BACHRACH MOTOR COMPANY, INC., PLAINTIFF, VS. RICARDO SUMMERS, DEFENDANT.

On March 9, 1920, Elias Xboitiz executed a
chattel mortgage upon a Nash automobile, bearing the Factory No.
143643, in favor of the Bachrach Motor Company, Inc., to secure a debt
for P3,675, payable in twelve installments. In the month of November of
the same year, the mortgagor defaulted in the payment of the
installment for that month; and as a consequence the Motor Company
determined to have the car sold for the purpose of foreclosing the
mortgage, in the manner prescribed in section 14 of the Chattel
Mortgage Law (Act No. 1508). It accordingly requested Ricardo Summers,
as sheriff of the city of Manila, to take tthe car from the debtor and
to expose it to public sale, as provided in said section. Acting in
pursuance of this authority the sheriff applied to the mortgagor for
the automobile ; but the mortgagor refused to surrender possession; and
the Motor Company instituted an action of replevin to recover the car.
However, its efforts to get possession were again destined to be
temporarily baffled, as Aboitiz gave bond for the retention of the
automobile pendente lite. The Motor Company thereupon filed
the present petition in this court for the writ of mandamus to compel
the sheriff to seize the car from the mortgagor and sell it. To this
petition the sheriff demurred, and the cause is now before us for the
determination of the issues thus presented.

The question to which we sjaall first address ourselves—and which
is really the vital point in the case—is whether, after default by the
Mortgagor in the performance of the conditions of a chattel mortgage,
(the sheriff is unconditionally bound to seize the mortgaged
propertyjat the instance of the creditor, and sell it to satisfy the
debt. The petitioner supposes that the sheriff must so proceed and
that, upon failure to do so, he can be compelled thereto by the writ of
mandamus.

In commercial usage the property which is the subject of a chattel
mortgage is, as is well known, almost invariably left in the possession
of the mortgagor, and this possession’ is not disturbed until the
mortgagor defaults in the payment of the secured debt or otherwise
fails to comply with the conditions of the mortgage.

When default occurs and the creditor desires to foreclose, he must
necessarily take the mortgaged property into his hands; and his right
to do this is clearly implied in the provision which gives the right to
sell. Says the statute: “The mortgagee * * * may, after thirty days
from the time of condition broken, cause the mortgaged property, or any
part thereof, to be sold at public auction by a public officer at a
public place in the municipality where the mortgagor resides,” etc.
(Sec. 14, Act No. 1508.) As will be seen, this provision supposes that
the creditor has possession of the mortgaged property, for the power to
sell imports a power to make delivery of the thing sold to the
purchaser; and without actual possession delivery would be impossible.
The right of the mortgagee to have possession after condition broken
must therefore be taken to be unquestionable; and to this effect is the
great weight of American authority. (11 C. J., 560; 28 Am, & Eng.
Encyc. of Law, 2d ed., 782; 5 R. C. L., 462; St. Mary’s Machine Co. vs.
National Supply Co., 96 Am. St. Rep., 677, 684, note.)

Where, however, the debtor refuses to yield up the property, the
creditor must institute an action, either to effect a judicial
foreclosure directly, or to secure possession as a preliminary to the
sale contemplated in the provision above quoted. He cannot lawfully
take the property by force against the will of the debtor. Upon this
point the American authorities are even more harmonious than they are
upon the point that the creditor is entitled to possession. As was said
many years ago by the writer of this opinion in a monographic article
contributed to an encyclopedic legal treatise, “if possession cannot be
peaceably obtained the mortgagee must bring an action.” (Trust Deeds
and Power of Sale Mortgages, 28 Am. & Eng. Encyc. of Law, 2d ed.,
783.) In the article on Chattel Mortgages, in Corpus Juris, we find the
following statement of the law on the same point: “The only restriction
on the mode by which the mortgagee shall secure possession of the
mortgaged property after breach of condition is that he must act in an
orderly manner and without creating a breach of the peace, subjecting
himself to an action for trespass.” (11 C. J., 560; see also 5 R. C. L., 462.)

The reason why the law does not allow the creditor to possess
himself of the mortgaged property with violence and against the will of
the debtor is to be found in the fact that the creditor’s right of
possession is conditioned upon the fact of default, and the existence
of this fact may naturally be the subject of controversy. The debtor,
for instance, may claim in good faith, and rightly or wrongly, that the
debt is paid, or that for some other reason the alleged default is
nonexistent. His possession in this situation is as fully entitled to
protection as that of any other person, and in the language of article
446 of the Civil Code he must be respected therein. To allow the
creditor to seize the property against the will of the debtor would
make the former to a certain extent both judge and executioner in his
own cause—a thing which is inadmissible in the absence of unequivocal
agreement in the contract itself or express provision to that effect in
the statute.

It will be observed that the law places the responsibility of
conducting the sale upon “a public officer;” and it might be supposed
that an officer, such as the sheriff, can seize the property where the
creditor could not. This suggestion is, we think, without force, as it
is manifest that the sheriff or other officer proceeding under the
authority of the language already quoted from section 14 of the Chattel
Mortgage Law, becomes pro hac vice the mere agent of the
creditor. There is nothing in this provision which creates a specific
duty on the part of the officer to seize the mortgaged property; and no
intention on the part of the law-making body to impose such a duty can
be implied. The conclusion is clear that for the recovery of
possession, where the right is disputed, the creditor must proceed
along the usual channels by action in court. Whether the sheriff, upon
being indemnified by the creditor, could safely proceed to take the
property from the debtor, is a point upon which we express no opinion.

