BUENAVENTURA T. SALDAÑA, PLAINTIFF AND APPELLANT, VS. PHILIPPINE GUARANTY COMPANY, INC., ET AL., DEFENDANTS AND APPELLEES.

This case arose from a complaint for damages filed by Buenaventura
Saldaña (docketed as Civil Case No. 32703 of the Court of First
Instance of Manila) that was dismissed by order of the Court dated
August 20, 1957, for lack of sufficient cause of action. In another
order of September 30, 1957 of the same court, plaintiff’s motion for
reconsideration was denied, and the case was appealed to this Court.

The facts are that on May 8, 1953, in order to secure an
indebtedness of P15,000.00, Josefina Vda. de Eleazar executed in favor
of the plaintiff-appellant Buenaventura Saldaña a chattel mortgage
covering properties described as follows:

“A building of strong materials, used for restaurant
business, located in front of the San Juan de Dios Hospital at Dewey
Boulevard, Pasay City, and the following personal properties therein
contained:

1 Radio, Zenith, cabinet type
1 Cooler
1 Electric range, stateside, 4 burners
1 Frigidaire, 8 cubic feet
1 G.E. Deepfreezer
8 Tables, stateside
32 Chromium chairs, stateside
1 Sala set upholstered, 6 pieces
1 Bedroom set, 6 pieces.

And all other furnitures, fixtures or equipment found in the said premises.”

Subsequent to the execution of said mortgage and while the same was
still in force, the defendant Hospital de San Juan de Dios, Inc.
obtained, in Civil Case No. 1930 of the Municipal Court of Pasay City,
a judgment against Josefina Vda. de Eleazar. A writ of execution was
duly issued and, on January 28, 1957, the same was served on the
judgment debtor by the sheriff of Pasay City; whereupon, the following
properties of Josefina Eleazar were levied upon:

8 Tables with 4 (upholstered) chairs each
1 Table with 4 (wooden) chairs
1 Table (large) with 5 chairs
1 Radio-phono (Zenith, 8 tubes)
2 Showcases (big, with mirrors)
1 Rattan sala set with 4 chairs, 1 table and 3 sidetables
1 Wooden drawer
1 Tocador (brown with mirror)
1 Aparador
2 Beds (single type)
1 Freezer (deep freeze)
1 Gas range (magic chef, with 4 burners)
1 Freezer (G.E.).

On January 31, 1957, the plaintiff-appellant Saldaña filed a
third-party claim asserting that the above-described properties levied
are subject to his chattel mortgage of May 8, 1953. In virtue thereof,
the sheriff released only some of the property originally included in
the levy of January 28, 1957, to wit:

1 Radio, Zenith, cabinet type
8 Tables, stateside
32 Chromium chairs, stateside
1 G.E. Deep freezer

To proceed with the execution sale of the rest of the properties
still under levy, the defendants-appellees Hospital de San Juan de
Dios, Inc. and the Philippine Guaranty Co., Inc. executed an indemnity
bond to answer for any damages that plaintiff might suffer.
Accordingly, on February 13, 1957, the said properties were sold to the
defendant hospital as the highest bidder, for P1,500.00.

Appellant claims that the phrase in the chattel mortgage
contract—”and all other furnitures, fixtures and equipment found in the
said premises”, validly and sufficiently covered within its terms the
personal properties disposed of in the auction sale, as to warrant an
action for damages by the plaintiff mortgagee.

There is merit in appellant’s contention. Section 7 of Act No, 1508,
commonly and better known as the Chattel Mortgage Law, does not demand
a minute and specific description of every chattel mortgaged in the
deed of mortgage but only requires that the description of the
properties be such “as to enable the parties in the mortgage, or any
other person, after reasonable inquiry and investigation to identify
the same”. Gauged by this standard, general descriptions have been held
valid by this Court. (See Strochecker vs. Ramirez, 44 Phil., 993; Pedro de Jesus vs. Guam Bee Co., Inc., 72 Phil., 484).

