Case Digest (G.R. No. L-25140)
Facts:
Universal Motors Corporation v. Mariano D. Velasco, et al., G.R. No. L-25140, July 15, 1980, Supreme Court Second Division, Abad Santos, J., writing for the Court.
The plaintiff-appellant was Universal Motors Corporation; the principal defendant-appellee was Mariano D. Velasco. Velasco purchased from Universal Motors a Mercedes‑Benz truck on the installment plan, executing a promissory note and a chattel mortgage to secure a remaining balance of P35,243.68. He defaulted on payments and refused the vendor’s demand to surrender the truck. The vendor instituted an action in the Court of First Instance of Manila for recovery of possession as a preliminary step to foreclosure; a writ of replevin was issued and the seller repossessed the truck.
The action was commenced December 29, 1964. Defendants failed to answer and were initially declared in default; that default was lifted on April 26, 1965, but no answer was filed. Instead, on June 15, 1965, the parties filed a stipulation of facts admitting, among other things, that Velasco was indebted in the principal sum of P23,763.09, that he had failed to surrender the vehicle, and that in securing possession the plaintiff had incurred expenses itemized as: premium on replevin bond P971.47; sheriff’s expenses P300.00; costs of suit P132.00; and a mechanic’s lien paid P3,000.00 (total P4,403.47). The stipulation further stated the plaintiff received from an insurer P1,870.99 for accident damage, and quoted paragraphs 10 and 14 of the chattel mortgage (concerning mandatory surrender, recovery costs, and an agreed collection fee). Plaintiff waived the contractually stipulated attorney’s fee but reserved its right to a reasonable attorney’s fee adjudged by the court and to recover the replevin bond premium, sheriff’s expenses, costs of suit and mechanic’s lien, less the insurance proceeds.
Relying on the stipulation, the trial court held that plaintiff was entitled to possession and to repayment of the premium on the replevin bond, sheriff’s fees, costs of suit and a reasonable attorney’s fee, but that the mechanic’s lien was not recoverable in that action. The trial court further held that all sums awarded could be enforced only against the proceeds of the mortgaged vehicle, citing the rule limiting a mortgagee in foreclosure on chattels sold on installment to the mortgaged property. Judgment ordered Velasco to pay P1,403.47 and P500 attorney’s fees, to be satisfied out of the proceeds of the sale of the vehicle.
Plaintiff moved for reconsideration asking that the sums be paid directly by Velasco rather than satisfied only from sale proceeds; the motion was den...(Subscriber-Only)
Issues:
- Did the trial court err in ordering that the sums adjudged in favor of the plaintiff be satisfied only from the proceeds of the auction sale of the mortgaged vehicle?
- Does Article 1484(3) of the Civil Code, which limits the vendor in certain installment sales to foreclose the chattel mortgage and bars further action for the unpaid balance, apply to bar recovery of the expenses...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)