Margery Roana Carreon

Credit Transactions
Lim v Lutero

G.R. No. L-25235 December 9, 1926

Facts:
Lutero executed and delivered a registered mortgage to Lim. It was executed to
cover expenses incurred by the mortgagors in the cultivation and harvesting of
agricultural crops.
The purpose of this action was to foreclose a certain mortgage given to secure
future advancements for the sum of P12,000, among others. The complaint alleged
that there was still due and unpaid on said mortgage ( a) the sum of P22,807.09
with interest at 12 per cent per annum. Defendant denied the claim.
Issue:
WON a mortgage may validly cover future advancements
Held:

The court held that a mortgage to cover future advances is valid. When a mortgage
is given for future advancements and the money is paid to the mortgagor "little by
little" and repayments are made from time to time, the advancements and the
repayments must be considered together for the purpose of ascertaining the
amount due upon the mortgage at maturity. Courts of equity will not permit the
consideration of the repayments only for the purpose of determining the balance
due upon the mortgage. (Luengo & Martinez vs. Moreno, 26 Phil., 111.)

The mere fact that in contract of advancements the repayments at any one time
exceeds the specific amount mentioned in the mortgage, will not have the effect of
discharging the mortgage when the advancements at that particular time are
greatly in excess of the repayments; especially is this true when the contract of
advancement or mortgage contains a specific provision that the mortgage shall
cover all " such other amounts as may be then due." Such a provision is added to
the contract of advancements or mortgage for the express purpose of covering
advancements in excess of the amount mentioned in the mortgage. (Luengo &
Martinezvs. Moreno, supra.)

A mortgage given to secure advancements is continuing security and is not

discharged by repayment of the amount named in the bond or mortgage until the
full amount of the advancements are paid. (Shores vs. Doherty, 65 Wis., 153.)
EL BANCO ESPANOL FILIPINO vs. JAMES PETERSON

FACTS:

Banco Espanol Filipino (BEP) filed a complaint against Sheriff Peterson and Juan
Garcia. From the evidence introduced at the trial, both oral and documentary, it
appears that a third person (LUIS SIERRA - depositary), appointed by the common
consent of the debtor (Francisco Reyes) and creditor (BEP), was in possession of the
goods pledged in favor of the bank under the direct supervision of an agent of the
bank (Mariano Rodriguez).

The testimonies of Francisco Reyes, Luis M.a Sierra, and Mariano Rodriguez
corroborate the existence and authenticity of the contract of pledge recorded in a
public instrument and conclusively and satisfactorily show that the debtor, after the
pledge of the property, parted with the possession of the same, and that it was
delivered to a third person designated by common consent of the parties. For the
purpose of giving this possession greater effect, the pledgee appointed a person to
examine daily the property in the warehouse where the same was kept.

The defect alleged to exist in the said contract is that the debtor, Reyes, continued in
possession of the property pledged; that he never parted with the said property, and
that neither the creditor nor the depositary appointed by common consent of the
parties were ever in possession of the property pledged, and for this reason, and upon
the further ground that the contract was fraudulent, the court below dismissed the
complaint with the costs against the plaintiff.

ISSUE:

Whether the contract of pledge entered into by and between BEP and Francisco Reyes
to secure a loan made by the former to the latter was valid.

HELD:

The contract in question was, therefore, a perfect contract of pledge under articles
1857 and 1863 of the Civil Code, it having been conclusively shown that the pledgee
took charge and possession of the goods pledged through a depository and a special
agent appointed by it, each of whom had a duplicate key to the warehouse wherein
the said goods were stored, and that the pledgee, itself, received and collected the
proceeds of the goods as they were sold.
The fact that the said goods continued in the warehouse which was formerly rented
by the pledgor, Reyes, does not affect the validity and legality of the pledge, it having
been demonstrated that after the pledge had been agreed upon, and after the
depository appointed with the common consent of the parties had taken possession of
the said property, the owner, the pledgor, could no longer dispose of the same, the
pledgee being the only one authorized to do so through the depositary and special
agent who represented it, the symbolical transfer of the goods by means of the
delivery of the keys to the warehouse where the goods were stored being sufficient to
show that the depositary appointed by the common consent of the parties was legally
placed in possession of the goods.

