G. R. No. L-10789. May 28, 1957

The case.  Appellants seek to reverse the order of Hon. Pantaleon Pelayo, Judge of the Iloilo court of first instance refusing to  interfere  with the  alias writ of execution issued in Civil Case No. 2942 pending  in another aala of the same court.

The facts.  In April 1953  Amador Tajanlangit and his wife Angeles,  residents of Iloilo, bought from the Southern  Motors  Inc. of Iloilo two  tractors and a thresher.  In payment  for  the same, they executed  the promissory note Annex A  whereby they undertook to satisfy the total purchase price of P24,755.75 in several installments (with interest) payable on  stated dates from  May 18,  1953 to December  10,  1955.   The note  stipulated  that  if  default be made in the payment of interest or of any installment, then the  total principal  sum  still  unpaid with  interest shall at once become demandable etc.  The spouses failed to meet any installment.  Wherefore,  they were sued, in the  above  Civil  Case  No. 2942, for the  amount  of the promissory note.¹  The spouses defaulted,  and  the court, after listening to  the  Southern Motors’ evidence entered judgment for  it  in the total sum of P24.755.75 together with interest at  12 per cent,  plus 10 per cent of the total amount due  as attorney’s fees  and costs  of collection.

Carrying out the order of execution,  the  sheriff levied on the same machineries and farm implements which had been bought by the spouses; and later sold them at public auction to the highest bidder—which turned out to be the Southern Motors itself—for  the total sum of P10,000.

As  its  judgment called for  much more, the  Southern Motors subsequently asked and obtained, an alias writ of execution; and pursuant thereto,  the provincial  sheriff levied attachment on the Tajanlangits’ rights and interests in  certain real properties—with a  view to another sale on execution.

To  prevent  such sale, the Tajanlangits instituted this action in  the Iloilo court of first instance for the purpose among others, of annulling  the alias writ of execution and all proceedings subsequent thereto.   Their  two main theories:  (1) They had returned the machineries and farm implements to the  Southern Motors Inc., the  latter accepted them, and had thereby settled their accounts; for that  reason, said spouses did  not contest  the  action  in Civil Case No. 2942; and (2) as the Southern Motors Inc. had repossessed  the machines  purchased on installment (and mortgaged)  the buyers were thereby relieved from  further responsibility,  in view  of the Recto Law, now article 1484  of the  New Civil  Code.

For  answer, the company denied the alleged “settlement  and understanding” during the pendency of civil case  No.  2942.  It also denied  having  repossessed  the machineries,  the  truth being that they were  attached by the sheriff and then deposited  by the latter in its shop for safekeeping,  before the sale  at  public auction.

The case was  subrhitted  for  decision mostly upon  a stipulation of  facts.  Additional testimony  was offered together  with documentary  evidence.  Everything  considered the court  entered judgment,  saying in part:

“The proceedings  in Civil Case No. 2942 above referred to, were had in the Court of First Instance  (Branch 1) of the Province and of the City of Iloilo.  While this court  (Branch  IV)  sympathizes with plaintiffs, it cannot grant, in this  action, the relief prayed for in the  complaint because  courts of similar jurisdiction cannot invalidate the judgments, and  orders of each  other. Plaintiffs have not pursued  the  proper  remedy.  This court is without authority and jurisdiction to declare null and void the order directing the issuance of alias writ of execution because it was made by another court of equal rank and  category  (see  Cabiao  and  Izquicrdo  vs.  Del  Kosario  and Lim, 44  Phil., 182-186).
 
Wherefore, judgment  is  hereby rendered dismissing, the  complaint with  costs against plaintiffs.  Let the  writ of  preliminary injunction issued on  August 26, 1954,  be lifted.”
 
The  plaintiffs  reasonably brought  the  matter  to  the Court of Appeals, but the latter forwarded  the expediente, being of the opinion  that.  the appeal  involved questions of  jurisdiction and/or law.

Discussion.  Appellants’  brief  elaborately  explains  in the nine   errors assigned,  their  original  two  theories, although their “settlement” idea appears to be somewhat modified.

“What is being sought in this present action” say  appellants “is  to  prohibit and  forbid  the appellee  Sheriff of  Iloilo from attaching and selling at public  auction sale the real properties of appellants because that  is  now forbidden by  our law after the chattels that have been purchased and duly mortgaged to the vendor-mortgagee had already been repossessed by  the  same  vendor-mortgagee and later  on sold at public  auction sale  and purchased  by the same  at such meager  sum  of P10,000.”

