G.R. No.

L-2412 April 11, 1906

PEDRO ROMAN vs. ANDRES GRIMALT

FACTS
On July 2, 1904, petitioner Roman filed a complaint in against
respondent Grimalt. It was alleged that between the 13th and the 23rd
day of June, 1904, both parties, through Pastor, verbally agreed upon
the sale of the said schooner; that the defendant in a letter had agreed to
purchase the said schooner and of offered to pay therefor in three
installment of 500 pesos; adding in his letter that if the plaintiff accepted
the plan of payment suggested by him the sale would become effective
on the following day; that plaintiff had notified the defendant through
Pastor that he accepted the plan of payment suggested by him and that
from that date the vessel was at his disposal, and offered to deliver the
same at once to defendant if he so desired. However, the vessel was
sunk on June 25, in the harbor of Manila as a result of a severe storm.
On the June 30 demand was made upon the defendant for the payment,
yet the latter failed to pay.
Defendant however alleged plaintiff personally proposed to the
sale of the said vessel, stating that the vessel belonged to him; that
defendant accepted the offer of sale on condition that the title papers
were found to be satisfactory, also that the vessel was in a seaworthy
condition. Defendant insisted that he would buy the vessel only when the
title papers were perfected since it was shown that plaintiff did not
perfect his title upon the vessel, and that the vessel be duly inspected.
Defendant also denied the other allegations, that the purchase
price and method of payment had been agreed upon; that the vessel
was ready for delivery to the purchaser and that an attempt had been
made to deliver the same, but admitted, however, the allegations
contained in the last part of the said paragraph.
ISSUE: WON a contract of sale had been perfected as to allow recovery
from defendant
HELD
The court held that the sale of the schooner was not perfected
and the purchaser did not consent to the execution of the deed of
transfer for the reason that the title of the vessel was in the name of one
Paulina Giron and not in the name of Pedro Roman, the alleged owner.
Despite promise, Roman failed to perfect his title to the vessel and
papers presented by him did not show that he was the owner of the
vessel.
If no contract of sale was actually executed by the parties the
loss of the vessel must be borne by its owner and not by a party who
only intended to purchase it and who was unable to do so on account of
failure on the part of the owner to show proper title to the vessel and thus
enable them to draw up the contract of sale.
The defendant was under no obligation to pay the price of the
vessel, the purchase of which had not been concluded. The
conversations had between the parties and the letter written by
defendant to plaintiff did not establish a contract sufficient in itself to
create reciprocal rights between the parties.



G.R. No. 91029 February 7, 1991
NORKIS DISTRIBUTORS, INC., vs. CA & ALBERTO NEPALES

FACTS
Subject of this petition for review is the decision of the Court of
Appeals (Seventeenth Division) in CA-G.R. No. 09149, affirming with
modification the judgment of the Regional Trial Court, Sixth (6th) Judicial
Region, Branch LVI. Himamaylan, Negros Occidental, in Civil Case No.
1272, which was private respondent Alberto Nepales' action for specific
performance of a contract of sale with damages against petitioner Norkis
Distributors, Inc.
The facts borne out by the record are as follows:
Petitioner Norkis Distributors, Inc. is the distributor of Yamaha
motorcycles in Negros Occidental with office in Bacolod City with Avelino
Labajo as its Branch Manager. On September 20, 1979, private
respondent Alberto Nepales bought from the Norkis-Bacolod branch a
brand new Yamaha Wonderbike motorcycle then displayed in the Norkis
showroom. The price of P7,500.00 was payable by means of a Letter of
Guaranty from the Development Bank of the Philippines (DBP), which
Norkis' Branch Manager Labajo agreed to accept. Hence, credit was
extended to Nepales for the price of the motorcycle payable by DBP
upon release of his motorcycle loan. As security for the loan, Nepales
would execute a chattel mortgage on the motorcycle in favor of DBP.
Branch Manager Labajo issued Norkis Sales Invoice No. 0120 (Exh.1)
showing that the contract of sale of the motorcycle had been perfected.
Nepales signed the sales invoice to signify his conformity with the terms
of the sale. In the meantime, however, the motorcycle remained in
Norkis' possession.
