Case Digest (G.R. No. 44552)
Facts:
Ong Liong Tiak v. Luneta Motor Company and the Sheriff of Manila, G.R. No. 44552, November 07, 1938, the Supreme Court En Banc, Diaz, J., writing for the Court.The plaintiff-appellant, Ong Liong Tiak, bought a Chrysler sedan from S. Arellano Choa Siong about August 21–22, 1933; the vendor endorsed the certificate of registration (Exhibit A) in favor of Ong. The automobile had originally been sold by Luneta Motor Company to Arellano on June 11, 1931 for P1,800, payment for which was evidenced by eighteen promissory notes of P100 each and secured by a chattel mortgage (Exhibit 2) in favor of Luneta.
Exhibit 2 contained an express clause stating that the mortgage would also secure the purchase price of any gasoline, tires, accessories, repairs or "any other indebtedness of the mortgagor in favor of the mortgagee incurred in any other manner whatever." In October–November 1932, one Jeronimo Angeles obtained paints and merchandise from Macondray & Co., Inc. amounting to P407; Arellano acted as guarantor up to P300 and paid P160, leaving P140 (later reduced). Macondray assigned its claim against Arellano to Luneta; Arellano paid P40 thereafter leaving P100 unpaid.
Arellano paid the last of the eighteen notes to Luneta on April 4, 1933, but Luneta refused to cancel Exhibit 2 on the ground of the outstanding P100 balance arising from the Angeles–Macondray transaction for which Arellano had bound himself. Luneta foreclosed the mortgage and caused the sheriff to attach the automobile. Ong filed Civil Case No. 47997 in the Court of First Instance of Manila seeking an injunction against the defendants and damages of P500 to set aside the attachment; the trial court overruled and dismissed his complaint. Ong appealed to the Supreme...(Subscriber-Only)
Issues:
- Was the chattel mortgage (Exhibit 2) extinguished upon Arellano's payment of the last promissory note?
- Was the automobile free of the mortgage lien at the time Arellano sold it to Ong?
- Was the foreclosure/attachment by Luneta and the sheriff lawful against the automo...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
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