Valmonte vs. CA PNB

FACTS:

There were two mortgages constituted on subject properties by the appellants. The
first mortgage was for a loan of P16,000.00 and the second one was for a loan of
P5,000.00, by and between petitioners and the PNB. What the Bank did was to
foreclose the second mortgage embodied in a separate mortgage contract.

Appellants questioned the validity of extrajudicial foreclosure made on their

property. One of their contentions is the failure of PNB to foreclose the first mortgage
for the loan of P16,000.00 was in actuality a pactum commissorium, which is
prohibited by law, and the subsequent transfer by PNB to Valenton of the said
property is a nullity.

ISSUE:

Whether the contention is tenable.

HELD:

No. Pactum Commissorium takes place when in a mortgage contract, it is stipulated

that the ownership of the property would automatically pass to the vendee in case no
redemption is made within a given period, thus enabling the mortgagee to acquire
ownership of the mortgaged property without need of foreclosure. It is not so in the
present case where there was foreclosure of the mortgage.

When PNB opted to foreclose only the second mortgage for the loan of P5,000.00, it
was well within its right to do so. The only condition the law requires in extrajudicial
foreclosure is that the loan is already due and demandable and there was failure on
the part of the mortgagor to pay the mortgage debt. The law does not prohibit a
mortgagee from choosing which of the mortgages in his favor to foreclose. It must be
borne in mind that the power to decide whether to foreclose or not resides in the
mortgagee.
Since the appellants failed to redeem within the redemption period and during the
extension agreed upon, the effect of such failure to redeem was to vest absolute
ownership over subject properties purchased. The annotation of the unforeclosed
mortgage even if appearing on the title of Artemio Valenton did not in any way affect
the sale between the latter and PNB. In fact, since there was merger on the part of
PNB prior to the sale to said Valenton, any lien which the petitioners were claiming
as subsisting was already extinguished.

TUMALAD vs. VICENCIO, 41 SCRA 143

Chattel Mortgage; Redemption

FACTS:

Defendants-appellants executed a chattel mortgage in favor of plaintiffs-appellees

over their house which were being rented from Madrigal & Company, Inc.

The mortgage was registered in the Registry of Deeds of Manila on 2 September

1955.

When defendants-appellants defaulted in paying, the mortgage was extrajudicially

foreclosed, and on 27 March 1956, the house was sold at public auction pursuant to
the said contract.

As highest bidder, plaintiffs-appellees were issued the corresponding certificate of

sale. Thereafter, plaintiffs-appellees commenced Civil Case in the municipal court of
Manila, praying, among other things, that the house be vacated and its possession
surrendered to them, and for defendants-appellants to pay rent of P200.00 monthly
from 27 March 1956 up to the time the possession is surrendered.

Defendants-appellants, in their answers in both the municipal court and court a

quo impugned the legality of the chattel mortgage, on two grounds, which are: (a)
that their signatures on the chattel mortgage were obtained through fraud, deceit, or
trickery; and (b) that the subject matter of the mortgage is a house of strong
materials, and, being an immovable, it can only be the subject of a real estate
mortgage and not a chattel mortgage.

ISSUE:

Whether the Chattel Mortgage entered into by and between the parties is valid.
HELD:

Fraud or deceit does not render a contract void ab initio, and can only be a ground for
rendering the contract voidable or annullable pursuant to Article 1390 of the New
Civil Code, by a proper action in court.

It is obvious that the inclusion of the building, separate and distinct from the land,
in the enumeration of what may constitute real properties (art. 415, New Civil Code)
could only mean one thingthat a building is by itself an immovable
property irrespective of whether or not said structure and the land on which it is
adhered to belong to the same owner.

Certain deviations, however, have been allowed for various reasons. In the case of
Manarang vs. Ofilada, No. L-8133, 18 May 1956, 99 Phil. 109, this Court stated that
it is undeniable that the parties to a contract may by agreement treat as personal
property that which by nature would be real property. Again, in the case of Luna vs.
Encarnacion, No. L-4637, 30 June 1952, 91 Phil. 531, the subject of the contract
designated as Chattel Mortgage was a house of mixed materials, and this Court held
therein that it was a valid Chattel mortgage because it was so expressly
designated and specifically that the property given as security is a house of mixed
materials, which by its very nature is considered personal property.

