Article 319, Revised Penal Code (RPC) — “Willful and Malicious Removal or Sale of Mortgaged Personal Property” (as amended by Republic Act No. 10951, 2017)
1. Statutory Text
“The penalty of arresto mayor or a fine ranging from ₱40,000 to ₱100,000, or both, shall be imposed upon—
- Any mortgagor of personal property who knowingly removes, or causes the removal of, such property to a province, city, or municipality other than that in which it was located when the chattel mortgage was constituted, without the written consent of the mortgagee, his executors, administrators, or assigns;
- Any mortgagor who sells or pledges any personal property already mortgaged, or any part thereof, without the written consent of the mortgagee, his executors, administrators, or assigns. The same penalty shall be imposed upon any person who knowingly aids or abets the commission of the acts penalized in this article.”
(Before R.A. 10951 the fine was “not exceeding ₱6,000”; the imprisonment range—arresto mayor (1 month 1 day – 6 months)—remains unchanged.)
2. Elements of Each Offense
| Modus | Essential Elements | Key Points / Common Issues |
|---|---|---|
| (a) Unauthorized removal of mortgaged personalty | 1. An existing, duly registered chattel mortgage; 2. Accused is the mortgagor (or an accomplice/abettor); 3. Personal property is knowingly brought to a different locality without the mortgagee’s written consent; 4. Removal is voluntary. |
• “Knowingly” imports awareness of the mortgage’s existence. • Intent to defraud need not be proved (mala prohibita), but good-faith belief that the mortgage was extinguished negates liability. • Venue lies in either the place of removal or where the mortgage was executed. |
| (b) Unauthorized sale or pledge of mortgaged personalty | 1. Same first two elements as above; 2. Accused sells, pledges, or otherwise disposes of the property, in whole or in part; 3. Act is done without prior written consent of the mortgagee. |
• Actual delivery to the buyer/pledgee is not indispensable; a perfected contract of sale suffices. • Execution of a second chattel mortgage in favor of another creditor is treated as a “pledge” for purposes of Art. 319. |
Persons liable: the mortgagor and “any person who knowingly aids or abets” (e.g., a buyer who knows the item is mortgaged yet participates in the sale).
3. Nature of the Crime
- Mala prohibita. Proof of evil intent is immaterial; what the law punishes is the willful doing of the prohibited act, the State’s interest being to protect the mortgagee’s security.
- Public offense. Prosecution may proceed even if the mortgagee no longer complains, although civil compromise can extinguish civil liability.
4. Penalties, Accessories, and Prescription
| Penalty | Range / Notes |
|---|---|
| Imprisonment | Arresto mayor (1 month 1 day – 6 months). Judges still have discretion to impose destierro under Art. 57 when justified. |
| Fine | ₱40,000 – ₱100,000 (R.A. 10951). Court may impose both imprisonment and fine. |
| Civil liability | Return of the chattel or payment of its value + actual damages (Art. 100, RPC). |
| Ancillary | Forfeiture of the chattel in favor of the offended party or—when that is impossible—sale and application of proceeds to the mortgage debt (Art. 104). |
| Prescription | Five (5) years from commission (Art. 90, RPC). Running is interrupted by filing of the complaint or information. |
5. Defenses & Mitigating Circumstances
- Written consent of the mortgagee covering the specific act.
- Extinguishment of the mortgage (full payment or valid release) prior to removal/sale.
- Good faith / honest belief that no subsisting mortgage exists (e.g., mortgagee verbally assured the accused it was cancelled).
- Lack of knowledge of the mortgage—relevant for accomplices or buyers (“buyer in good faith”).
- No actual removal to a different province/city (for the first mode).
- Spontaneous desistance before consummation (possible only for attempted sale/pledge).