On November 6, 1979, the motorcycle was registered in the Land
Transportation Commission in the name of Alberto Nepales. A
registration certificate (Exh. 2) in his name was issued by the Land
Transportation Commission on November 6, 1979 (Exh. 2-b). The
registration fees were paid by him, evidenced by an official receipt,
Exhibit 3.
On January 22, 1980, the motorcycle was delivered to a certain Julian
Nepales who was allegedly the agent of Alberto Nepales but the latter
denies it (p. 15, t.s.n., August 2, 1984). The record shows that Alberto
and Julian Nepales presented the unit to DBP's Appraiser-Investigator
Ernesto Arriesta at the DBP offices in Kabankalan, Negros Occidental
Branch (p. 12, Rollo). The motorcycle met an accident on February 3,
1980 at Binalbagan, Negros Occidental. An investigation conducted by
the DBP revealed that the unit was being driven by a certain Zacarias
Payba at the time of the accident (p. 33, Rollo). The unit was a total
wreck (p. 36, t.s.n., August 2,1984; p. 13, Rollo), was returned, and
stored inside Norkis' warehouse.
On March 20, 1980, DBP released the proceeds of private respondent's
motorcycle loan to Norkis in the total sum of P7,500. As the price of the
motorcycle later increased to P7,828 in March, 1980, Nepales paid the
difference of P328 (p. 13, Rollo) and demanded the delivery of the
motorcycle. When Norkis could not deliver, he filed an action for specific
performance with damages against Norkis in the Regional Trial Court of
Himamaylan, Negros Occidental, Sixth (6th) Judicial Region, Branch LVI,
where it was docketed as Civil Case No. 1272. He alleged that Norkis
failed to deliver the motorcycle which he purchased, thereby causing him
damages.
Norkis answered that the motorcycle had already been delivered to
private respondent before the accident, hence, the risk of loss or
damage had to be borne by him as owner of the unit.
After trial on the merits, the lower court rendered a decision dated
August 27, 1985 ruling in favor of private respondent (p. 28, Rollo.) thus:
WHEREFORE, judgment is rendered in favor of the
plaintiff and against the defendants. The defendants
are ordered to pay solidarity to the plaintiff the
present value of the motorcycle which was totally
destroyed, plus interest equivalent to what the
Kabankalan Sub-Branch of the Development Bank
of the Philippines will have to charge the plaintiff on
fits account, plus P50.00 per day from February 3,
1980 until full payment of the said present value of
the motorcycle, plus P1,000.00 as exemplary
damages, and costs of the litigation. In lieu of
paying the present value of the motorcycle, the
defendants can deliver to the plaintiff a brand-new
motorcycle of the same brand, kind, and quality as
the one which was totally destroyed in their
possession last February 3, 1980. (pp. 28-29,Rollo.)
On appeal, the Court of appeals affirmed the appealed judgment on
August 21, 1989, but deleted the award of damages "in the amount of
Fifty (P50.00) Pesos a day from February 3, 1980 until payment of the
present value of the damaged vehicle" (p35, Rollo). The Court of
Appeals denied Norkis' motion for reconsideration. Hence, this Petition
for Review.
The principal issue in this case is who should bear the loss of the
motorcycle. The answer to this question would depend on whether there
had already been a transfer of ownership of the motorcycle to private
respondent at the time it was destroyed.
Norkis' theory is that:
. . . After the contract of sale has been perfected
(Art. 1475) and even before delivery, that is, even
before the ownership is transferred to the vendee,
the risk of loss is shifted from the vendor to the
vendee. Under Art. 1262, the obligation of the
vendor to deliver a determinate thing becomes
extinguished if the thing is lost by fortuitous event
(Art. 1174), that is, without the fault or fraud of the
vendor and before he has incurred in delay (Art. 11
65, par. 3). If the thing sold is generic, the loss or
destruction does not extinguish the obligation (Art.
1263). A thing is determinate when it is particularly
designated or physically segregated from all others
of the same class (Art. 1460). Thus, the vendor
becomes released from his obligation to deliver the
determinate thing sold while the vendee's obligation
to pay the price subsists. If the vendee had paid the
price in advance the vendor may retain the same.
The legal effect, therefore, is that the vendee
assumes the risk of loss by fortuitous event (Art.
1262) after the perfection of the contract to the time
of delivery. (Civil Code of the Philippines, Ambrosio
Padilla, Vol. 5,1987 Ed., p. 87.)
Norkis concedes that there was no "actual" delivery of the vehicle.
