7/26/2019 Phil Refining v. Jarque

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Phil. Refining Co., Inc. v. Jarque, G.R. No. 41506, 25 March 15!

Doctrine: Vessels are considered personal property under the civil law. Similarly under the

common law, vessels are personal property although occasionally referred to as a peculiar kind

of personal property. Since the term "personal property" includes vessels, they are subject to

mortgage agreeably to the provisions of the hattel !ortgage aw.

#acts: $hilippine %efining o., &nc., and 'ar(ue e)ecuted three chattel mortgages on the motor

vessels $andan and *arago+a. either of the first two mortgages had appended an affidavit of

good faith. -he third mortgage contained such an affidavit, but this mortgage was not registered

in the customs house within the period of thirty days prior to the commencement of insolvency

proceedings against 'ar(ue. fourth mortgage was e)ecuted and was entered in the chattel

mortgage registry of the register of deeds within the thirty/day period before the institution of

insolvency proceedings. #& declared 'ar(ue to be an insolvent debtor. s a result, all his

properties were assigned to orominas. #& 'udge declined to order the foreclosure of the

mortgages, but on the contrary sustained the special defenses of fatal defectiveness of the

mortgages.

&ssue:

0. 12 the vessels are considered as personal property and can be the subject of hattel

!ortgage. 3es

4. 12 the hattel !ortgages are valid. o.

%uling:

Vessels are considered personal property under the civil law. Similarly under the common law,

vessels are personal property although occasionally referred to as a peculiar kind of personal

property. Since the term "personal property" includes vessels, they are subject to mortgage

agreeably to the provisions of the hattel !ortgage aw. &ndeed, it has heretofore been

accepted without discussion that a mortgage on a vessel is in nature a chattel mortgage. -he

only difference between a chattel mortgage of a vessel and a chattel mortgage of other

personalty is that it is not now necessary for a chattel mortgage of a vessel to be noted n the

registry of the register of deeds, but it is essential that a record of documents affecting the title

to a vessel be entered in the record of the ollector of ustoms at the port of entry. 2therwise a

mortgage on a vessel is generally like other chattel mortgages as to its re(uisites and validity.

-he hattel !ortgage aw in its section 5, in describing what shall be deemed sufficient to

constitute a good chattel mortgage, includes the re(uirement of an affidavit of good faithappended to the mortgage and recorded therewith. -he absence of the affidavit vitiates a

mortgage as against creditors and subse(uent encumbrancers. s a conse(uence a chattel

mortgage of a vessel wherein the affidavit of good faith re(uired by the hattel !ortgage aw is

lacking, is unenforceable against third persons.