6. Comparative Notes
| Article/Statute | Scope | Why Art. 319 Controls or Differs |
|---|---|---|
| Art. 316 (2), RPC – Concealment or encumbrance of real property | Deals with real property or personalty already pledged and owned free of any encumbrance at time of second disposition. | Art. 316 protects subsequent buyers; Art. 319 protects the original mortgagee. |
| Art. 315 (1)(b), RPC – Estafa by misappropriation of pledged property | Requires deceit and damage; heavier penalties when amount exceeds ₱2.4 M (post-R.A. 10951 thresholds). | If the property is mortgaged, prosecution usually elects Art. 319 (special provision) over general estafa. |
| P.D. 1612 (Anti-Fencing Law) | Penalizes a buyer/possessor of stolen property. | Buyer of mortgaged property with knowledge may be charged under Art. 319 instead. |
| Act No. 1508 (Chattel Mortgage Law) | Registration & foreclosure of chattel mortgages; a civil remedy. | Art. 319 adds a criminal sanction to reinforce the civil right. |
7. Leading Philippine Jurisprudence
| Case | G.R. No. / Date | Legal Doctrines & Facts |
|---|---|---|
| People v. Ombao | L-58341, 13 Sept 1988 | Sale of two jeepneys still under mortgage held punishable; oral permission from the mortgagee is insufficient—written consent is indispensable. |
| People v. Cuevo | L-23954, 30 Jan 1974 | “Removal” may consist of driving a mortgaged bus to another province for more than transient trips, defeating the mortgagee’s lien. |
| People v. Feliciano | 68 Phil 243 (1939) | Good-faith belief that the mortgage was already cleared—based on mortgagee’s conduct—acquitted the accused; “knowingly” is an essential qualifier. |
| People v. Dizon | CA-G.R. No. 7825-R, 19 Nov 1954 | Subsequent chattel mortgage in favor of another creditor, without consent, is equivalent to a “pledge” and therefore punishable. |
| People v. Malapit | CA-G.R. No. 49154-R, 22 Feb 1978 | Buyer who learned of the mortgage after the sale but before taking delivery, and still pursued the transaction, became an “abettor” under Art. 319. |
| People v. Menil | L-38674-75, 30 Oct 1982 | Venue can be laid in the place where the unlawful sale was perfected even if delivery occurred elsewhere. |
(Several CA decisions are cited because Art. 319 cases seldom reach the Supreme Court; nevertheless, they remain persuasive.)
8. Procedural & Evidentiary Highlights
- Registration proof. Prosecution must present: (a) the chattel mortgage contract; (b) certificate of registration; (c) affidavit of good faith.
- Written-consent defense. Must be original or certified true copy; private instrument is acceptable but notarization strengthens authenticity.
- Par value rule. Even if the mortgage debt is trivial, unauthorized sale/removal is still punishable; amount affects only civil damages, not criminal liability.
- Corporate mortgagees. When the mortgagee is a bank or financing company, the complaint may be verified by any duly authorized officer (per Rules of Court and BSP regulations).
- Automatic civil indemnity. Courts routinely order the accused to pay the outstanding balance of the loan plus interest until full satisfaction.
9. Practice Tips for Lawyers & Lenders
- Insert stringent “no-sale/removal” clauses and require borrowers to post addresses of intended operations to facilitate proof of element #1.
- Monitor pledged assets (e.g., GPS for vehicles, periodic inventory for equipment) to detect breaches early.
- Secure written waivers/releases upon full payment to protect borrowers from unfounded charges.
- If you are defending: collect evidence of mortgage cancellation, receipts, or any correspondence showing consent or good faith; stress the mala prohibita yet knowledge-based nature of the crime.
10. Frequently Asked Questions
| Question | Answer (Philippine Context) |
|---|---|
| Is verbal permission enough? | No. Article 319 expressly requires written consent. |
| Does partial payment extinguish liability? | Not automatically. Mortgage subsists until full payment or formal release. |
| May the buyer be prosecuted? | Yes—if he knew of the mortgage and still participated, he is deemed to have “knowingly aided or abetted.” |
| Is intent to defraud necessary? | Only the knowledge of the mortgage and willful performance of the prohibited act are required; intent to cause damage is not an element. |
| What if the mortgagee already foreclosed? | If foreclosure was validly consummated before the sale/removal, no crime is committed; otherwise, liability attaches. |
11. Historical Evolution
| Law | Fine | Notable Change |
|---|---|---|
| Act 3815 (RPC, 1930) | ≤ ₱6,000 | Original provision; fines expressed in old pesos (≈ ₱ value pre-war). |
| R.A. 5465 (1968) | Added “municipality” to territorial language. | |
| R.A. 10951 (2017) | ₱40 K – ₱100 K | Overhauled all monetary penalties, aligning them with inflation. |
12. Relationship to Civil/Commercial Remedies
- Foreclosure under Act 1508 remains the primary recourse for default, independent of any criminal case.
- Replevin may be used to recover possession pendente lite.
- Civil Code Arts. 1170–1171: Damages for fraud/negligence may be cumulated with Art. 319 liability.
13. Key Take-Aways
- Always reduce consent to writing—absence of a formal waiver is the single most common cause of prosecution.
- Borrowers should treat mortgaged chattels as “frozen” assets until cleared; removal for legitimate reasons (e.g., repair in another province) must be pre-approved in writing.
- For lenders, early detection and documentation (e.g., demand letters, notices of default) lay a solid foundation for either civil foreclosure or criminal complaint.
- Good faith matters—while Art. 319 is mala prohibita, jurisprudence recognizes honest mistake or belief as a shield.
- Penalties are light but reputational and financial impact is heavy, especially with accompanying civil awards and possible corporate blacklisting.
This material is for legal education and should not be construed as specific legal advice. For case-specific guidance, consult a Philippine lawyer.