Luneta Motor Co. vs Salvador, et. al.

108 PR 103 July 26, 1960

Ponente: Gutierrez Daid
Nature: Appeal rom an order o the Court o lirst Instance o Manila
Iacts:
Luneta Motor Company sold a Reo truck to Maximino Salador, to be paid on instalment basis. Ater haing
made a downpayment, Salador executed in aour o Luneta Motor Company a promissory note to coer the balance
o the purchase price. Salador also executed in aour o Luneta Motor a chattel mortgage on the property to secure the
payment o the said balance.
lor alleged ailure o Salador to pay the instalments, Luneta Motor Company iled with the ClI a complaint
against Salador, praying or the seizure o the truck, and that deendant`s be ordered to pay the unpaid balance o the
purchase price plus interests.
By irtue o a writ o seizure, the truck subject o the action was seized. loweer, upon payment o a
substantial amount and a promise to settle the balance o the obligation, the truck was released. loweer, as no urther
payments were made, a petition or the issuance o an alias writ o seizure was iled by Luneta Motor, but this was to no
aail as according to the sheri, the truck could not be located. Lentually, ater the issuance o a second alias writ o
seizure, Luneta Motor took possession o the truck.
Subsequently, Luneta Motor sold the truck at public auction and itsel bought the truck. Dimagiba, co-
deendant, iled a motion to dismiss the complaint on the ground that Luneta Motor has no more case against them,
Luneta haing already oreclosed the chattel mortgage upon the property. 1he lower court dismissed the complaint.
Issue: \ON the complaint was properly dismissed upon the oreclosure o the mortgage
Held//Ratio:
\es. Art 1484 is clear that oreclosure o the chattel mortgage and recoery o the unpaid balance o the price
are alternatie remedies and may not be pursued conjunctiely. Because Luneta Motor had already oreclosed the chattel
mortgage constituted on the property and had taken possession thereo, the lower court acted rightly in dismissing the
complaint iled or the purpose o recoering the unpaid balance o the purchase price. By seizing the truck and
oreclosing the mortgage at the progress o the suit, Luneta Motors renounced whateer claim it may hae had under the
promissory note, and consequently, it had no more cause o action against the promissor and the guarantor.