The view that parties to a deed of chattel mortgage may agree to consider a house as
personal property for the purposes of said contract, is good only insofar as the
contracting parties are concerned. It is based, partly, upon the principle of estoppel.
Hence, if a house belonging to a person stands on a rented land belonging to another
person, it may be mortgaged as a personal property as so stipulated in the document
of mortgage. It should be noted, however, that the principle is predicated on statements
by the owner declaring his house to be a chattel, a conduct that may conceivably estop
him from subsequently claiming otherwise.

In the contract, the house on rented land is not only expressly designated as Chattel
Mortgage; it specifically provides that the mortgagor . . . voluntarily CEDES, SELLS
and TRANSFERS by way of Chattel Mortgage the property together with its
leasehold rights over the lot on which it is constructed and participation. . . Although
there is no specific statement referring to the subject house as personal property, yet
by ceding, selling or transferring a property by way of chattel mortgage defendants-
appellants could not have meant to convey the house as chattel, or at least, intended
to treat the same as such, so that they should not now be allowed to make an
inconsistent stand by claiming otherwise. Moreover, the subject house stood on a
rented lot to which defendants-appel-lants merely had a temporary right as lessee,
and although this can not in itself alone determine the status of the property, it does
so when combined with other factors to sustain the interpretation that the parties,
particularly the mortgagors, intended to treat the house as personalty.
Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No.
1508. Section 14 of this Act allows the mortgagee to have the property mortgaged sold
at public auction through a public officer in almost the same manner as that allowed
by Act No. 3135, as amended by Act No. 4118, provided that the requirements of the
law relative to notice and registration are complied with.

Section 6 of Act No. 3135, as amended provides that the debtor-mortgagor may, at
any time within one year from and after the date of the auction sale, redeem the
property sold at the extrajudicial foreclosure sale.
Section 7 of Act 3135, as amended allows the purchaser of the property to obtain from
the court the possession during the period of redemption; but the same provision
expressly requires the filing of a petition with the proper Court of First Instance and
the furnishing of a bond. It is only upon filing of the proper motion and the approval
of the corresponding bond that the order for a writ of possession issues as a matter of
course. No discretion is left to the court. In the absence of such a compliance, the
purchaser can not claim possession during the period of redemption as a matter of
right. In such a case, the governing provision is Section 34, Rule 39, of the Revised
Rules of Court, which also applies to properties purchased in extrajudicial foreclosure
proceedings.

While it is true that the Rules of Court allow the purchaser to receive the rentals if
the purchased property is occupied by tenants, he is, nevertheless, accountable to the
judgmentdebtor or mortgagor as the case may be, for the amount so received and the
same will be duly credited against the redemption price when the said debtor or
mortgagor effects the redemption. Differently stated, the rentals receivable from
tenants, although they may be collected by the purchaser during the redemption
period, do not belong to the latter but still pertain to the debtor or mortgagor. The
rationale for the Rule, it seems, is to secure for the benefit of the debtor or mortgagor,
the payment of the redemption amount and the consequent return to him of his
properties sold at public auction.

Since the defendants-appellants were occupying the house at the time of the auction
sale, they are entitled to remain in possession during the period of redemption
or within one year from and after 27 March 1956, the date of the auction sale, and to
collect the rents or profits during the said period.

It will be noted further that in the case at bar the period of redemption had not yet
expired when action was instituted in the court of origin, and that plaintiffs appellees
did not choose to take possession under Section 7, Act No. 3135, as amended, which
is the law selected by the parties to govern the extrajudicial foreclosure of the chattel
mortgage. Neither was there an allegation to that effect. Since plaintiffs-appellees
right to possess was not yet born at the filing of the complaint, there could be no
violation or breach thereof. Wherefore, the original complaint stated no cause of
action and was prematurely filed. For this reason, the same should be ordered
dismissed, even if there was no assignment of error to that effect. The Supreme Court
is clothed with ample authority to review palpable errors not assigned as such if it
finds that their consideration is necessary in arriving at a just decision of the case.

