties are the object of a chattel
mortgage.
Sec. 7 of Act 1508 (Chattel Mortgage Law) does NOT require
a specific and thorough definition.
EX: Jurisprudence provides that immovable/real properties
may be the object of a chattel mortgage when (1) parties
The Reasonable Description Rule under the said provision
validly agree/consent to treat them as movable/personal
only requires that the description must enable the parties to
properties, and (2) no third persons are prejudiced by such
identify the collateral, after reasonable inquiry and
an agreement. (Makati Leasing and Finance Corp v.
investigation.
Wearever Textile Mills, citing Tumalad v. Vicencio).
Makati Leasing and Finance Corp v. Wearever Textile 2. AFTER ACQUIRED PROPERTIES
Mills
Concept: Chattel Mortgage; Object of Chattel Mortgage Act No. 1508, Sec. 7 Descriptions of property. The
Contract Involved: description of the mortgaged property shall be such as to
(a) Chattel Mortgage, between MLFC and WTM over enable the parties to the mortgage, or any other person,
certain raw materials and machinery after reasonable inquiry and investigation, to identify the
same.
Brief Facts: When WTM defaulted on its obligation to MLFC,
MLFC sought to execute the deed of chattel mortgage If the property mortgaged be large cattle," as defined by
(subject of which was an immobilized machine) securing the section one of Act Numbered Eleven and forty-seven, (Now
obligation. The CFI found for MLFC and issued a writ of section 511 of the Administrative Code) and the
replevin. However, the CA reversed the CFI and ruled that amendments thereof, the description of said property in the
the immobilized machine is n invalid subject of the writ and mortgage shall contain the brands, class, sex, age, knots of
of the chattel mortgage. radiated hair commonly known as remolinos, or cowlicks,
and other marks of ownership as described and set forth in
Doctrine: Parties may treat real property as personal the certificate of ownership of said animal or animals,
property for a chattel mortgage, as long as (1) they validly together with the number and place of issue of such
certificates of ownership.
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When a sale of the collateral by the mortgagor is
If growing crops be mortgaged the mortgage may contain involved, lack of consent from the mortgage only affects the
an agreement stipulating that the mortgagor binds himself criminal liability of the mortgagor but NOT the validity
properly to tend, care for and protect the crop while Concept: Chattel mortgage; ownership of collateral
growing, and faithfully and without delay to harvest the Contracts Involved:
same, and that in default of the performance of such duties (a) Contract of Loan (Financing contract) between
the mortgage may enter upon the premises, take all the Wilfredo Dy and Libra Finance and Investment
necessary measures for the protection of said crop, and Corporation
retain possession thereof and sell the same, and from the (b) Chattel Mortgage over the truck and tractor between
proceeds of such sale pay all expenses incurred in caring Wilfredo Dy and Libra
for, harvesting, and selling the crop and the amount of the (c) Contract of Sale with Assumption of Mortgage
indebtedness or obligation secured by the mortgage, and over the tractor between Wilfredo Dy and Perfecto Dy
the surplus thereof, if any shall be paid to the mortgagor or (d) Chattel Mortgage between Perfecto Dy and Libra
those entitled to the same. (e) Contract of Sale over the truck between Wilfredo Dy
and Carol Dy-Seno
A chattel mortgage shall be deemed to cover only the
property described therein and not like or substituted Brief Facts: Wilfredo purchased a tractor and truck through
property thereafter acquired by the mortgagor and placed financing extended by Libra Finance. He sold the tractor to
in the same depository as the property originally his brother Perfecto, who assumed the mortgage debt with
mortgaged, anything in the mortgage to the contrary the consent of Libra. After the consummation of the sale
notwithstanding. through the execution of a Deed of Absolute Sale in favor of
perfecto, the tractor was seized by the provincial sheriff of
GR: A chattel mortgage will only cover the property Cebu to satisfy the judgment debt of Wilfredo in a civil case
described therein, and shall not cover property acquired filed against the latter by Gelac Trading. Perfecto is now
after its execution. questioning the validity of the seizure of the tractor,
claiming that he and not Wilfredo was the owner of the
EX: However, Sec. 7 allows for a stipulation in the chattel same at the time it was taken into custody by the sheriff,
mortgage that the mortgagor may sell the chattel that is hence could not be levied upon to satisfy a judgment
covered by the mortgage, and is thereafter obligated to against Wilfredo.