A similar rule obtains in the United States courts and decisions
there have repeatedly upheld clauses of general import in mortgages of
chattels other than goods for trade, and containing expressions similar
to that of the contract now before us. Thus, “and all other stones
belonging to me and all other goods and chattels” (Russel vs. Winne, 97 Am. Dec. 755); “all of the property of the said W.W. Allen used or situated upon the leased premises” (Dorman vs. Crooks State Bank, 64 A.L.R. 614); “all goods in the store where they are doing business in E. City, N.C.” (Davis vs.
Turner, 120 Fed. 605); “all and singular the goods, wares, stock, iron
tools manufactured articles and property of every description, being
situated in or about the shop or building now occupied by me in Howley
Street” (Winslow vs. Merchants Ins. Co., 38 Am. Dec. 368,
were held sufficient description, on the theory that parol evidence
could supplement it to render identification of the chattels mortgaged
possible. The prevailing rule is expressed in Walker vs. Johnson (Mont.) 124 A.L.R. 937:

“The courts and textbook writers have developed
several rules for determination of the sufficiency of the description
in a chattel mortgage. The rules are general in nature and are
different where the controversy is between the parties to the mortgage
from the situation where third parties without actual notice come in.
In 11 C.J. 457, it is said: ‘As against third persons the description
in the mortgage must point out its subject matter so that such person
may identify the chattels covered, but it is not essential that the
description be so specific that the property may be identified by it
alone, if such description or means of identification which, if pursued
will disclose the property conveyed.’ In 5 R.C.L. 423 the rule is
stated that a description which will enable a third person, aided by
inquiries which the instrument itself suggests to identify the property
is sufficiently definite. In 1 Jones on Chattel Mortgages and
Conditional Sales, Bower’s Edition, at page 95 the writer says: ‘As to
them (third persons), the description is sufficient if it points to
evidence whereby the precise thing mortgaged may be ascertained with
certainty.’ Here there is nothing in the description ‘873 head of
sheep’ from which anyone, the mortgagee or third persons, could
ascertain with any certainty what chattels were covered by the mortgage.

“In
many instances the courts have held the description good where, though
otherwise faulty, the mortgage explicitly states that the property is
in the possession of the mortgagor, and especially where it is the only
property of that kind owned by him.”

The specifications in the chattel mortgage contract in the instant case are, we believe, in substantial compliance with the “reasonable description rule”
fixed by the chattel Mortgage Act. We may notice in the agreement,
moreover, that the phrase in question is found after an enumeration of
other specific articles. It can thus be reasonably inferred therefrom
that the “furnitures, fixtures and equipment” referred to are
properties of like nature, similarly situated or similarly used in the
restaurant of the mortgagor located in front of the San Juan de Dios
Hospital at Dewey Boulevard, Pasay City, which articles can be
definitely pointed out or ascertained by simple inquiry at or about the
premises. Note that the limitation found in the last paragraph of
section 7 of the Chattel Mortgage Law^[1] on “like or substituted properties” make reference to those “thereafter
acquired by the mortgagor and placed in the same depository as the
property originally mortgaged”, not to those already existing and
originally included at the date of the constitution of the chattel
mortgage. A contrary view would unduly impose a more rigid condition
than what the law prescribes, which is that the description be only such as to enable identification after a reasonable inquiry and investigation.

The case of Giberson vs. A. N. Jureidini Bros., 44 Phil.,
216, 219, cited by the appellees and the lower court, cannot be likened
to the case at bar, for there, what were sought to be mortgaged
included two stores with all its merchandise, effects, wares, and other bazar goods
which were being constantly disposed of and replaced with new supplies
in connection with the business, thereby making any particular or
definite identification either impractical or impossible under the
circumstances. Here, the properties deemed covered were more or less
fixed, or at least permanently situate or used in the premises of the
mortgagor’s restaurant.

The rule in the Jureidini case is further weakened by the Court’s observation that (44 Phil., p. 220)—

“Moreover, if there should exist any doubts on the
questions we have just discussed, they should be threshed out in the
insolvency proceedings,”

which appears inconsistent with the definitive character of the rulings invoked.

We find that the ground for the appealed order (lack of cause of
action) does not appear so indubitable as to warrant a dismissal of the
action without inquiry into the merits and without submission of
evidence, since the latter may supplement the description in the deed
of mortgage (Nico vs. Blanco, 81 Phil., 213; Zobel vs. Abreau, 52 Off. Gaz., 3592).

Wherefore, the orders appealed from are set aside and the case
remanded to the lower court for further proceedings. Costs against
appellees.

Paras, C. J., Bengzon, Montemayor, Bautista, Angelo, Labrador, Concepcion, Endencia, Barrera, and Gutierrez David, JJ., concur.
Padilla, J., took no part.

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^[1] “A chattel mortgage shall
be deemed to cover only the property described therein and not like or
substituted property thereafter acquired by the mortgagor and placed in
the same depository as the property originally mortgaged, anything in
the mortgage to the contrary notwithstanding.”