1. G.R. No.

L-10789 May 28, 1957

AMADOR TAJANLANGIT, ET AL., plaintiff-appellants, vs. SOUTHERN MOTORS, INC., ET AL., defendants-
appellees.

PONENTE: BENGZON, J.:

Facts: The petitioner bought 2 tractors and a thresher for 25K from the respondent on the condition to
pay the said property in an instalment basis. However the petitioner failed to pay the purchase price, and
subsequently the respondent filed a case and levied the execution on the said property sold, and
subsequently bought the subject property in a public auction for 10K. The respondent obtain another writ
of execution for the real properties of the petitioner, herein the latter filed a petition contending that the
obligation was already satisfied because the property sold was returned to the respondent, and that the
respondent was only limited to the proceeds of the sale.

Issue: Whether or not the vendor of a movable on instalment is limited to the proceeds of the sale.

RULING: No, in the sale of movables on instalment the vendor has 3 remedies 1) Exact fulfillment of the
obligation 2) Cancellation of the sale if the buyer failed to pay 2 or more instalment and 3) To foreclose
the chattel mortgage over the good being sold if the buyer failed to pay 2 or more instalments, but this
will bar the seller from further recovery. At the present case since the seller chooses the exact fulfilment
of the obligation the seller may still recover from the other property of the buyer.
2. G.R. No. L-67181 November 22, 1985

SPOUSES RESTITUTO NONATO and ESTER NONATO, petitioners, vs. THE HONORABLE INTERMEDIATE
APPELLATE COURT and INVESTOR'S FINANCE CORPORATION respondents.

PONENTE: ESCOLIN, J.:

FACTS: In 1976, Spouses Restituto Nonato and Ester Nonato purchased a volkswagen from the People’s
Car Inc on installment basis. To secure their complete payment, Nonato executed a promissory note and
a chattel mortgage in favor of People’s Car Inc. Subsequently, People’s Car Inc assigned its rights and

ISSUE: Whether or not a vendor or his assignee, who had cancelled the sale of a motor vehicle for failure
of the buyer to pay two or more of the stipulated installments, may also demand payment of the balance
of the purchase price

RULING: No. The applicable law in the case at bar is Art 1484 which provides that:

In a contract of sale of personal property the price of which is payable in installments, the vendor may
exercise any of the following remedies:

(1) Exact fulfillment of the obligation, should the vendee fail to pay;

(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's
failure to pay cover two or more installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void.
3. G.R. No. L-17384 October 31, 1961

NESTOR RIGOR VDA. DE QUIAMBAO, ET AL., petitioners,

vs. MANILA MOTOR COMPANY, INC., and the HON. COURT OF APPEALS, respondents.

PONENTE: REYES, J.B.L., J.:

Facts: The petitioner bought 2 tractors and a thresher for 25K from the respondent on the condition to
pay the said property in an instalment basis. However the petitioner failed to pay the purchase price, and
subsequently the respondent filed a case and levied the execution on the said property sold, and
subsequently bought the subject property in a public auction for 10K. The respondent obtain another writ
of execution for the real properties of the petitioner, herein the latter filed a petition contending that the
obligation was already satisfied because the property sold was returned to the respondent, and that the
respondent was only limited to the proceeds of the sale.

Issue: Whether or not the vendor of a movable on instalment is limited to the proceeds of the sale.

RULING: No, in the sale of movables on instalment the vendor has 3 remedies 1) Exact fulfillment of the
obligation 2) Cancellation of the sale if the buyer failed to pay 2 or more instalment and 3) To foreclose
the chattel mortgage over the good being sold if the buyer failed to pay 2 or more instalments, but this
will bar the seller from further recovery. At the present case since the seller chooses the exact fulfilment
of the obligation the seller may still recover from the other property of the buyer.
4. G.R. No. L-24772 May 27, 1968

Ruperto G. Cruz, et al., plaintiffs-appellees

vs Filipinas Investment and Finance Corporation, defendant-appellant

Ponente: Reyes

Facts:

This is an appeal by Filipinas from the decision of the CFI of Rizal. In the action of Cruz for the cancellation
of the real estate mortgage constituted on the land of Cruz in favor of Filipinas, the parties submitted the
case for decision on the following facts: Cruz purchased on instalments a diesel bus with a promissory
note to the Far East Motor Corporation. To secure the promissory note, Cruz executed in favor of the
Motor Corporation a chattel mortgage. Since there was no down payment made, Motor Corporation
required Cruz to give additional security by which was given in the form of second mortgage on a parcel
of land and building owned by Felicidad Reyes.Later, Cruz defaulted on the payment of the promissory
note in spite of the demands. Because of default, defendant foreclose the chattel mortgage. The proceeds
of the sale of the bus were not sufficient to cover the expenses of sale, principal obligation, interest and
attorney's fees. Leading to the foreclosure of the land owned by Mrs. Reyes. Mrs. Reyes then on March
20, 1964 wrote a letter to Filipinas asking for the cancellation of the real estate mortgage on her land, but
defendant did not comply with such.