replace, renew or substitute the sold chattel with other
property thereafter acquired. Such provision is valid and Doctrine: The mortgagor who gave the property as
binding and effectively widens the scope of a chattel security under a chattel mortgage did not part with the
mortgage to after acquired properties. ownership of the same. Hence, the mortgagor could validly
alienate the property mortgaged but sale can only bind the
The purpose of allowing such a provision is to promote mortgagee if the same be done with the latters consent.
economic and business transactions.
Servicewide Specialists v. IAC
Had it not been allowed, it would have been impossible to If the alienation, however, amounts to a substitution
constitute a chattel mortgage over, for example, a retail of the debtor (as it is in this case), the consent of the
store, the stocked goods of which are bought and sold mortgagee-creditor is essential, pursuant to Art. 1293 of the
frequently, without requiring them to close down. This is NCC; it affects the validity of the alienation.
contrary to the purpose of the Chattel Mortgage Law.
It is only required that the chattel mortgage expressly F. FORECLOSURE OF CHATTEL MORTGAGE
stipulate that such after acquired properties are included
under the coverage of the chattel mortgage. Act No. 1508, Sec. 8 Failure of mortgagee to discharge
the mortgage. If the mortgagee, assign, administrator,
executor, or either of them, after performance of the
E. OWNERSHIP OF COLLATERAL condition before or after the breach thereof, or after tender
It is essential that (1) the mortgagor be the absolute of the performance of the condition, at or after the time
owner of the collateral, and (2) that the mortgagor have fixed for the performance, does not within ten days after
the free disposal of the collateral OR, if it does not have being requested thereto by any person entitled to redeem,
such right to freely dispose of the collateral, be legally discharge the mortgage in the manner provided by law, the
authorized to constitute the mortgage. person entitled to redeem may recover of the person whose
duty it is to discharge the same twenty pesos for his neglect
A mortgagor retains the right to alienate the collateral. and all damages occasioned thereby in an action in any
court having jurisdiction of the subject-matter thereof.
However, such right is restrained by requirements imposed
by law: the mortgagor MUST obtain the consent of the Act No. 1508, Sec. 14 Sale of property at public auction;
mortgagee to make such alienation. Officer's return; Fees; Disposition of proceeds. The
- Otherwise, he shall be liable under RPC Art. 319, Par. 2 mortgagee, his executor, administrator, or assign, may,
(Sale or Pledge of Mortgaged Property) after thirty days from the time of condition broken, cause
the mortgaged property, or any part thereof, to be sold at
Somera in class: While it is already established that failure public auction by a public officer at a public place in the
to obtain consent of the mortgagee with respect to the municipality where the mortgagor resides, or where the
alienation will affect criminal liability, how does it affect the property is situated, provided at least ten days' notice of
validity of the alienation (ex. sale) to a third person? the time, place, and purpose of such sale has been posted
at two or more public places in such municipality, and the
Dy v. CA mortgagee, his executor, administrator, or assign, shall
notify the mortgagor or person holding under him and the
persons holding subsequent mortgages of the time and
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place of sale, either by notice in writing directed to him or Sec. 4 of Act 3135, as amended;
left at his abode, if within the municipality, or sent by mail if
he does not reside in such municipality, at least ten days d) sign and issue the certificate of sale, subject to the
previous to the sale. approval of the Executive Judge, or in his absence, the Vice-
Executive Judge. No certificate of sale shall be issued in
The officer making the sale shall, within thirty days favor of the highest bidder until all fees provided for in the
thereafter, make in writing a return of his doings and file the aforementioned sections and in Rule 141, Section 9(1), as
same in the office of the register of deeds where the amended by A.M. No. 00-2-01-SC, shall have been paid;
mortgage is recorded, and the register of deeds shall record Provided, that in no case shall the amount payable under
the same. The fees of the officer for selling the property Rule 141, Section 9(1), as amended, exceed P100,000.00;
shall be the same as in the case of sale on execution as
provided in Act Numbered One hundred and ninety, (Now e) after the certificate of sale has been issued to the
Rule 141, section 7 of the Rules of Court) and the highest bidder, keep the complete records, while awaiting
amendments thereto, and the fees of the register of deeds any redemption within a period of one (1) year from date of
for registering the officer's return shall be taxed as a part of registration of the certificate of sale with the Register of
the costs of sale, which the officer shall pay to the register Deeds concerned, after which, the records shall be archived.
