LR Luneta Motor Company vs. Angel Dimagiba

Luneta Motor Company vs.
Angel Dimagiba, the fulfillment of the first promissory note, and

et. al her liability being only secondary, neither should
G.R. No. L-17061, December 30, 1961 she be required anymore to pay the balance due
unto plaintiff from Angel Dimagiba, so that the
Facts: Angel Dimagiba bought from the Luneta result would be that with respect to the money
Motor Company a truck for a price which was liability prayed for in the complaint, the same will
compromised at P16,126.12 payable in 18 have to be a dismissal…”
monthly installments to guarantee which he
executed a chattel mortgage on the same truck Said article prescribes three remedies which a
on May 7, 1956, and as a further security thereto vendor may pursue in a contract of sale of
one Natividad Noriel also executed on the same personal property the price of which is payable
date a chattel mortgage on another truck which in installments, to wit: (1) exact fulfillment of the
belonged to the latter. It also appears that when obligation; (2) cancel the sale; and (3) foreclose
Dimagiba failed to pay several installments as the mortgage on the thing sold. If he chooses
he agreed in the promissory note he executed the third remedy, the article provides that he
to cover the price of the truck he purchased, the shall have no further action against the
company instituted an action not only to recover purchaser to recover any unpaid balance of the
the balance of his obligation but to secure the purchase price. It even adds that any agreement
seizure of the two trucks mortgaged with a to the contrary shall be void.
prayer that the proceeds that may be realized
after the sale of said trucks be applied to the But in the instant case the vendor was not
payment of the judgment that may be rendered content in choosing any of the three remedies,
in the case. Because of the vague nature of the but chose to avail itself of the first and third
allegations contained in the complaint, as well remedies. More than that, plaintiff even went to
as in its prayer, the court a quo, as well as the the extent of suing for replevin, in other words,
Court of Appeals, considered the action taken it filed an action containing three remedies: to
as one of both replevin and foreclosure of collect the purchase price, to seize the property
mortgage. purchased, and to foreclose the mortgage
executed thereon. Plaintiff even went to the
Issue: WON the scheme of the company is a extent of selling first the property of Noriel, who
flagrant violation of Art. 1484 of the Civil Code. is not the vendee, out of court, and after doing
so, it asked the court for judgment in the
Held: YES. As ruled by CFI which the CA balance. Such a scheme is not only irregular but
affirmed: “While it is true that Exhibit “4” on its is a flagrant circumvention of the prohibition of
face appears to be a compromise, there is no the law.
question that by virtue of said compromise, the
truck of Angel Dimagiba was once more sold to
him on the installment plan by Luneta Motor Co.
and Angel was made to assume the balance of
the account including parts and tires all on
credit; the Court does not see that this being the
case, the case can be taken out of the operation
of Article 1484 of the New Civil Code; the law is
quite emphatic when it declares that any
agreement to the contrary would be null and
void; and the evidence having established the
fact that the consideration of the two promissory
notes, Exhibits “G” to “I” were casings and inner
tubes also as the Court understands
incorporated into the truck and covered as
plaintiff itself alleges in paragraph 3 of its
complaint, in the chattel mortgage, Exhibit “C”,
the only effect should be as the Court
understands Art. 1484 that when plaintiff chose
to foreclose the chattel mortgage, it submitted
itself to the consequences of the law with the
result that having seized the truck of Angel
Dimagiba, it could no longer secure any
judgment for the balance of the account of Angel
and for the reason that Natividad was only a
mortgagor in the chattel mortgage to guarantee

LR Luneta Motor Company vs. Angel Dimagiba

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LR Luneta Motor Company vs. Angel Dimagiba

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Luneta Motor Company vs.

Angel Dimagiba, the fulfillment of the first promissory note, and

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