Case Digest (G.R. No. 44510)
Case Digest (G.R. No. 44510)
Facts:
The Bachrach Motor Co., Inc. v. Jose Esteva and Teal Motor Co., Inc., G.R. No. 44510, December 24, 1938, the Supreme Court En Banc, Imperial, J., writing for the Court.The plaintiff-appellee Bachrach Motor Co., Inc. sued defendants Jose Esteva and Teal Motor Co., Inc. to collect P46,500 (the unpaid balance on twenty-two promissory notes executed by Esteva and endorsed to Bachrach), plus 12% interest from May 10, 1930 and 25% of the amount due as attorney’s fees. Between 1927 and 1930 Esteva bought 14 autotrucks, 11 trailers and one Buick from Teal for P105,730; by April 8, 1930 his balance was P54,500. He executed twenty-two promissory notes and a chattel mortgage on the vehicles to secure payment. Teal endorsed the notes to Bachrach but expressly retained the mortgage.
Esteva paid eight notes (May–December 1930) but defaulted on January–March 1931 notes. Teal foreclosed the mortgage on March 31, 1931; the sheriff sold the vehicles at public auction to Teal for P20,000. Bachrach then sued Esteva and Teal on the notes. Esteva, by way of counterclaim/cross-complaint, alleged that Teal (in connivance with Bachrach) had illegally foreclosed a mortgage that had ceased to exist under an earlier agreement; he sought damages for loss of the vehicles, lost profits and goodwill.
At first trial the Court of First Instance rendered judgment (May 20, 1933) in favor of Bachrach for a lesser sum; Esteva appealed. This Court in G.R. No. 40233 (reported at 59 Phil. 490) reversed and remanded for a new trial, holding inter alia that (1) in chattel-mortgage law the mortgage is accessory to the debt, (2) where the note is assigned but the mortgage is retained by the assignor there may be an agreement to the contrary, and (3) the foreclosure at issue was null because the mortgage had ceased to exist. After remand Esteva filed an amended answer asserting his counterclaim/cross-complaint; there were disputes over admission of pleadings, demurrers and what evidence could be received. On July 20, 1935 the trial court again entered judgment partly for Bachrach and partly for Teal; Esteva and Teal both appealed to the Supreme Court from that judgment.
Issues:
- Does the prior decision in G.R. No. 40233 operate as res judicata or law of the case so as to preclude relitigation of the validity of the foreclosure and mortgage in the new trial?
- Was the trial court’s admission of evidence by Bachrach attempting to prove a valid foreclosure (after the prior decision) proper?
- Are Bachrach and Teal jointly and severally liable to Esteva for damages caused by the alleged illegal foreclosure, and what sums should be awarded (value of vehicles, depreciation, lost profits, goodwill, license reimbursement)?
- Were the trial court’s specific factual findings — average life and depreciation of the vehicles, valuation on date of attachment, and award for lost profits and goodwill — correct?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)