Torres vs. Limjap, 56 phil. 141

FACTS:

The plaintiffs alleged that the defendant violated the terms of the mortgage and that,
in consequence thereof they became entitled to the possession of the chattels and to
foreclose their mortgages thereon. Upon the petition of the plaintiffs and after the
filing of the necessary bonds, the court issued in each case an order directing the
sheriff of the City of Manila to take immediate possession of said drug stores.

The appellant attacks the validity of the stipulation in said mortgages authorizing
the mortgagor to sell the goods covered thereby and to replace them with other goods
thereafter acquired. He insists that a stipulation authorizing the disposal and
substitution of the chattels mortgaged does not operate to extend the mortgage to
after-acquired property., and that such stipulation is in contravention of the express
provision of the last paragraph of section 7 of Act No. 1508, which reads as follows:

"A chattel mortgage shall be deemed to cover only the property described therein and
not like or substituted property thereafter acquired by the mortgagor and placed in
the same depository as the property originally mortgaged, anything in the mortgage
to the contrary notwithstanding."

ISSUE:

Whether a stipulation in the chattel mortgage, extending its scope and effect to after-
acquired property, is valid and binding.

HELD:

Yes.A stipulation in the chattel mortgage, extending its scope and effect to after-
acquired property, is valid and binding where the after-acquired property is in
renewal of, or in substitution for, goods on hand when the mortgage was executed, or
is purchased with the proceeds of the sale of such goods. (11 C. J., p. 436.) A mortgage
may, by express stipulations, be drawn to cover goods put in stock in place of others
sold out from time to time. A mortgage may be made to include future acquisitions of
goods to be added to the original stock mortgaged, but the mortgage must expressly
provide that such -future acquisitions shall be held as included in the mortgage.
Where a mortgage covering the stock in trade, furniture, and fixtures in the
mortgagor's store provides that "all goods, stock in trade, furniture, and fixtures
hereafter purchased by the mortgagor shall be included in and covered by the
mortgage," the mortgage covers all after-acquired property of the classes mentioned,
and, upon foreclosure, such property may be taken and sold by the mortgagee the
same as the property in possession of the mortgagor at the time the mortgage was
executed.

Pacific Commercial Co. vs. Dela Rama, January 17, 1941

REMEDIES OF VENDOR IN AN INSTALLMENT SALE OF PERSONAL

PROPERTY
Article 1484, New Civil Code

The remedies conferred by Art. 1484 (New Civil Code) are alternative not cumulative.
As our Supreme Court held in Pacific Commercial Co. vs. Dela Rama (72 Phil. 380,
384): Los remedios que confiere el articulo son alternativos y no accumulativos, de
modo que si opta por uno de ellos se entienda que se ha renunciado a las demas.

Filipinas investment vs. Vitug

FACTS:

In the case at bar, defendant corporation, with notice to its co-defendant Vitug, Jr.
negotiated in favor of (endorsed and delivered to) plaintiff the promissory note on a
with-recourse basis whereby in case of the failure and/or refusal of the maker thereof,
defendant Vitug, Jr. to pay the obligation under the said promissory note, plaintiff
shall have the right to recourse against the said defendant corporation.

HELD:

Thus, it can be seen that the assignment made by the defendant corporation to
plaintiff of the promissory note and mortgage of defendant Vitug, Jr. was on a with-
recourse basis. In other words, there was a definite and clear agreement between
appellant (plaintiff) and appellee (defendant corporation) that should plaintiff fail to
secure full recovery from defendant Vitug, Jr., the right was reserved to plaintiff to
seek recourse for the deficiency against defendant corporation.

The transaction between plaintiff and defendant corporation was purely an ordinary
discounting transaction whereby the promissory note executed by defendant Vitug,
Jr. was negotiated by defendant corporation in favor of plaintiff for a valuable
consideration at a certain discount, accompanied by an assignment also of the chattel
mortgage executed by said defendant to secure the payment of his promissory note
and with the express stipulation that should there be any deficiency, recourse could
be had against the defendant corporation. Stated otherwise, the remedy presently
being sought is not against the buyer of the car or the defendant Vitug, Jr. but against
the seller, independently of whether or not such seller may have a right of recovery
against the buyer, which, in this case, he does not have under the Recto Law (Art.
1484, Civil Code, as amended).

