PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs.

MANILA INVESTMENT
&CONSTRUCTION,INC. and CIPRIANO S. ALLAS, defendants-appellants.
G.R. No. L-27132. April 29, 1971.
Facts:
After the decision had become executory, instead of having the mortgaged personal properties sold
at public auction, the parties agreed to have them sold, and were in fact sold, at a private sale. The
net proceeds obtained therefrom amounting to P256,941.70 were applied to the partial satisfaction
of the above judgment. On August 11, 1964, that is, more than five years but less than ten years
from the date when the decision aforesaid became executory, the Philippine National Bank filed
in the same Court of First Instance of Manila an action to revive it. That as of August 11, 1964,
there remains the sum of P382,338.47 still unsatisfied. The court rendered the appealed decision
ordering the defendants to pay the plaintiff, jointly and severally, the amount of P382,338.47. The
defendants appealed to secure a reversal of the above decision.
Issue: 1. Whether the private sale of the mortgaged personal properties was null and void?
2. Whether appellee is not entitled to a deficiency judgment?
Held: 1. No. Parties may agree that personal properties covered by chattel mortgage be sold at a
private sale. There is nothing illegal, immoral or against public order in such agreement entered
into freely and voluntarily. As held in Philippine National Bank vs. De Poli, under Article 1255 of
the Civil Code (Art. 1306, New Civil Code), the contracting parties may stipulate that in case of
violation of the conditions of the mortgage contract, the creditor may sell, at public sale and
without previous advertisement or notice, the whole or part of the good mortgaged for the purpose
of applying the proceeds thereof on the payment of the debt. Said stipulation is not contrary to law
or public order, and therefore it is valid.
2. No. The issue thus raised was already resolved in the negative in Ablaza vs. Ignacio, G.R. No.
L-11466. Therefore, the proceeds of the sale of the mortgaged personal properties of the herein
appellants constitute only a pro tanto satisfaction of the monetary award made by the court and
the appellee Bank is entitled to collect the balance.
FINISHED!
ALBERTA B. CABRAL and RENATO CABRAL, plaintiffsappellees, vs. TEODORA
EVANGELISTA, and JUAN N. EVANGELISTA, defendants-appellants, and GEORGE L.
TUNAYA, defendant.
G.R. No. L-26860. July 30, 1969.
Facts:
The defendants-appellants in this case claim that their right over the mortgaged chattels as
purchasers at the public sale in execution of their judgment against their debtor, defendant Tunaya,
should not be held subordinate to the mortgage lien of plaintiffs-appellees as mortgagees by virtue
of prescription and laches on the part of said mortgagees as well as of their having purchased the
chattels at a public sheriff's sale.
Issue: Whether the rights of a mortgage creditor over the mortgaged properties are superior to
those of a subsequent attaching creditor.
Held: Yes. Defendants-appellants' purchase of the mortgaged chattels at the public sheriff's sale
and the delivery of the chattels to them-with. a certificate of sale did not give them a superior right
to the chattels as against plaintiffs mortgagees. The right of the judgment or attaching creditor,
who so acquired or purchased mortgaged property at public auction after execution, cannot be
superior to that of the creditor who has in his favor an instrument of mortgage executed with the
formalities of the law, in good faith, and without the least indication of fraud.
BICOL SAVINGS & L LOAN ASSOCIATION, petitioner, us. JAIME GUINHAWA and
THE HON. PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE OF
CAMARINES SUR (10th JUDICIAL DISTRICT), BRANCH III, respondents
G.R. No. 62415. August 20,1990

