GR 12320; (September, 1917) (Digest)
G.R. No. 12320 ; September 12, 1917
THE UNITED STATES, plaintiff-appellee, vs. VICENTE IGUIDEZ, defendant-appellant.
FACTS:
The defendant, Vicente Iguidez, was convicted in the lower court for violating Sections 10 and 12 of Act No. 1508 , the Chattel Mortgage Law. The information alleged that on or about May 23, 1914, in Iloilo, Iguidez, as mortgagor, sold three calesas and six horses to third parties without the consent of the mortgagee, Erwin F. Koch, despite knowing the property was mortgaged to secure a loan of P600. The sale was made without the written consent of the mortgagee endorsed on the mortgage document or noted on its margin in the recording office, as required by law. After the criminal proceedings were instituted but before trial, Iguidez paid the mortgage debt in full, including stipulated interest and attorney’s fees. On appeal, he argued that payment extinguished his criminal liability and that the sale of only part of the mortgaged property did not harm the mortgagee’s interests, as the remaining property sufficed to secure the debt.
ISSUE:
Whether the accused’s criminal liability for violating the Chattel Mortgage Law is extinguished by full payment of the mortgage debt after the commission of the offense.
RULING:
No. The Supreme Court affirmed the conviction but modified the penalty. The Court held that payment of the mortgage debt after the unlawful sale does not absolve the mortgagor of criminal liability under the Chattel Mortgage Law. The penal provisions aim not merely to protect the mortgagee in individual cases but to sanction the statute in the public interest, deterring violations and protecting creditors generally from wrongful disposal of mortgaged property. The Court also rejected the argument that selling only part of the mortgaged property is not penal if the remainder secures the debt, emphasizing that any unauthorized sale while the debt is unpaid violates the law, as the creditor is entitled to the full security until the obligation is fully performed. The trial court’s imposition of an alternative penalty (fine or imprisonment) was erroneous, as the law prescribes a fine, imprisonment, or both. Considering the circumstances, the Supreme Court modified the sentence to one month of imprisonment.
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