**Bachrach Motor Co., Inc. v. Pablo A. Millan: A Dispute over Installment Sales and Chattel Mortgage Foreclosure**
### Facts:
This case revolves around an attempt by the Bachrach Motor Co., Inc. (plaintiff and appellant) to recover a balance due on a promissory note executed by Pablo A. Millan (defendant and appellee) on December 12, 1933. Millan had purchased a second-hand Renault touring car from the plaintiff and agreed to pay the remaining balance of P939 in monthly installments. Millan failed to make payments due on specified dates, leading to a balance of P928.50 with interest. Instead of foreclosing the chattel mortgage on the car, the plaintiff initiated a lawsuit to recover the outstanding amount. The trial court dismissed the action based on Article 1454-A of the Civil Code, which allows the vendor either to cancel the sale or foreclose the mortgage but does not mention direct recovery of unpaid balances through lawsuits.
### Issues:
1. Whether the vendor of personal property sold on installment can sue for the fulfillment of the obligation even without foreclosing the chattel mortgage when the buyer fails to pay installments.
2. The applicability of Article 1454-A of the Civil Code in limiting the vendor’s right to demand fulfillment of the obligation or if it solely restricts the actions to either cancellation of sale or foreclosure of chattel mortgage.
### Court’s Decision:
The Supreme Court reversed the trial court’s decision, holding that:
– The vendor has the right to exact fulfillment of the obligation arising from the installment sale of personal property and is not limited to canceling the sale or foreclosing the mortgage.
– Article 1454-A does not repeal or amend Article 1124 of the Civil Code, which allows an aggrieved party to demand the fulfillment of obligations. Thus, a vendor, upon the buyer’s failure to pay installments, is still entitled to compel fulfillment of the payment obligations under the contract.
– The legislation aimed to prevent abuses in chattel mortgage foreclosures by restricting vendors to specific remedies but did not eliminate the basic right to enforce the contract.
### Doctrine:
– In sales of personal property on installment plans, the vendor may demand fulfillment of the payment obligation instead of merely choosing between cancelling the sale or foreclosing the mortgage, provided such action is not expressly limited by statute.
– Article 1454-A of the Civil Code limits the vendor’s actions post-foreclosure or upon cancellation but does not revoke the right under Article 1124 to demand fulfillment of contractual obligations.
### Class Notes:
– **Installment Sales**: Involves payment of the purchase price in periods or installments.
– **Chattel Mortgage**: A secured transaction involving personal property.
– **Article 1454-A** Clarifies the remedies available to vendors in installment sales, specifically limiting actions post-cancellation or foreclosure but not affecting the fundamental right to enforce contract fulfillment.
– **Article 1124**: Endows parties with the right to demand fulfillment of obligations in cases of non-compliance by the other party.
– **Legal Remedies in Installment Sales**: The vendor can demand payment, cancel the sale, or foreclose the mortgage; however, foreclosure or cancellation restricts further action against the purchaser.
### Historical Background:
The case illustrates the evolving legal landscape regarding installment sales and chattel mortgages in the Philippines. The enactment of Article 1454-A was a legislative response to prevent the exploitation of buyers through the foreclosure process, an important context in the early 20th-century Philippine commerce, highlighting the balance between protecting vendors’ rights and preventing abuses leading to consumer exploitation.
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