G.R. No.

L-14475, May 30, 1961

SOUTHERN MOTORS, INC., plaintiff-appellee,
vs.
ANGELO MOSCOSO, defendant-appellant.
PAREDES, J.:

FACTS:
Plaintiff Southern Motors sold a Chevrolet truck to defendant Moscosco on installment basis for
₱6,445.00. Moscosco executed a promissory note for the sum of ₱4,915.00 for the unpaid balance. To
secure payment, he also executed a chattel mortgage over the Chevrolet truck in favor of Southern.
Moscosco had paid a total of ₱ 550.00. However, he failed to pay 3 installments on the balance
amounting to ₱ 4,475.00

Southern filed a complaint for the recovery for the unpaid balance. A writ of attachment over the
Chevrolet truck and a house and lot of Moscosco was issued. But before the trial, the truck was sold by
the Provincial Sheriff of Iloilo at a public auction which plaintiff was the only bidder for ₱1,000.00.

RTC: Held in favor of plaintiff Southern. Ordered Moscosco to pay the balance in interest with attorney’s
fees.

The parties agreed that the case is governed by Art. 1484 of the NCC:
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.

Appellee Southern claimed that it has availed the first, on the other hand, contends that Southern had
availed itself of the third remedy, the foreclosure of the chattel mortgage on the truck.

ISSUE: WON the public auction is tantamount to the foreclosure of the chattel mortgage on the truck.

HELD: NO. Southern 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 Southern 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. (Because unlike in a
judicial foreclosure sale, there is no need for the court to confirm the sale on execution ). The fact that it
had also attached the house and lot of the appellant at San Jose, Antique shows that Southern did not
intend to exercise the 3rd remedy.

In choosing the 1st remedy, Southern 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.
AFFIRMED. Cost against Moscosco.