Issue: Whether or not Filipinas may foreclose the real estate mortgage.

RULING:

should the vendee or purchaser of a personal property default in the payment of two or more of the
agreed instalments, the vendor or seller has the option to avail of any one of these three remedies —
either to exact fulfilment by the purchaser of the obligation, or to cancel the sale, or to foreclose the
mortgage on the purchased personal property, if one was constituted. These remedies have been
recognized as alternative, not cumulative, that the exercise of one would bar the exercise of the others.
It may also be stated that the established rule is to the effect that the foreclosure and actual sale of a
mortgaged chattel bars further recovery by the vendor of any balance on the purchaser's outstanding
obligation not so satisfied by the sale.
5. G.R. No. L-39806 January 27, 1983

LUIS RIDAD and LOURDES RIDAD, plaintiffs-appellees,

vs. FILIPINAS INVESTMENT and FINANCE CORPORATION, JOSE D. SEBASTIAN and JOSE SAN AGUSTIN, in
his capacity as Sheriff, defendants-appellants.

PONENTE: DE CASTRO, J:

Facts: The spouses Ridad purchased from the Supreme Sales Development Corporation two (2) brand new
Ford Consul Sedans complete with accessories. To secure payment thereof, plaintiffs executed on the
same date a promissory note covering the purchase price and a deed of chattel mortgage not only on the
two vehicles purchased but also on another car (Chevrolet) and their franchise or certificate of public
convenience granted by the defunct Public Service Commission for the operation of a taxi fleet with
Filipinas Investment.

Issue: Whether Filipinas Investment is precluded from foreclosing the second mortgage to recover the
deficiency on the first mortgage

RULING: No. The vendor of personal property sold on the installment basis is precluded, after foreclosing
the chattel mortgage on the thing sold from having a recourse against the additional security put up by a
third party to guarantee the purchaser’s performance of his obligation on the theory that to sustain the
same would overlook the fact that if the guarantor should be compelled to pay the balance of the
purchase price, said guarantor will in turn be entitled to recover what he has paid from the debtor-vendee,
and ultimately it will be the latter who will be made to bear the payment of the of the balance of the price,
despite the earlier foreclosure of the chattel mortgage given by him, thereby indirectly subverting the
protection given the latter.
6. G.R. No. L-30583 October 23, 1982

EUTROPIO ZAYAS, JR., petitioner,

vs.

LUNETA MOTOR COMPANY and HONORABLE JUAN O. REYES, Presiding Judge of the Court of First Instance
of Manila, Branch XXI, respondents.

PONENTE: GUTIERREZ, JR., J.:

Eutropio Zayas, Jr, purchased on installment basis a motor vehicle from Mr. RoqueEscaño of the Escaño
Enterprises in Cagayan de Oro City, dealer of respondent Luneta MotorCompany , under the following
terms and conditions:Selling priceP7,500.00Financing chargeP1,426.82 Total Selling
PriceP8,926.82Payable on DeliveryP1,006.82Payable in 24 months at 12% interest per annumP7,920.00
The motor vehicle was delivered to the petitioner who paid the initial payment in theamount of P1,006.82,
and executed a promissory note in the amount of P7,920.00, thebalance of the total selling price, in favor
of respondent Luneta Motor Company. Thepromissory note stated the amounts and dates of payment of
26 installments covering theP7,920.00 debt.

Issue: whether or not a deficiency amount after the motor vehicle, subject of the chattelmortgage, has
been sold at public auction could still be recovered by respondent company

RULING:

No. The main defense of respondent Luneta Motor Company is that EscañoEnterprises, Cagayan de Oro
City from which petitioner Zayas, Jr. purchased the subjectmotor vehicle was a distinct and different
entity; that the role of Luneta Motor Company inthe said transaction was only to finance the purchase
price of the motor vehicle; and that inorder to protect its interest as regards the promissory note executed
in its favor, a chattelmortgage covering the same motor vehicle was also executed by petitioner Zayas, Jr.
Inshort, respondent Luneta Motor Company maintains that the contract between the companyand the
petitioner was only an ordinary loan removed from the coverage of Article 1484 of the New Civil Code.
This is untenable. The Escaño Enterprises of Cagayan de Oro City was an agent of LunetaMotor Company.
Avery significant evidence which proves the nature of the relationshipbetween Luneta Motor Company
and Escaño Enterprises is Annex “A” of the petitioner’sOpposition to Urgent Motion for Reconsideration.
Annex “A” is a Certification from thecashier of Escaño Enterprises on the monthly installments paid by
Zayas, Jr. In thecertification, the promissory note in favor of Luneta Motor Company was
specificallymentioned. There was Escaño Enterprises, a dealer of respondent Luneta Motor Company
7. G.R. No. L-28074 May 29, 1970

NORTHERN MOTORS, INC., plaintiff-appellant,

vs.

CASIANO SAPINOSO and "JOHN DOE", defendants-appellees.

