Case Summary (G.R. No. L-28074)
Factual Background
On June 4, 1965, Casiano Sapinoso purchased an Opel Kadett car from Northern Motors, Inc. for P12,171.00. He made a down payment and executed a promissory note for the remaining balance of P10,540.00, payable in monthly installments with interest at 12% per annum. A chattel mortgage was executed to secure the promise of payment, stipulating various remedies for the mortgagee in case of default, including extrajudicial foreclosure. Sapinoso defaulted on his payments and did not meet the first five installment obligations. Although he made partial payments subsequently, the balance remained significant.
Complaint and Defenses
Due to non-payment, Northern Motors, Inc. filed a complaint for extrajudicial foreclosure and replevin on July 22, 1966. Following the issuance of a replevin writ, the car was seized and returned to Northern Motors. In his defense, Sapinoso admitted to the allegations but claimed to have paid a significant amount towards the balance and asserted that the vehicle was defective, which impeded his ability to make payments. He requested the dismissal of the complaint and the return of the car, indicating a willingness to settle through a compromise.
Decision of the Trial Court
The trial court ruled in favor of Northern Motors, confirming its right to possession of the vehicle but also ordered it to return P1,250.00 to Sapinoso, which he had paid prior to the filing of the answer. The court concluded that Sapinoso's default allowed Northern Motors the right to foreclose; however, this also implied that the plaintiff renounced any claim for further payments following the act of foreclosure.
Appeal Issues
Northern Motors appealed the part of the decision ordering the reimbursement of P1,250.00 to Sapinoso, asserting that under Article 1484 of the Civil Code, the bar against recovering unpaid balances only applies after the foreclosure has been executed. The appellant argued that accepting further payments after filing for foreclosure does not constitute a “further action” as prohibited by the statute.
Ruling on Appeal
The appellate court found in favor of Northern Motors, ruling that the acceptance of payments before a foreclosure sale does not violate Article 1484, as long as the creditor does not proceed with a foreclosure sale. The court determined
...continue readingCase Syllabus (G.R. No. L-28074)
Case Overview
- This case is an appeal on questions of law from a judgment by the Court of First Instance of Manila, specifically from Civil Case No. 66199, which ordered plaintiff Northern Motors, Inc. to pay defendant Casiano Sapinoso the sum of P1,250.00.
- The judgment was delivered by Justice Villamor on May 29, 1970.
Factual Background
- On June 4, 1965, Casiano Sapinoso purchased an Opel Kadett car from Northern Motors, Inc. for P12,171.00.
- Sapinoso made a down payment and executed a promissory note for the remaining balance of P10,540.00, payable in installments with an interest rate of 12% per annum.
- The payment schedule included an initial installment of P361.00 due on July 5, 1965, followed by monthly payments of P351.00 from August 1965 to December 1967.
- To secure the promissory note, Sapinoso executed a chattel mortgage on the vehicle, which provided various remedies for the mortgagee in case of default.
Default and Legal Action
- Sapinoso defaulted on the first installment and the subsequent four monthly payments.
- Despite defaults, he made partial payments totaling P1,410.52 between November 1965 and April 1966, which were applied to accrued interest and principal.
- On July 22, 1966, Northern Motors, Inc. filed a complaint seeking to extrajudicially foreclose the mortgage and issued a writ of replevin to recover the vehicle.