However, it insists that there was constructive delivery of the unit upon:
(1) the issuance of the Sales Invoice No. 0120 (Exh. 1) in the name of
the private respondent and the affixing of his signature thereon; (2) the
registration of the vehicle on November 6, 1979 with the Land
Transportation Commission in private respondent's name (Exh. 2); and
(3) the issuance of official receipt (Exh. 3) for payment of registration
fees (p. 33, Rollo).
That argument is not well taken. As pointed out by the private
respondent, the issuance of a sales invoice does not prove transfer of
ownership of the thing sold to the buyer. An invoice is nothing more than
a detailed statement of the nature, quantity and cost of the thing sold and
has been considered not a bill of sale (Am. Jur. 2nd Ed., Vol. 67, p. 378).
In all forms of delivery, it is necessary that the act of delivery whether
constructive or actual, be coupled with the intention of delivering the
thing. The act, without the intention, is insufficient (De Leon, Comments
and Cases on Sales, 1978 Ed., citing Manresa, p. 94).
When the motorcycle was registered by Norkis in the name of private
respondent, Norkis did not intend yet to transfer the title or ownership to
Nepales, but only to facilitate the execution of a chattel mortgage in favor
of the DBP for the release of the buyer's motorcycle loan. The Letter of
Guarantee (Exh. 5) issued by the DBP, reveals that the execution in its
favor of a chattel mortgage over the purchased vehicle is a pre-requisite
for the approval of the buyer's loan. If Norkis would not accede to that
arrangement, DBP would not approve private respondent's loan
application and, consequently, there would be no sale.
In other words, the critical factor in the different modes of effecting
delivery, which gives legal effect to the act, is the actual intention of the
vendor to deliver, and its acceptance by the vendee. Without that
intention, there is no tradition (Abuan vs. Garcia, 14 SCRA 759).
In the case of Addison vs. Felix and Tioco (38 Phil. 404, 408), this Court
held:
The Code imposes upon the vendor the obligation
to deliver the thing sold. The thing is considered to
be delivered when it is "placed in the hands and
possession of the vendee." (Civil Code, Art. 1462).
It is true that the same article declares that the
execution of a public instrument is equivalent to the
delivery of the thing which is the object of the
contract, but, in order that this symbolic delivery
may produce the effect of tradition, it is necessary
that the vendor shall have had such control over the
thing sold that, at the moment of the sale, its
material delivery could have been made. It is not
enough to confer upon the purchaser
the ownership and the right of possession. The
thing sold must be placed in his control. When there
is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the
sole will of the vendor, symbolic delivery through
the execution of a public instrument is sufficient.
But if notwithstanding the execution of the
instrument, the purchaser cannot have the
enjoyment and material tenancy of the thing and
make use of it himself or through another in his
name, because such tenancy and enjoyment are
opposed by the interposition of another will, then
fiction yields to reality-the delivery has riot been
effects .(Emphasis supplied.)
The Court of Appeals correctly ruled that the purpose of the execution of
the sales invoice dated September 20, 1979 (Exh. B) and the registration
of the vehicle in the name of plaintiff-appellee (private respondent) with
the Land Registration Commission (Exhibit C) was not to transfer to
Nepales the ownership and dominion over the motorcycle, but only to
comply with the requirements of the Development Bank of the
Philippines for processing private respondent's motorcycle loan. On
March 20, 1980, before private respondent's loan was released and
before he even paid Norkis, the motorcycle had already figured in an
accident while driven by one Zacarias Payba. Payba was not shown by
Norkis to be a representative or relative of private respondent. The
latter's supposed relative, who allegedly took possession of the vehicle
from Norkis did not explain how Payba got hold of the vehicle on
February 3, 1980. Norkis' claim that Julian Nepales was acting as
Alberto's agent when he allegedly took delivery of the motorcycle (p. 20,
Appellants' Brief), is controverted by the latter. Alberto denied having
authorized Julian Nepales to get the motorcycle from Norkis Distributors
or to enter into any transaction with Norkis relative to said motorcycle. (p.
5, t.s.n., February 6, 1985). This circumstances more than amply rebut
the disputable presumption of delivery upon which Norkis anchors its
defense to Nepales' action (pp. 33-34, Rollo).
