Servicewide Specialist, Inc.

, petitioner L - 74553

vs.

Hon. IAC, Galicano Siton and Judge Justiniano De Dumo, respondents.

Facts : Galicano Siton purchased a Mitsubishi Celeste from Car Traders Philippines. The balance of
P 68,400, interest and insurance premiums for the vehicle was paid through a promissory note
in favor of Car Traders on a monthly basis amortization of P 1,900.00 . Siton executed a Chattel
Mortgage over the said vehicle in favor of Car Trader. Car Trader in turn assigned the Chattel
mortgage of Siton to Filinvest Credit which again assigned it to Servicewide Specialist.
Thereafter Siton sold his car to judge Justiniano De Dumo who assumed paying for the
monthly amortization. When failure on the payment of the monthly amortization happend,
Servicewide filed a a petition for Writ of Replevin over the said vehicle. After service of the
summons, De Dumo filed an answer claiming that he has paid religiously .
The trial court denied the issuance of a Writ of Replevin but ordered the defendant to pay
the remaining balance and ordering that a new chattel mortgage be issued with De Dumo as the
mortgagor. The petitioner filed an appeal with the appellate court claiming that the sale of Siton
to De Dumo is invalid for failing to inform the petitioner and for ruling that the petitioner is
obliged to make a demand to De Dumo for payment.

Issue: Whether or not the sale of Siton of his mortgaged vehicle to De Dumo is valid even though
Servicewide was not inform about the sale.

Held : The Court ruled that the sale is valid because a mortgagor continues to be the owner of the
property and has the power to alienate its property as long as the creditor is informed. The
claimed of Servicewide that it was not informed is untenable because they accepted the check
payments of De Dumo. De Dumo informed Filinvest of the sale but was even advised by the
lawyer of Filinvest not to register the sale because it will be convenient if De Dumo will just
pay the amortization.