Florentina Aleman vs.

Presentacion de Catera
GR L-13693, March 25, 1961
Chattel Mortgage

Summary
De Catera owns trucks, one of which which crashed, killing and injuring several people including
Aleman. In a suit for damages, she was adjudged solidarily liable with the driver, and one of her other
trucks was attached. Mortgagee Southern Motors intervened to quash the attachment but failed. Southern
claimed that there was a mortgage annotated on the title to the truck with the Registry of Deeds, but
Aleman said it is not recorded with the Motor Vehicle Office and is thus not binding. Who has a better
right over the truck? Aleman and the victims have a better right as judgment creditors. A chattel
mortgage must be registered not only with the ROD, but also with the MVO pursuant to related laws. A
second sale recorded with the MVO without carrying over the chattel mortgage constitutes a waiver on
the mortgage lien.

Facts
De Catera owns several trucks. One of the trucks, while trying to overtake another truck, crashed into a
ditch. Aleman was injured while her son and 2 passengers on the truck were killed instantly. Thus, they
instituted a civil action for damages.

The court attached one of the other trucks of de Catera, but Southern Motors instituted a third party claim,
saying it was the mortgagee. Southern made a counterclaim praying for the quashal of the writ of
attachment but it was dismissed, and the judge held that de Catera would be solidarily liable with the
truck driver for the damages due to the victims.

On appeal, Southern Motors said it sold the bus on installment to Defensor and a chattel mortgage was
executed to secure the balance, which was properly registered with the ROD. But Aleman counters saying
that since Defensor sold the truck to de Catera without recording the mortgage in the Motor Vehicles
Office, it effectively waived the mortgage lien, giving rise to the preference of the money judgement.

Issue
Who has a preferred right to the bus under attachment, the chattel mortgagee or the families of the
victims? (Families of the victims)

Held
A chattel mortgage, in order to affect persons, should not only be registered in the Chattel Mortgage
Registry, but should also be recorded in the Motor Vehicle Office. Thus, since Southern did not record the
mortgage with the MVO, despite having registering the same with the ROD, it is without force and effect
with respect to the victims. The right of the victims, as judgment creditors, is the similar to that of an
innocent purchaser, since the purchase was recorded in the MVO without carrying over the chattel
mortgage.