Article 1496 of the Civil Code which provides that "in the absence of an
express assumption of risk by the buyer, the things sold remain at
seller's risk until the ownership thereof is transferred to the buyer," is
applicable to this case, for there was neither an actual nor constructive
delivery of the thing sold, hence, the risk of loss should be borne by the
seller, Norkis, which was still the owner and possessor of the motorcycle
when it was wrecked. This is in accordance with the well-known doctrine
of res perit domino.
WHEREFORE, finding no reversible error in the decision of the Court of
Appeals in CA-G.R. No. 09149, we deny the petition for review and
hereby affirm the appealed decision, with costs against the petitioner.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-14475 May 30, 1961
SOUTHERN MOTORS, INC., plaintiff-appellee,
vs.
ANGELO MOSCOSO, defendant-appellant.
Diosdado Garingalao for plaintiff-appellee.
Calixto Zaldivar for defendant-appellant.
PAREDES, J.:
The case was submitted on agreed statement of facts.
On June 6, 1957, plaintiff-appellee Southern Motors, Inc. sold to
defendant-appellant Angel Moscoso one Chevrolet truck, on installment
basis, for P6,445.00. Upon making a down payment, the defendant
executed a promissory note for the sum of P4,915.00, representing the
unpaid balance of the purchase price (Annex A, complaint), to secure the
payment of which, a chattel mortgage was constituted on the truck in
favor of the plaintiff (Annex B). Of said account of P4,915.00, the
defendant had paid a total of P550.00, of which P110.00 was applied to
the interest up to August 15, 1957, and P400.00 to the principal, thus
leaving an unpaid balance of P4,475.00. The defendant failed to pay 3
installments on the balance of the purchase price.
On November 4, 1957, the plaintiff filed a complaint against the
defendant, to recover the unpaid balance of the promissory note. Upon
plaintiff's petition, embodied in the complaint, a writ of attachment was
issued by the lower court on the properties Of the defendant. Pursuant
thereto, the said Chevrolet truck, and a house and lot belonging to
defendant, were attached by the Sheriff of San Jose, Antique, where
defendant was residing on November 25, 1957, and said truck was
brought to the plaintiff's compound in Iloilo City, for safe keeping.
After attachment and before the trial of the case on the merits, acting
upon the plaintiff's motion dated December 23, 1957, for the immediate
sale of the mortgaged truck, the Provincial Sheriff of Iloilo on January 2,
1958, sold the truck at public auction in which plaintiff itself was the only
bidder for P1,000.00. The case had not been set for hearing, then.
The trial court on March 27, 1958, condemned the defendant to pay the
plaintiff the amount of P4,475.00 with interest at the rate of 12% per
annum from August 16, 1957, until fully paid, plus 10% thereof as
attorneys fees and costs against which defendant interposed the present
appeal, contending that the trial court erred
(1) In not finding that the attachment caused to be levied on
the truck and its immediate sale at public auction, was
tantamount to the foreclosure of the chattel mortgage on said
truck; and
(2) In rendering judgment in favor of the plaintiff-appellee.
Both parties agreed that the case is governed by Article 1484 of the new
Civil Case, which provides:
ART. 1484. 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.
While the appellee claims that in filing the complaint, demanding
payment of the unpaid balance of the purchase price, it has availed of
the first remedy provided in said article i.e. to exact fulfillment of the
obligation (specific performance); the appellant, on the other hand,
contends that appellee had availed itself of the third remedy viz, the
foreclosure of the chattel mortgage on the truck.
The appellant argues that considering history of the law, the
circumstances leading to its enactment, the evil that the law was
intended to correct and the remedy afforded (Art. 1454-A of the old Civil
Code; Act No. 4122; Bachrach Motor Co. vs. Reyes, 62 Phil. 461, 466-
469); that the appellee did not content itself by waiting for the judgment
on the complaint and then executed the judgment which might be
rendered in its favor, against the properties of the appellant; that the
appellee obtained a preliminary attachment on the subject of the chattel
mortgage itself and caused said truck to be sold at public auction
petition, in which he was bidder for P1,000.00; the result of which, was
similar to what would have happened, had it foreclosed the mortgage
pursuant to the provisions of Sec. 14 of Act No. 1508 (Chattel Mortgage
Law) the said appellee had availed itself of the third remedy aforequoted.