of deeds. The return shall particularly describe the articles Notwithstanding the foregoing provision, juridical persons
sold, and state the amount received for each article, and whose property is sold pursuant to an extra-judicial
shall operate as a discharge of the lien thereon created by foreclosure, shall have the right to redeem the property
the mortgage. The proceeds of such sale shall be applied to until, but not after, the registration of the certificate of
the payment, first, of the costs and expenses of keeping foreclosure sale which in no case shall be more than three
and sale, and then to the payment of the demand or (3) months after foreclosure, whichever is earlier, as
obligation secured by such mortgage, and the residue shall provided in Section 47 of Republic Act No. 8791 (as
be paid to persons holding subsequent mortgages in their amended, Res. Of August 7, 2001).
order, and the balance, after paying the mortgages, shall be
paid to the mortgagor or person holding under him on Where the application concerns the extrajudicial foreclosure
demand. of mortgages of real estates and/or chattels in different
locations covering one indebtedness, only one filing fee
If the sale includes any "large cattle," a certificate of corresponding to such indebtedness shall be collected. The
transfer as required by section sixteen of Act Numbered collecting Clerk of Court shall, apart from the official receipt
Eleven hundred and forty-seven (Now Section 523 of the of the fees, issue a certificate of payment indicating the
Administrative Code) shall be issued by the treasurer of the amount of indebtedness, the filing fees collected, the
municipality where the sale was held to the purchaser mortgages sought to be foreclosed, the real estates and/or
thereof. chattels mortgaged and their respective locations, which
certificate shall serve the purpose of having the application
A.M. No. 99-10-05-0 August 7, 2001 docketed with the Clerks of Court of the places where the
[PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF other properties are located and of allowing the extrajudicial
MORTGAGE] foreclosures to proceed thereat.
In line with the responsibility of an Executive Judge under 3. The notices of auction sale in extrajudicial foreclosure for
Administrative Order No. 6, dated June 30, 1975, for the publication by the sheriff or by a notary public shall be
management of courts within his administrative area, published in a newspaper of general circulation pursuant to
included in which is the task of supervising directly the work Section 1, Presidential Decree No. 1079, dated January 2,
of the Clerk of Court, who is also the Ex-Office Sheriff, and 1977, and non-compliance therewith shall constitute a
his staff, and the issuance of commissions to notaries public violation of Section 6 thereof.
and enforcement of their duties under the law, the following
procedures are hereby prescribed in extrajudicial 4. The Executive Judge shall, with the assistance of the
foreclosure of mortgages: Clerk of Court, raffle applications for extrajudicial
foreclosure of mortgage under the direction of the sheriff
1. All applications for extra-judicial foreclosure of mortgage among all sheriffs, including those assigned to the Office of
whether under the direction of the sheriff or a notary public, the Clerk of Court and Sheriffs IV assigned in the branches.
pursuant to Act 3135, as amended by Act 4118, and Act
1508, as amended, shall be filed with the Executive Judge, 5. The name/s of the bidder/s shall be reported by the
through the Clerk of court who is also the Ex-Officio Sheriff. sheriff or the notary public who conducted the sale to the
Clerk of Court before the issuance of the certificate of sale.
