GR 116363; (December, 1999) (Digest)
G.R. No. 116363 December 10, 1999
SERVICEWIDE SPECIALISTS, INCORPORATED, petitioner, vs. THE HON. COURT OF APPEALS, JESUS PONCE, and ELIZABETH PONCE, respondents.
FACTS
Respondent spouses Ponce purchased a vehicle from C.R. Tecson Enterprises in 1975, executing a promissory note and a chattel mortgage. The credit was assigned to Filinvest Credit Corporation with the spouses’ conformity. In 1976, the spouses sold the vehicle to Conrado Tecson by way of a Deed of Sale with Assumption of Mortgage. In 1978, Filinvest assigned its rights under the note and mortgage to petitioner Servicewide Specialists, Inc., without notice to the spouses. Due to the spouses’ default in payments from October 1977 to March 1978, petitioner filed a complaint for replevin.
The spouses denied liability, asserting they had already returned the car to Conrado Tecson. They filed a third-party complaint against him for reimbursement. The trial court held the spouses solidarily liable to petitioner but ordered Tecson to reimburse them. The Court of Appeals reversed, ruling the spouses were not liable because they were not notified of the assignment of the credit to petitioner.
ISSUE
Whether the debtor-mortgagor’s alienation of the mortgaged property without the consent of the creditor’s assignee releases the debtor from liability to said assignee.
RULING
The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision. The legal logic distinguishes between the assignment of credit and the alienation of mortgaged property. For an assignment of credit to bind the debtor, only notice—not consent—is required under Article 1626 of the Civil Code. This article protects a debtor who pays the original creditor before learning of the assignment; it does not excuse non-payment after learning of it. Here, the spouses’ defense of non-notification is irrelevant as they did not make any payment after the assignment.
Conversely, for the alienation of mortgaged property to bind the creditor or his assignee, the creditor’s consent is necessary. Applying provisions on pledge by analogy to chattel mortgage, Article 2096 of the Civil Code requires the pledgee’s consent for the alienation of the pledged thing. Since the assignee steps into the shoes of the original creditor-mortgagee, its consent is required to bind it to the debtor’s subsequent alienation. The spouses’ sale to Tecson in 1976 occurred before the 1978 assignment to petitioner. Therefore, the spouses were required to obtain the consent of Filinvest, the creditor at the time of the sale. Their failure to do so rendered the alienation not binding upon Filinvest or its assignee, petitioner. Consequently, the spouses remained liable to petitioner for the unpaid obligation secured by the chattel mortgage.