In other words, appellant submits that the matter should be looked at, not
by the allegations in the complaint, but by the very effect and result of
the procedural steps taken and that appellee tried to camouflage its acts
by filing a complaint purportedly to exact the fulfillment of an obligation
petition, in an attempt to circumvent the provisions of Article 1484 of the
new Civil Code. Appellant concludes that under his theory, a deficiency
judgment would be without legal basis.
We do not share the views of the appellant on this matter. Manifestly, the
appellee had chosen the first remedy. The complaint is an ordinary civil
action for recovery of the remaining unpaid balance due on the
promissory note. The plaintiff had not adopted the procedure or methods
outlined by Sec. 14 of the Chattel Mortgage Law but those prescribed for
ordinary civil actions, under the Rules of Court. Had appellee elected the
foreclosure, it would not have instituted this case in court; it would not
have caused the chattel to be attached under Rule 59, and had it sold at
public auction, in the manner prescribed by Rule 39. That the herein
appellee did not intend to foreclose the mortgage truck, is further evinced
by the fact that it had also attached the house and lot of the appellant at
San Jose, Antique. In the case of Southern Motors, Inc. vs. Magbanua,
G.R. No. L-8578, Oct. 29, 1956, we held:
By praying that the defendant be ordered to pay it the sum of
P4,690.00 together with the stipulated interest of 12% per
annum from 17 March 1954 until fully paid, plus 10% of the
total amount due as attorney's fees and cost of collection, the
plaintiff elected to exact the fulfillment of the obligation, and
not to foreclose the mortgage on the truck. Otherwise, it would
not have gone to court to collect the amount as prayed for in
the complaint. Had it elected to foreclose the mortgage on the
truck, all the plaintiff had to do was to cause the truck to be
sold at public auction pursuant to section 14 of the Chattel
Mortgage Law. The fact that aside from the mortgaged truck,
another Chevrolet truck and two parcels of land belonging to
the defendant were attached, shows that the plaintiff did not
intend to foreclose the mortgage.
As the plaintiff has chosen to exact the fulfillment of the
defendant's obligation, the former may enforce execution of
the judgment rendered in its favor on the personal and real
property of the latter not exempt from execution sufficient to
satisfy the judgment. That part of the judgment against the
properties of the defendant except the mortgaged truck and
discharging the writ of attachment on his other properties is
erroneous.
We perceive nothing unlawful or irregular in appellee's act of attaching
the mortgaged truck itself. Since herein appellee has chosen to exact the
fulfillment of the appellant's obligation, it may enforce execution of the
judgment that may be favorably rendered hereon, on all personal and
real properties of the latter not exempt from execution sufficient to satisfy
such judgment. It should be noted that a house and lot at San Jose,
Antique were also attached. No one can successfully contest that the
attachment was merely an incident to an ordinary civil action. (Sections 1
& 11, Rule 59; Sec. 16, Rule 39). The mortgage creditor may recover
judgment on the mortgage debt and cause an execution on the
mortgaged property and may cause an attachment to be issued and
levied on such property, upon beginning his civil action (Tizon vs.
Valdez, 48 Phil. 910-911).
IN VIEW HEREOF, the judgment appealed from hereby is affirmed, with
costs against the defendant-appellant.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Dizon, De Leon
and Natividad, JJ., concur.
Reyes, J.B.L., J., concurs in a separate opinion.
Padilla and Barrera, JJ., took no part.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-27862 November 20, 1974
LORENZO PASCUAL and LEONILA TORRES, plaintiffs-appellees,
vs.
UNIVERSAL MOTORS CORPORATION, defendant-appellant.
Cesar C. Peralejo for plaintiffs-appellees.
Francisco Carreon & Renato E. Taada for defendant-appellant.

MAKALINTAL, C.J.:p
In the lower court the parties entered into the following stipulation of
facts:
1. That the plaintiffs executed the real estate
mortgage subject matter of this complaint on
December 14, 1960 to secure the payment of the
indebtedness of PDP Transit, Inc. for the purchase
of five (5) units of Mercedez Benz trucks under
invoices Nos. 2836, 2837, 2838, 2839 and 2840
with a total purchase price or principal obligation of
P152,506.50 but plaintiffs' guarantee is not to
exceed P50,000.00 which is the value of the
mortgage.
2. That the principal obligation of P152,506.50 was
to bear interest at 1% a month from December 14,
1960.
