Filipinas Investment vs Vitug Jr.

, and Supreme Sales and Development Doctrine - Under Art 1484 of the Civil Code, the vendor may only exercise in the alternative the following remedies: a.) exact fulfillment of the obligation; b.) cancel the sale in case the failure to pay covers two or more installments and c.) foreclose the chattel mortgage in case one has been executed over the personalty involved in the case. - However, the provision can admit of some exceptions as in the present case, where it has been expressly stipulated in the assignment that recourse may be had against the seller should the buyer fail to pay for the balance of the obligation. Facts Respondent Vitug bought a four-door Consul sedan for Php 14,605. He executed a promissory note providing for monthly installment payment and at the same time constituted a chattel mortgage over the vehicle. On the same day he assigned his negotiated the promissory note in favor of herein petitioner Filipinas Investment, assigning thereto all his rights, including a right of recourse against co-defendant Supreme Sales. Vitug predictably failed to pay for the car, and petitioner applied for a writ of replevin, but this was negated when Vitug voluntarily surrendered the vehicle. The car was sold in public auction but the proceeds left a balance of Php 8, 349.35, which petitioner now wishes to collect from co-defendant Supreme Sales. Issue 1.) WON petitioner can collect on the balance from Supreme Sales despite the provision of the Recto Law (Art 1484)? Held 1.) YES. The transaction between appellant and appellee was purely an ordinary discounting transaction whereby the promissory note executed by defendant Vitug was negotiated by appellee in favor of appellant for a valuable consideration at a certain discount, accompanied by an assignment also of the chattel mortgage executed by said defendant to secure the payment of his promissory note and with the express stipulation that should there be any deficiency, recourse could be had against appellee. Stated otherwise, the remedy presently being sought is not against the buyer of the car or the defendant Vitug but against the seller, independent of whether or not such seller may have a right of recovery against the buyer, which, in this case, he does not have under the Recto Law.