G.R. No. L-4637 June 30, 1952
JOSE A. LUNA, petitioner, vs. DEMETRIO B. ENCARNACION, Judge of First Instance of Rizal, TRINIDAD REYES and THE PROVINCIAL SHERIFF OF RIZAL, respondents.

FACTS

On September 25, 1948, Jose A. Luna executed a deed designated as a chattel mortgage in favor of Trinidad Reyes, conveying a house of mixed materials in Pasig, Rizal, to secure a promissory note for P1,500. The document was registered. Upon Luna’s failure to pay, Reyes requested the provincial sheriff to sell the house at public auction, with notice given to Luna. The sheriff sold the property to Reyes on May 28, 1949. After the redemption period expired without Luna redeeming, Reyes demanded possession, but Luna refused. On October 13, 1950, Reyes filed a petition in the Court of First Instance of Rizal, invoking Act No. 3135 , as amended, to authorize the sheriff to place her in possession. Luna opposed, arguing that Act No. 3135 applies only to real estate mortgages, the mortgage here was a chattel mortgage, and even if considered a real estate mortgage, it lacked an express stipulation authorizing extra-judicial sale. The respondent judge overruled the opposition and granted the petition, ordering the sheriff to place Reyes in possession and Luna to vacate. Luna filed this petition for certiorari, contending the judge acted in excess of jurisdiction.

ISSUE

1. Whether the extra-judicial sale conducted under Act No. 3135 , as amended, was valid given that the mortgage was designated as a chattel mortgage and covered a house of mixed materials.
2. Whether the mortgagee’s remedy of filing a petition for a writ of possession, instead of an ordinary action for recovery of possession, was proper after the extra-judicial sale.

RULING

1. The extra-judicial sale conducted under Act No. 3135 , as amended, was invalid for that purpose. The deed was expressly designated as a chattel mortgage, and the property, a house of mixed materials, was considered personal property. Act No. 3135 applies only to real estate mortgages and requires an express stipulation authorizing extra-judicial sale, which conditions were not present. However, the Court noted that the sale’s validity might be maintained under the Chattel Mortgage Law ( Act No. 1508 ), which allows similar foreclosure procedures, but the record was incomplete to determine compliance. This issue was not decisive for the immediate case.
2. The mortgagee’s remedy of filing a petition for a writ of possession was improper. Even assuming the sale was valid, the purchaser’s remedy upon the mortgagor’s refusal to surrender possession is to bring an ordinary action for recovery of possession, not to obtain possession by force or through a sheriff via a petition. This allows the debtor an opportunity to be heard on both possession and the underlying obligation. The petition filed by Reyes was therefore improper.
The order of the respondent judge was set aside.