2. Upon receipt of an application for extra-judicial
foreclosure of mortgage, it shall be the duty of the Clerk of This Resolution amends or modifies accordingly
Court to: Administrative Order No. 3 issued by then Chief Justice
Enrique M. Fernando on 19 October 1984 and
a) receive and docket said application and to stamp Administrative Circular No. 3-98 issued by the Chief Justice
thereon the corresponding file number, date and time of Andres R. Narvasa on 5 February 1998.
filing;
The Court Administrator may issue the necessary guidelines
b) collect the filing fees therefore pursuant to rule 141, for the effective enforcement of this Resolution.
Section 7(c), as amended by A.M. No. 00-2-01-SC, and issue
the corresponding official receipt; The Clerk of Court shall cause the publication of this
Resolution in a nuewspaper of general circulation not later
c) examine, in case of real estate mortgage foreclosure, than August 14, 2001 and furnish copies thereof to the
whether the applicant has complied with all the Integrated Bar of the Philippines.
requirements before the public auction is conducted under
the direction of the sheriff or a notary public, pursuant to This Resolution shall take effect on the 1st day of
September of the year 2001.
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municipality where the sale was held to the purchaser
Promulgated this 7th day of August 2001 in the City of thereof.
Manila.
The redemption cited in Section 13 of the Chattel Mortgage
If the principal obligation becomes due and the debtor Law partakes of an equity of redemption.
defaults, the creditor, as mortgagee, may elect to
foreclose the collateral, by causing its alienation in EQUITY OF REDEMPTION
accordance with the procedures allowed by law. - The right of the mortgagor in default to recover the
collateral before a foreclosure sale by paying the
The Chattel Mortgage Law authorizes the extrajudicial principal, interest, and other costs that are due, thereby
foreclosure of chattel mortgage. alleviating, as a matter of equity, the severity of the
legal rule on default (Blacks Law Dictionary, Ninth
1. EQUITY OF REDEMPTION Edition)
- The right of the mortgagor to extinguish the mortgage
Act No. 1508, Sec. 13 When the condition of a chattel and retain ownership of the collateral after default in
mortgage is broken, a mortgagor or person holding a the performance of the principal obligation but before
subsequent mortgage, or a subsequent attaching creditor the foreclosure sale of the collateral, by paying the
may redeem the same by paying or delivering to the principal obligation within a grace period of 30 days
mortgagee the amount due on such mortgage and the granted by the Chattel Mortgage Law
reasonable costs and expenses incurred by such breach of
condition before the sale thereof. An attaching creditor who If the equity of redemption is exercised not by the
so redeems shall be subrogated to the rights of the mortgagor but by a subsequent attaching creditor, who
mortgagee and entitled to foreclose the mortgage in the effectively pays the mortgagee, the rights acquired by the
same manner that the mortgagee could foreclose it by the attaching creditor are the rights that pertain to the
terms of this Act. mortgagee, granting the attaching creditor the right to
foreclose the chattel mortgage.
Act No. 1508, Sec. 14 Sale of property at public auction;
Officer's return; Fees; Disposition of proceeds. The
mortgagee, his executor, administrator, or assign, may,
after thirty days from the time of condition broken, cause
the mortgaged property, or any part thereof, to be sold at
public auction by a public officer at a public place in the
municipality where the mortgagor resides, or where the
property is situated, provided at least ten days' notice of
the time, place, and purpose of such sale has been posted
at two or more public places in such municipality, and the
mortgagee, his executor, administrator, or assign, shall
notify the mortgagor or person holding under him and the
persons holding subsequent mortgages of the time and
place of sale, either by notice in writing directed to him or
left at his abode, if within the municipality, or sent by mail if
he does not reside in such municipality, at least ten days
previous to the sale.