Facts:
Petitioner BISLA (plaintiff therein) filed in the City Court of Naga, Branch II, a complaint for the
recovery of a sum of money constituting the deficiency after foreclosure of the chattel mortgage
put up by the principal borrower Depositario against the latter and his solidary comaker Guinhawa
(herein private respondent) as defendants. On December 4,1981, the City Court rendered a
decision in favor of the petitioner. On appeal, respondent Court of First Instance rendered a
decision reversing the said lower court's decision. Hence, this petition.
Issue:
1. Whether an independent civil action may be instituted for the recovery of deficiency in an extra-
judicial foreclosure of a chattel mortgage.
2. Whether the Private respondent as solidary co-maker is solidarily liable.
Held: 1 Yes. To deny to the mortgagee the right to maintain an action to recover the deficiency
after foreclosure of the chattel mortgage would be to overlook the fact that the chattel mortgage is
only given as a security and not as payment for the debt in case of failure of payment. The
obligation was one of loan secured by a chattel mortgage and not a sale where the price is payable
on installments.
2. Yes. Under Article 1216 of the Civil Code, the creditor may proceed against any one of the
solidary debtors or some or all of them simultaneously. The demand made against one of them
shall not be an obstacle to those which may subsequently be directed against the others, so long as
the debt has not been fully collected. Private respondent as solidary co-maker is also a surety (Art.
2047) and thus, it does not preclude to compel the surety to fulfill his obligation under the
agreement.
INDUSTRIAL FINANCE CORPORATION, petitioner, vs. HON. PEDRO A. RAMIREZ,
Judge of the Court of First Instance of Manila, and CONSUELO ALCOBA, respondents.
G.R. No. L-43821. May 26, 1977

Facts:
Arnaldo Dizon sold to Consuelo Alcoba car for P13,157.89, payable in eighteen monthly
installments, which were secured by a chattel mortgage on the car. Dizon assigned for ten thousand
pesos to Industrial Finance Corporation all his rights and interest in the chattel mortgage. Alcoba
defaulted in the payment of the first four installments and the whole obligation became due and
demandable. The corporation sued her in the Court of First Instance of Manila.
Industrial Finance Corporation prayed that, if the car could not be recovered by means of replevin,
then Consuelo Alcoba should be ordered to pay the corporation the sum of P11,083.38, plus twelve
percent interest per annum, damages, and attorney’s fees in the sum of P2,770.85. There was no
prayer for the foreclosure of the mortgage.
Consuelo Alcoba in her answer merely pleaded that Industrial Finance Corporation “waived the
recovery” of the car by accepting the sum of P4,228.67.Consuelo Alcoba’s lawyer, after making
reference to the corporation’s acceptance of the sum of P4,228.68, incoherently pleaded that the
corporation chose to “pursue the remaining balance of the loan extrajudicially”.
Issue: Whether the mortgagor is liable for any deficiency?
Held: Yes. According to article 1484, it is only when there has been a foreclosure that the
mortgagor is not liable for any deficiency. In this case, there was no foreclosure. The mortgagee
evidently chose the remedy of specific performance. It levied upon the car by virtue of an execution
and not as an incident of a foreclosure proceeding. It is entitled to an alias writ of execution for the
portion of the judgment
The rule is that in installment sales, if the action instituted is for specific performance and the
mortgaged property is subsequently attached and sold, the sale thereof does not amount to a
foreclosure of the mortgage. Hence, the seller-creditor is entitled to a deficiency judgment.
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff and appellee, vs. PEDRO
ALVAREZ, defendant and appellant.
GR. No. 19914. November 27, 1923

Facts: The accused was the owner of a two-passenger automobile of "Dodge Bros." manufacture.
He mortgaged it to the Philippine Automobile Exchange, Inc. The accused sold the automobile to
Mr. Anselmo Singian. Mr. Anselmo Singian bought this automobile in the belief that it was free
from all liens and encumbrances, and the accused, on the other hand, did not tell Mr. Singian that
the automobile was mortgage. Lower court found the accused guilty of the crime of estafa defined
in paragraph 1 of article 535, in connection with paragraph 2 of article 534, of the Penal Code,
Issue: Should the act of the accused constitute a crime of estafa defined in Article 537 instead of
Article 535, paragraph 1, of the Penal Code, that was applied by the trial court.
Held: The accused is sentenced under article 537, paragraph 2 of the Penal Code. The sale of a
thing as free when it is subject to an encumbrance constitutes the crime of estafa defined in article
537, and not in article 535, paragraph 1, of the Penal Code. Act No. 1508 does not expressly repeal
article 537 of the Penal Code. Neither does it impliedly repeal the same, because both laws are not
incompatible, nor do they exclude each other. They define distinct offenses, penalize different acts,
and can be applied independently. Article 537 of the Penal Code punishes him who sells a thing
as free when in fact it is subject to an encumbrance; whereas Act No. 1508 punishes him who sells
a mortgaged chattel, without the consent in writing of the mortgagee. An act may constitute the
crime defined in article 537 of the Penal Code without being a violation of Act No. 1508 and,
conversely, an act may constitute a violation of Act No. 1508 without falling within the provision
of article 537 of the Penal Code.