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    14 - Cruz vs. Filipinas Investment & Finance Corp.

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    Juvial Guevarra Boston
    The seller may choose to foreclose a chattel mortgage if the buyer fails to pay two or more installments, but they cannot pursue additional action to recover any unpaid balance. This case involved spouses who purchased a bus and mortgaged their land as collateral but failed to make payments. The finance company foreclosed on the bus mortgage but did not recover the full amount, so they tried to foreclose on the land mortgage as well. The court ruled that foreclosing the chattel (bus) mortgage barred any additional recovery attempts, as the law provides alternative remedies but not cumulative ones.

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    14 - Cruz vs. Filipinas Investment & Finance Corp.

    Uploaded by

    Juvial Guevarra Boston
    54 views1 page
    The seller may choose to foreclose a chattel mortgage if the buyer fails to pay two or more installments, but they cannot pursue additional action to recover any unpaid balance. This case involved spouses who purchased a bus and mortgaged their land as collateral but failed to make payments. The finance company foreclosed on the bus mortgage but did not recover the full amount, so they tried to foreclose on the land mortgage as well. The court ruled that foreclosing the chattel (bus) mortgage barred any additional recovery attempts, as the law provides alternative remedies but not cumulative ones.

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    SALES

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    The seller may choose to foreclose a chattel mortgage if the buyer fails to pay two or more installments, but they cannot pursue additional action to recover any unpaid balance. This case involved spouses who purchased a bus and mortgaged their land as collateral but failed to make payments. The finance company foreclosed on the bus mortgage but did not recover the full amount, so they tried to foreclose on the land mortgage as well. The court ruled that foreclosing the chattel (bus) mortgage barred any additional recovery attempts, as the law provides alternative remedies but not cumulative ones.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    54 views1 page

    14 - Cruz vs. Filipinas Investment & Finance Corp.

    Uploaded by

    Juvial Guevarra Boston
    The seller may choose to foreclose a chattel mortgage if the buyer fails to pay two or more installments, but they cannot pursue additional action to recover any unpaid balance. This case involved spouses who purchased a bus and mortgaged their land as collateral but failed to make payments. The finance company foreclosed on the bus mortgage but did not recover the full amount, so they tried to foreclose on the land mortgage as well. The court ruled that foreclosing the chattel (bus) mortgage barred any additional recovery attempts, as the law provides alternative remedies but not cumulative ones.

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    © All Rights Reserved
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    Subject: Sales

    Doctrine: The seller may choose to foreclose a chattel mortgage for the buyer’s failure to pay
    two or more installments, but he shall have no further action against the purchaser to recover
    any unpaid balance of the price.

    Cruz vs. Filipinas Investment & Finance Corp.,


    23 SCRA 791 G.R. No. L-24772 May 27, 1968

    Facts:
    Sps. Cruz purchased (1) Isuzu Diesel bus from Far East Motor Corporation (FEMC) for the
    amount of Php 44,616.24 payable in installments of Php 1,487.20 per month 30 months with
    12% interest per annum. Sps. Cruz executed a promissory note for the indebtedness. Since
    Sps. Cruz did not pay any downpayment for the purchase, FEMC required the Sps Cruz to
    execute a second mortgage, this time, for a parcel of land with an area of 68,902 square
    meters.

    The same property is currently mortgaged with DBP for a prior loan that Mrs. Cruz took out
    amounting to Php 2,600.00

    FEMC indorsed the promissory note and assigned all its rights to the Deeds of Chattel Mortgage
    and Deeds of Real Estate mortgage to the respondent Filipinas Investment and Finance Corp
    (FIFC).

    Sps. Cruz failed to comply with their obligation to pay thus, FIFC foreclosed the chattel
    mortgage to which they were able to recover Php 15,000. Since the proceeds were not enough
    to satisfy the full amount of the petitioners’ indebtedness, FIFC proceeded to foreclose the Real
    Estate Mortgage on Mrs. Cruz’s land (FIFC first paid DBP for the remainder of Mrs. Cruz’s loan).

    FIFC requested the Provincial Sheriff of Bulacan to judicially or extra-judicially foreclose the said
    lot but this was put in abeyance by the Sheriff pending the resolution of the instant case.

    Issue:
    Whether or not the respondent can still extrajudicially foreclose the real estate mortgage
    constituted by the petitioners to satisfy an obligation that is still unpaid

    Ruling:
    No, according to Art 1484, should the vendee or purchaser of a personal property default in the
    payment of two or more of the agreed installments, the vendor or seller has the option to avail of
    any one of these three remedies — either to exact fulfillment 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 is, 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.

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