REGISTRATION OF CHATTEL MORTGAGES
from the mass of the property of the
 Section 114 Recording of Chattel
Mortgages
1. Procedure of
Registration of Chattel
Mortgage;
2. Effect of failure to
register;
3. Functions of Register of
Deeds.
 Section 115 Manner of Recording
Chattel Mortgages
1. General concept of
Chattel Mortgage;
Subject Matter
2. Mortgage of a motor
vehicle;
3. Mortgage property sold
at public auction.
(Foreclosure; Procedure)
 Section 116 Fees for Chattel
Mortgages
*ADDITIONAL TOPICS:
 Deed of Mortgage;
 Affidavit of Good Faith; (Effect of
absence of Affidavit)
 Sale of Chattel Mortgage;
 Assignment of Mortgage;
 Cancellation of Mortgage.
PRESENTATION
General concept of Chattel Mortgage;
Subject Matter
Subject Matter: Personal Property
Essence of Mortgage
- A property is identified or separate
mortgagor as a SECURITY OF MONEY
or the FULFILLMENT OF AN
OBLGATION to answer the amount
of indebtedness, in case of default
of payment
2 Contractual modes by which personal
property can be used to secure a principal
obligation/payment:
1. Contract of pledge
o A pledge would require the
pledger to surrender
possession of the thing
pledged, in order that the
contract may be constituted.
i.e., membership share
If the contract of pledge is not effected,
the suitable security transaction is Chattel
Mortgage.
It is governed by Chattel Mortgage Law
(Act. No. 1508) and the Civil Code.
2. CHATTEL MORTGAGE
- Personal property is recorded in the
Chattel Mortgage Register to secure
performance of an obligation.
Purpose:
- Effective and binding notice to other
creditors of its existence;
- It creates a real right or lien that
follows the property wherever it may
be.
Section 114 Recording of Chattel
Mortgages
Registration of Chattel Mortgage (EFFECT)
- It is a constructive notice of the
existence of a contract;
- And the legal effects of the
instrument must be discovered in the
document itself. (in relation with the
fact of notice.
NOTE: Registration adds nothing to the
instrument, affecting nobody except its
notice of existence.
WHERE TO REGISTER?
-In the Register of Deeds.
FUNCTIONS OF REGISTER OF DEEDS
-purely of a ministerial character;
- no judicial- or quasi-judicial power to
determine the nature of the property.
(They don’t have the power to determine if
the subject matter of mortgage is real of
personal)
e.g. building attached to the land(real).
What matters is:
-accept the qualification of the
property;(adapted by the person who
presents the instrument for registration)
- place the instrument on record;
-upon payment of the proper fee.
Effects of the registration:
-to be determined by the court. (If
such question will arise for legal
determination); (So basically, you have to
file that before the court).
Procedure of Registration of Chattel
Mortgage
1. Execution of Document;
2. Present the document together with
Affidavit of Good Faith;
Affidavit of Good Faith (statement)
- Mortgage is made to secure
obligation specified
- That it is a valid and just obligation
- That it is not entered into for
purposes of fraud.
3. Payment of fees;
4. The Register of Deeds enters in Day
Book in strict order of their
presentation chattel mortgages and
other instruments relating thereto
(primary process);
5. Register of Deeds thereafter enters
in a more detailed form the essential
contents of the instrument in the
Chattel Mortgage Register
(Complementary Process)
EFFECT OF FAILURE TO REGISTER:
1. Valid between the parties but void
against 3rd persons;
2. If instead of registration, it is
delivered, it shall be a Pledge and
not a chattel mortgage (if no chattel
mortgaged deed executed);
3. Actual knowledge is same effect as
registration.
ABSENCE OF GOOD FAITH:
-it vitiates mortgage as against creditors
and subsequent encumbrances
-Mortgage is not valid as between parties
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.
 Certify:
- On each mortgage; duplicate; the
date, hour, minute (after receiving)
- Officer’s return of sale upon any
mortgage.
(Making reference to the VOLUME
and PAGE of the record of the
mortgage)
(Giving certified copy thereof upon
payment of legal fees)
provided in the Registration book. (After
the same shall have been entered in the
Primary Entry Book).
FORCLOSURE OF MORTGAGE
There must be first non-payment and
atleast 30 days elapsed since then.
Alternatives:
Judicial
Extra-judicial- only if there is
stipulation and Authority
PROCEDURE IN FORECLOSURE:
 1. Notice posted for 10 days in at least
2 public places in municipality where
property is to be sold designating the
time, place and purpose of sale.
2. Mortgagor is notified in writing
atleast 10 days before the sale.
3. Public Auction.
4. 30 days after the sale, officer makes
a return and file with the ROD where
mortgage has been recorded.
5. Officer’s return operates as a
discharge of the lien created by the
mortgage.
6. Proceeds to be applied:
a. Cost of Sale
b. Amount of obligation
c. Subsequent mortgages
d. Balance-mortgagor.
MORTGAGE OF A MOTOR VEHICLE
The mortgage of any motor vehicle
in order to affect third persons should not
only be registered in the Chattel Mortgage
Registry, but the same should also be
recorded in the Motor Vehicles Office
(Land Transportation Office, as required by
Section 5(e) of the Revised Motor Vehicle
Law.
Failure to Register:
The mortgage will be ineffective
against a purchaser in good faith who
registers his purchase in the Motor Vehicles
Office.
Thus, as between the Motor Vehicles
Office, and an innocent purchaser for
value of a car who registers the car in his
name, the latter is entitled to preference.
SECTION 116: FEES FOR CHATTEL
MORTGAGES, ETC.
The Register of Deeds shall collect the
following fees for services rendered by him
under this section:
1. Entry fee
 5php for entry or
presentation of any
document in the Primary
Entry Book.
 Supporting papers need
not be charged any
entry, unless the party in
interest desres that they
be likewise entered.
2. Chattel Mortgage (for the filing and
recording each chattel
mortgage,including necessary
certificates and affidavits:
a. Amount of mortgage not exceeding
6,000 php
Fees:
7 php for the first 500 pesos, or
fractional part thereof; and
3 php for each additional 500
pesos, or fractional part thereof.
b. Amount of mortgage more than
6,000 php but not exceeding 30,000
php
Fees:
48 php for the initial amount
not exceeding 8,000; and
8 php for additional 2,000 php,
or fractional part thereof
c. Amount of mortgage more than
30,000 php but not exceeding
100,000 php
Fees:
150 php for initial amount not
exceeding 35,000 php