3. That as of April 5, 1961 with reference to the two
units mentioned above and as of May 22, 1961 with
reference to the three units, PDP Transit, Inc.,
plaintiffs' principal, had paid to the defendant
Universal Motors Corporation the sum of
P92,964.91, thus leaving a balance of P68,641.69
including interest due as of February 8, 1965.
4. That the aforementioned obligation guaranteed
by the plaintiffs under the Real Estate Mortgage,
subject of this action, is further secured by separate
deeds of chattel mortgages on the Mercedez Benz
units covered by the aforementioned invoices in
favor of the defendant Universal Motors
Corporation.
5. That on March 19, 1965, the defendant Universal
Motors Corporation filed a complaint against PDP
Transit, Inc. before, the Court of First Instance of
Manila docketed as Civil Case No. 60201 with a
petition for a writ of Replevin, to collect the balance
due under the Chattel Mortgages and to repossess
all the units to sold to plaintiffs' principal PDP
Transit, Inc. including the five (5) units guaranteed
under the subject Real (Estate) Mortgage.
In addition to the foregoing the Universal Motors Corporation admitted
during the hearing that in its suit (C.C. No. 60201) against the PDP
Transit, Inc. it was able to repossess all the units sold to the latter,
including the five (5) units guaranteed by the subject real estate
mortgage, and to foreclose all the chattel mortgages constituted thereon,
resulting in the sale of the trucks at public auction.
With the foregoing background, the spouses Lorenzo Pascual and
Leonila Torres, the real estate mortgagors, filed an action in the Court of
First Instance of Quezon City (Civil Case No. 8189) for the cancellation
of the mortgage they constituted on two (2) parcels of land
1
in favor of
the Universal Motors Corporation to guarantee the obligation of PDP
Transit, Inc. to the extent of P50,000. The court rendered judgment for
the plaintiffs, ordered the cancellation of the mortgage, and directed the
defendant Universal Motors Corporation to pay attorney's fees to the
plaintiffs in the sum of P500.00. Unsatisfied with the decision, defendant
interposed the present appeal.
In rendering judgment for the plaintiffs the lower court said in part: "...
there does not seem to be any doubt that Art. 1484
2
of the New Civil
Code may be applied in relation to a chattel mortgage constituted upon
personal property on the installment basis (as in the present case)
precluding the mortgagee to maintain any further action against the
debtor for the purpose of recovering whatever balance of the debt
secured, and even adding that any agreement to the contrary shall be
null and void."
The appellant now disputes the applicability of Article 1484 of the Civil
Code to the case at bar on the ground that there is no evidence on
record that the purchase by PDP Transit, Inc. of the five (5) trucks, the
payment of the price of which was partly guaranteed by the real estate
mortgage in question, was payable in installments and that the
purchaser had failed to pay two or more installments. The appellant also
contends that in any event what article 1484 prohibits is for the vendor to
recover from the purchaser the unpaid balance of the price after he has
foreclosed the chattel mortgage on the thing sold, but not a recourse
against the security put up by a third party.
Both arguments are without merit. The first involves an issue of fact:
whether or not the sale was one on installments; and on this issue the
lower court found that it was, and that there was failure to pay two or
more installments. This finding is not subject to review by this Court. The
appellant's bare allegation to the contrary cannot be considered at this
stage of the case.
The next contention is that what article 1484 withholds from the vendor is
the right to recover any deficiency from the purchaser after the
foreclosure of the chattel mortgage and not a recourse to the additional
security put up by a third party to guarantee the purchaser's performance
of his obligation. A similar argument has been answered by this Court in
this wise: "(T)o sustain appellant's argument is to overlook the fact that if
the guarantor should be compelled to pay the balance of the purchase
price, the guarantor will in turn be entitled to recover what she has paid
from the debtor vendee (Art. 2066, Civil Code); so that ultimately, it will
be the vendee who will be made to bear the payment of the balance of
the price, despite the earlier foreclosure of the chattel mortgage given by
him. Thus, the protection given by Article 1484 would be indirectly
subverted, and public policy overturned." (Cruz vs. Filipinas Investment
& Finance Corporation, L-24772, May 27, 1968; 23 SCRA 791).
The decision appealed from is affirmed, with costs against the
defendant-appellant.
Castro, Makasiar, Esguerra and Muoz Palma, JJ., concur.
Teehankee, J., took no part.