G.R. No. L-45662; April 26, 1939
ENRIQUE CLEMENTE, plaintiff-appellee, vs. DIONISIO GALVAN, defendant-appellee. JOSE ECHEVARRIA, intervenor-appellant.

FACTS

Plaintiff Enrique Clemente and defendant Dionisio Galvan organized a partnership, “Galvan y Compañia.” Clemente sued for its dissolution and accounting. A receiver was appointed. To avoid attachment and sale of partnership machines to satisfy Clemente’s personal judgments in other cases, Clemente executed a mortgage deed (Exhibit B) in favor of his nephew, intervenor-appellant Jose Echevarria, over machines described as located on Singalong Street. The actual partnership machines were located on Ylaya Street and in the receiver’s custody. Echevarria obtained a judgment on the mortgage but could not attach the machines due to the receiver’s opposition. He then intervened in this case to enforce his mortgage credit.

ISSUE

Whether the mortgage executed by Clemente in favor of Echevarria over the partnership machines is valid and enforceable.

RULING

No. The Supreme Court affirmed the lower court’s judgment declaring the mortgage null and void. Clemente could not validly mortgage the machines because: (1) He never had actual possession of them—they were in the receiver’s (custodia legis) and later defendant’s control; (2) The machines belonged to the partnership, not to Clemente individually, pending liquidation; and (3) The deed of mortgage described machines at a different location (Singalong Street) than where the partnership machines actually were (Ylaya Street). A private supplementary document could not alter the terms of the public mortgage deed. The mortgage was invalid.

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