PONENTE: VILLAMOR, J.:

FACTS

Casiano Sapinoso purchased an Opel Kadett from Norther motors for P12,171, with DP and promissory
note for P10,540, payable in instalments A chattel mortgage was executed, which provided that upon
default by the Sapinoso in the payment of any part of the principal or interest due, Northern Motors may
elect any of the following remedies, with waiver of reimbursement of amouts already paid:

(a) sale of the car by the mortgagee;

(b) cancellation of the contract of sale;

(c) extrajudicial foreclosure;

(d) judicial foreclosure;

(e) ordinary civil action to exact fulfillment of the mortgage contract

ISSUE: Whether or not Northern Motors was barred from recovering the balance upon filing of the writ of

Replevin

RULING: NO. The lower court erred in concluding that the legal effect of the filing of the action was to

bar Northern Motors from accepting further payments on the promissory note. That the ultimate object
of the action is the foreclosure of the chattel mortgage, is of no moment, for it is the fact of foreclosure
and actual sale of the mortgaged chattel that bar further recovery by the vendor of any balance on the
purchaser's outstanding obligation not satisfied by the sale.
8. G.R. No. L-43683 July 16, 1937

MACONDRAY AND CO., INC., plaintiff-appellant,

vs.

URBANO EUSTAQUIO, defendant-appellee.

PONENTE: IMPERIAL, J.

Facts:

Macondray & Co. Inc. sold Urbano Eustaquio a De Soto car, Sedan, for the price of which, P595, he
executed in its favor the note of 22 May 1934. Under the note, Eustaquio undertook to pay the car in 12
monthly installments with 12% interest per annum, likewise agreed that, should he fail to pay any monthly
installment together with interest, the remaining installments would become due and payable, and
Eustaquio shall pay 20% upon the principal owing as attorney’s fees, expenses of collection which the
plaintiff might incur, and the costs.
9. G.R. No. L-27645 November 28, 1969

FILIPINAS INVESTMENT & FINANCE CORPORATION, plaintiff-appellee,

vs.

LOURDES V. RIDAD and LUIS RIDAD, defendants-appellants.

PONENTE: CASTRO, J.:

Facts: The spouses Ridad purchased from the Supreme Sales Development Corporation two (2) brand new
Ford Consul Sedans complete with accessories. To secure payment thereof, plaintiffs executed on the
same date a promissory note covering the purchase price and a deed of chattel mortgage not only on the
two vehicles purchased but also on another car (Chevrolet) and their franchise or certificate of public
convenience granted by the defunct Public Service Commission for the operation of a taxi fleet with
Filipinas Investment.

Issue: Whether Filipinas Investment is precluded from foreclosing the second mortgage to recover the
deficiency on the first mortgage

RULING: No. The vendor of personal property sold on the installment basis is precluded, after foreclosing
the chattel mortgage on the thing sold from having a recourse against the additional security put up by a
third party to guarantee the purchaser’s performance of his obligation on the theory that to sustain the
same would overlook the fact that if the guarantor should be compelled to pay the balance of the
purchase price, said guarantor will in turn be entitled to recover what he has paid from the debtor-vendee,
and ultimately it will be the latter who will be made to bear the payment of the of the balance of the price,
despite the earlier foreclosure of the chattel mortgage given by him, thereby indirectly subverting the
protection given the latter.
10. G.R. No. 82508 September 29, 1989

FILINVEST CREDIT CORPORATION, petitioner,

vs. THE COURT OF APPEALS, JOSE SY BANG and ILUMINADA TAN SY BANG,*respondents.

PONENTE: SARMIENTO, J.

Facts: Spouses Edilberto and Marciana Tadiaman, purchased a 10-wheeler Izusu cargo truck from Jordan
Enterprises, Inc., in Quezon City, in installments. Said spouses executed a promissory note payable in 24
monthly installments in favor of Jordan Enterprises, Inc., and a Chattel Mortgage over the motor vehicle
purchased to secure the payment of the promissory note. -Jordan Enterprises, Inc. assigned its rights and
interests over the said instruments to Filinvest Finance and Leasing Corporation, which in turn assigned
them to plaintiff-appellant Filinvest Credit Corporation.

Issue: Whether or not Filinvest is liable for damages in taking the car.

RULING: The law places the responsibility of conducting the sale upon “a public officer;” and it might be
supposed that an officer, such as the sheriff, can seize the property where the creditor could not. This
suggestion is, we think, without force, as it is manifest that the sheriff or other officer proceeding under
the authority of the language already quoted from section 14 of the Chattel Mortgage Law, becomes pro
hac vice the mere agent of the creditor. There is nothing in this provision which creates a specific duty on
the part of the officer to seize the mortgaged property; and no intention on the part of the law-making
body to impose such a duty can be implied. The conclusion is clear that for the recovery of possession,
where the right is disputed, the creditor must proceed along the usual channels by action in court.
Whether the sheriff, upon being indemnified by the creditor, could safely proceed to take the property
from the debtor, is a point upon which we express no opinion.