[No. L-11990.
29 May 1959] asserting a prior and superior right in them
JOSÉ MOVIDO, plaintiff and
appellant, vs. REHABILITATION FINANCE
CORPORATION
CHATTEL MORTGAGE; ABANDONMENT
OF MORTGAGE LIEN BY OBTAINING A
PERSONAL JUDGMENT.—A mortgagee who
sues and obtains a personal judgment against a
mortgagor upon his credit waives thereby his right
to enforce the mortgage securing it.
IN THE CASE AT BAR By instituting a civil
action in the Court of First Instance to recover the
amount of the loan from the mortgagor, and by
securing a judgment in his favor upon the
compromise agreement entered into by and
between him and the mortgagor, the mortgagee
abandoned his mortgage lien on the chattels in
question.
FACTS:
In 1946 the Vet Bros. & Company, Inc.
mortgaged to Petitioner its rights, title, interest
and participation "in a complete sawmill in
Samar, with all its machineries, tools and
equipment in good running condition" to secure
the payment of a loan. The mortgage was
registered with the RD.
Since VBC was not able to comply with its
obligation, petitioner filed an action against
them in the CFI of Leyte to Recover Sum of
Money. The3 parties however entered into a
compromise agreement.
Thereafter in 1949 the Vet Bros. & Company,
Inc. mortgaged the same to the Rehabilitation
Finance Corporation to secure the payment of
a loan of P46,000. REM was registered in the
RD of Rizal.
RFC foreclose the mortgage.
José S. Movido filed a third party claim on
the chattels advertised for sale at public auction
because of his chattel mortgage recorded before
that of the Rehabilitation Finance Corporation
and by virtue of a judgment in his favor
rendered by the Court of First Instance of
Leyte.
However Despite such claim the Sheriff
proceeded to carry out the sale. As a result
Movido filed an action against the RFC for
unlawfully, fraudulently and maliciously
disregarded his third party claim on the chattels
and sold them at public auction.
The Rehabilitation Finance Corporation
CLAIMED THAT THE REM/CHAT MORT.
and that by filing an action against VBC it, has
waived his right to foreclose the mortgage and
also prayed for its deismissal.
The CFI rendered judgment dismissing the
complaint on the ground that it had been
novated by the previous compromise agreement
and when the spouses Simeón G. Toribio and
Maximiana Escobar de Toribio mortgaged to
the Rehabilitation Finance Corporation the
same chattels the plaintiff s lien on the chattels
no longer existed; and dismissing the
plaintiff's complaint. Hence this petition:
ISSUE: WON PETITIONER HAS LOST
RIGHT TO FORECLOSE THE
MORTGAGE?
RULING: YES
JUDGMENT AFFIRMED
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