In the brief of counsel attention is directed to the circumstance
that in section 3 of Act No. 1508, the chattel mortgage is said to be a
conditional sale; and an inference is drawn therefrom supposedly
favorable to the contention of the petitioner. It is undeniable that
the language there used supports the view that the mortgagee is the
owner of the mortgaged property and therefore entitled to possession
after condition broken, but that provision is in no wise concerned with
the problem as to how possession may be acquired if the mortgagor
refuses to yield it up. In this connection a few words of comment
exhibiting the true import of that provision will not be out of place.
The language referred to is as follows:

“SEC. 3. A chattel mortgage is a conditional sale
of personal property as security for the payment of a debt, or the
performance of some other obligation specified therein, the condition
being that the sale shall be void upon the seller paying to the
purchaser a sum of money or doing some other act named. If the
condition is performed according to its terms the mortgage and sale
immediately become void, and the mortgagee is thereby divested of his
title.”

The use of the term conditional sale in connection with the chattel
mortgage is apt to be misleading to a person unacquainted with the
common-law history of the contract of mortgage; and it is unfortunate
that such an expression should have been incorporated in a statute
intended to operate-in the Philippine Islands. As will be readily seen,
the idea is totally foreign to the conception of the mortgage which is
entertained by the civil law. What is worse it does not even reflect
with fidelity the actual state of the American and English law on the
same subject.

Rightly understood, in connection with the common-law history of
the mortgage, the meaning of the section quoted may be exhibited in
some such proposition as the following:

A chattel mortgage is a contract which purports to be, and in form
is, a sale of personal property, intended as security for the payment
of a debt, or the performance of some other obligation specified
therein, upon the condition subsequent that such sale shall be void
upon payment of the debt or performance of the specified obligation
according to the terms of the contract.

Now, while the proposition which we have here formulated contains a
true description of the external features of the chattel mortgage, it
does not by any means embody a correct statement of its juridical
effects. A visit to any recorder’s office in a common-law State will
supply abundant proof that chattel mortgages are commonly drawn in the
form of a straight sale, to which a clause of defeasance is added,
declaring that in case the debt is paid or other obligation performed
the contract will be void. But the form of the contract is merely a
heritage from the remote past, and does not by any means reveal the
exact import of the transaction. Every person, however superficially
versed in American and English law, knows that in equity the mortgage,
however drawn, is to be treated as a mere security. The contract in
fact merely imposes on the mortgaged property a subsidiary obligation
by which it is bound for the debt or other principal obligation of the
mortgagor. This is the equitable conception of the mortgage; and ever
since the English Court of Chancery attained to supremacy in this
department of jurisprudence, mortgages have been dealt with in this
sense in every land where English law has taken root. The old formulas
may, it is true, remain, but a new spirit has been breathed into them.
And of course sooner or later the ancient forms are discarded. Look,
for instance, at the form of a chattel mortgage given in section 5 of
Act No. 1508, where it is said that the mortgagor “conveys and
mortgages.” This. means “conveys by way of mortgage;” and the word
“mortgages” alone would of course be equally effective. In fact we note
that in the contract executed in the present case, it is merely said
that EliaS Aboitiz “mortgages” the automobile to which the contract
relates. In describing the chattel mortgage as a conditional sale we
are merely rattling the bones of an antiquated skeleton from which all
semblance of animate life has long since departed. The author of
section 3 of the Chattel Mortgage Law was most unhappy in his effort to
elucidate to civilian jurists the American conception of the contract
of mortgage.

But whatever conclusion may be drawn in the premises with respect
to the true nature of a chattel mortgage, the result must in this case
be the same; for whether the mortgagee becomes the real owner of the
mortgaged property— as some suppose—or acquires only certain rights
therein, it is none the less clear that he has after default the right
of possession; though it cannot be admitted that he may take the law
into his own hands and wrest the property violently from the possession
of the mortgagor. Neither can he do through the medium of a public
officer that which he cannot directly do himself. The consequence is
that in such case the creditor must either resort to a civil action to
recover possession as a preliminary to a sale, or preferably he may
bring an action to obtain a judicial foreclosure in conformity, so far
as practicable, with the provisions of the Chattel Mortgage Law.

Only a few words will be added with reference to the question
whether this court has jurisdiction to entertain the present
proceeding. In this connection it is insisted by the attorneys for the
respondent that the sheriff is an officer of the Court of First
Instance and the petitioner should, so it is insisted, address himself
to that court as the proper court to control the activities of the
sheriff. While this criticism would be valid if the purpose were to
control the sheriff in the matter of carrying-into effect any judgment,
order, or writ of a Court of First Instance, it is not applicable in a
case like the present where the act to be done is defined by general
law and has no relation to the office of sheriff as the executive
officer of the Court of First Instance. As to such activities this
court must be considered to have concurrent jurisdiction with the Court
of First Instance under section 515 of the Code of Civil Procedure.

The demurrer must be sustained, and the writ prayed for will be denied. It is so ordered, with costs against the petitioner.

Mapa, C. J., Araullo, Avancena, and Villamor, JJ., concur.