G.R. No. L-10630, December 21, 1915
THE UNITED STATES, plaintiff-appellant, vs. EUGENIO KILAYKO, defendant-appellee.

FACTS:
The defendant, Eugenio Kilayko, was charged with violating Section 12 of the Chattel Mortgage Law ( Act No. 1508 ) for selling mortgaged property without the mortgagee’s consent and without having fully paid the mortgage debt. After pleading not guilty, the defendant filed a motion to dismiss (treated as a demurrer), admitting the truth of the allegations but arguing that the criminal action could not proceed because the mortgage debt had been fully paideither directly to the creditor or by deposit with the court clerkby the time the case was instituted. The trial court granted the motion and dismissed the information, accepting the defendant’s argument that the penal provision’s purpose was solely to protect the mortgagee, and that full payment extinguished criminal liability. The provincial fiscal appealed, treating the dismissal as an order sustaining a demurrer.

ISSUE:
1. Whether full payment of the mortgage debt prior to the institution of criminal proceedings extinguishes criminal liability under Section 12 of the Chattel Mortgage Law.
2. Whether the trial court’s dismissal of the information constituted a final judgment on the merits, barring an appeal by the government on grounds of double jeopardy.

RULING:
1. On the substantive issue: The Supreme Court held that full payment of the mortgage debt does not extinguish criminal liability for violating the Chattel Mortgage Law. The penal provision (Section 12) serves not only to protect the mortgagee but also to uphold public interest by deterring wrongful sales of mortgaged property and ensuring the efficacy of chattel mortgage transactions. The penalty prescribeda fine equal to double the value of the property sold (half payable to the mortgagee), imprisonment of up to six months, or bothis discretionary. Courts may impose only imprisonment if a fine would be excessive or cause undue hardship. Thus, the trial court erred in dismissing the case based on the defendant’s payment of the debt.

2. On the procedural issue: The Supreme Court ruled that the trial court’s dismissal was a final judgment on the merits, not a mere order sustaining a demurrer. The case was submitted on an agreed statement of facts after the defendant pleaded not guilty, placing the defendant in jeopardy of conviction. Therefore, the government had no right to appeal, as a reversal and remand for trial would violate the defendant’s right against double jeopardy. The appeal was dismissed, and the trial court’s judgment of acquittal remained in force.

DISPOSITIVE:
The appeal is dismissed for lack of jurisdiction, with costs de oficio. The trial court’s judgment acquitting the defendant stands.