SOUTHERN MOTORS Vs Moscoso

SOUTHERN MOTORS, INC. vs.
MOSCOSO
2 SCRA 168G.R. No. L-14475, May 30, 1961
FACTS:
 In June 1957, plaintiff-appellee, Southern Motors, Inc. (Southern Motors) 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 promisory note for the sum of P4,915,00, representing
the unpaid balance of the purchase price to secure the payment of which, a chattel mortgage was
constituted on the truck in favor of Southern Motors. Of the P4,915,00, defendant was only able
to pay a total of P550.00, which P110.00 was applied to the interest up to August 15, and P400.00
to the principal, thus leaving an unpaid balance of P4,475.00. The defendant failed to pay 3 more
installments on the balance of the purchase price.
 In November 1957, the Southern Motors filed a complaint against the Moscoso to recover the
unpaid balance of the promissory note, and the lower court issued a writ of attachment on
Moscoso’s properties.
 The Sheriff of San Jose, Antique, attach the Chevrolet truck, as well as a house and lot belonging
to Moscoso, and said truck was brought to the Southern Motors’ compound in Iloilo City for safe
keeping. The Provincial Sheriff of Iloilo sold the said truck on January 2, 1958 at a public auction
in which Southern Motors itself was the only bidder for P1,000.00. In March 1958, the trial court
condemned the defendant Moscoso to pay the plaintiff Southern Motors the unpaid balance of
P4,475.00 with interest at the rate of 12% per annum from August 16, 1957, until fully paid.
 While Southern Motors 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 Article 1484 of the
new Civil Code i.e. to exact fulfillment of the obligation (specific performance), Mosocoso, on
the other hand, contends that Southern Motors had availed itself of the third remedy viz, the
foreclosure of the chattel mortgage on the truck.
ISSUE:
Whether or not 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.
HELD:
No. Article 1484 of the Civil Code 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: (I) 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; and (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. The plaintiff 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 the plaintiff 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 plaintiff 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. We perceive nothing unlawful or irregular in plaintiff's act of attaching
the mortgaged truck itself. Since the plaintiff 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. 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.

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