“Our law” provides,

“Art. 148-4. In a contract  of  sale of personal property the price of  which is  payable in installments, the vendor may exercise  any of  the following remedies:

(1) Exact fulfillment of  the  obligation, should the  vendee  fail to  pay;
(2) Cancel the sale, should  the vendee’s  failure  to  pay cover two or  more installments;
(3) Foreclose  the chattel mortgage  on  the  thing sold,  if  one has been constituted, should the vendee’s failure to pay cover  two or  more installments.  In  this case, he  shall  have  no further action against the  purchaser to  recover any unpaid balance of the price.  Any agreement to the contrary shall be void.”  (New Civil Code.)

Appellants would invoke the last paragraph.   But there has  been  no  foreclosure  of the  chattel  mortgage  nor a  foreclosure sale.  Therefore the prohibition against further collection  does not apply.

“At any rate it is  the actual sale of the  mortgaged chattel in accordance with section 14 Act No. 1508 that would bar  the creditor (who chooses  to foreclose)  from recovering  any  unpaid  balance. (Pacific Com.  Co. vs.  Tie la Kama, 72 Phil. 380.)”  (Manila  Motor Co. vs.  Fernandez, 99 Phil., 782.)

It is true  that there was a chattel mortgage on the goods  sold.   But the  Southern Motors elected to  sue on the- note exclusively, i.e. to exact fulfillment of the obligation to pay.   It  had  a right  to  select among  the three remedies  established  in Article 1484.  In choosing to sue on the note,  it was not  thereby  limited  to  the proceeds of the  sale,  on execution,  of the mortgaged good.¹

In Southern Motors Inc. vs. Magbanua,  (100 Phil., 155) a  similar  situation  arose in connection with the purchase on installment of a Chevrolet truck by Magbanua.   Upon the  latter’s default, suit  on the note was  filed, and the truck levied on together with other properties of the debtor. Contending that the seller was limited to the truck, the debtor  obtained a discharge of  the other properties.   This court said:

“By praying  that the defendant  be ordered to  pay the sum of P4,690 together  with the stipulated interest  at 12%  per annum from  17 March 1954  until  fully  paid, plus  10 per cent of the total  amount due  as  attorney’s fees and cost of  collection, the plaintiff elected  to exact  the fulfillment of the  obligation and not to foreclose the mortgage on the truck.  * * *

As  the plaintiff has  chosen to exact  the fulfillment  of  the  de- fendant’s obligation, the former  may  enforce  execution  of the judgment rendered in its  favor on the personal and real properties  of the latter not  exempt from execution sufficient to  satisfy the judgment.  That part of the judgment depriving the  plaintiff of its right to enforce judgment against the properties, of  the defend- ant except the mortgaged truck and discharging the writ of at- tachment on his other properties is erroneous.”   (Italics ours.)

 
Concerning their second  theory,—settlement or  cancel- lation—appellants allege that the  very implements sold “were  duly returned” by them, and “were duly received and accepted by the  said vendor-mortgagee”.  Therefore, they argue, “upon the return of  the  same chattels and due acceptance of the same by the  vendor-mortgagee, the conditional sale is ipso facto cancelled, with the right of the vendor-mortgagee  to  appropriate whatever  down- payment and posterior monthly installments made  by the purchaser as it did happen in the present case at bar.”

The  trouble with the argument is that it assumes that acceptance of the goods  by the Southern Motors Co.  with a view to “cancellation”  of  the sale.  The company denies such acceptance and cancellation, asserting the goods were deposited  in  its shop when the sheriff attached them  in pursuance  of  the execution.   Its assertion is backed up by the sheriff,  of whose credibility there is no  reason to doubt.   Anyway this cancellation or settlement theory may not be heeded now, because it would contravene the  deci- sion in Civil  Case No.  2942  above-mentioned—it would show the Tajanlangits owned nothing to Southern Motors Inc.  Such  decision  is  binding upon   them,  unless and until they manage to set it  aside in  a proper proceeding— and this is not it.

There are other points involved in the case, such as the authority of the judge of one branch  of  a court of first1 instance to enjoin proceedings in  another branch  of the same court.  As stated, Judge Pelayo refused to interfere on  that ground.  Appellants  insist this  was  error on several  counts.   We  deem it unnecessary to  deal  with this procedural  aspect,  inasmuch as we find that,  on the merits,  plaintiffs are not entitled to the relief demanded.

Judgment.   The  decision dismissing the  complaint,  is affirmed, with costs  against appellants.  So ordered.

Padilla,  Montemayor,  Reyes,  A.,  Bautista  Angelo, Labrador, Conception, Reyes, J. B. L., and Endencia, JJ., concur.

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¹ There was a mortgage, but plaintiffs elected to sue on the note, and ask for execution.
¹ Manila Trading & Supply Co. vs. Eeyes, 62 Phil. 461;  Macondray & Co.  vs. Eustaquio, 64 Phil. 446; Manila Motor Co. supra.