What Congress seeks to protect under the Recto law are only the buyers on
installment who more often than not have been victimized by sellers who, before the
enactment of the Recto law succeeded in unjustly enriching themselves at the expense
of the buyers because aside from recovering the goods sold, upon default of the buyer
in the payment of two installments, still retained for themselves all amounts already
paid, in addition furthermore, to other damages, such as attorney's fees, and costs.
Surely Congress could not have intended to impair and much less do away with the
right of the seller to make commercial use of his credit against the buyer, provided
said buyer is not burdened beyond what the Recto law allows.

In this Cruz case (23 SCRA 791), the Supreme Court broadened the scope of the Recto
law beyond its letters and held that within its spirit, a seller of goods on installment
does not have any right of action against a third party who, in addition to the buyer's
mortgage of the goods sold, furnishes additional security for the payment of said
installments or the purchase price of said goods. As can be seen, that case of Cruz was
entirely different from this one at bar. In that case, the corporation was trying to
recover from the guarantor of the buyer, whereas in the present case, it is precisely
stipulated in effect, that the plaintiff corporation had a right of recourse against the
seller should the buyer fail to pay the assigned credit in full.

GR No. L-47249 April 18, 1941

San jose vs. Ruiz

Facts:
San Josse and Carlos deposited a jewelry as garment to the defendant which was
placed in latters agency, in secured and safe place. However, the jewelry was lost
prompting the filing of the present case. The plaintiffs alleged that it was one of the
defendants employee who stole the same.
Issue:
Whether in the loss of the jewelry there has been or is not culpable or negligence on
the part of the defendant
Held:

No. It is evident, in view of these facts, that the appealed army exercised all the care
and diligence demanded of it by law; Therefore, it can not be held responsible for the
theft of the jewels that are the subject of this litigation.
The appellants allege, however, that the Court of Appeal erred in declaring that the
loss of the jewels was by chance, notwithstanding the fact that they were stolen by a
trustworthy employee of the defendant.

The law does not require, in cases like this, the loss of the thing by chance event so
that the obliged to give it can be extricated from its obligation. It is enough to show
that in the custody and custody of the jewels the diligence of a good father of family,
such as that exercised by the defendant in this case has been exercised (article 1867
of the Civil Code).

DBP v Vda. De Moll

No. L-25802. January 31, 1972.
Facts:
DBP granted agricultural loans in favor of Sebastian Moll who in turn mortgage
Hacienda Moll. The latter died and his estate was thereafter extrajudicially
partitioned in favor of his heirs. Additional loans were granted by DBP to the heirs
(appellants).
Appellants thereafter failed to comply with the terms of the loan contracts as they
fell due. Consequently, the above-mentioned mortgages on their properties were
extra-judicially foreclosed under the provisions of Act 3135. DBP was the highest
bidder in the public auction sale. The proceeds however were insufficient. Thus, the
filing of the recovery of deficiency.
The heirs impugned the validity of the auction sale.
Issue:
WON the selling auction prices were unjust, disproportionate and unconscionable
Held:
It does appear that the purchase prices in question are considerably out of proportion
to the possible actual market value of appellants securities. Considering, however,
that the impugned sales were made subject to appellants right of redemption. Where
there is a right to redeem, inadequacy of price is not material because the judgment
debtor may re-acquire the property or else sell his right to redeem and thus recover
any loss he claims to have suffered by reason of the price obtained at the execution
sale. Mere inadequacy of the price obtained at the sheriffs sale unless shocking to
the conscience will not be sufficient also to set aside the sale if there is no showing
that, in the event of a regular sale, a better price can be obtained. This is based on
the theory that the less the price the easier it will be for the owner to effect the
redemption.
It is now well settled that an action to set aside an auction sale does not toll the
running of the period of redemption.
Once the auction sale of the mortgaged property is effected and the resulting
deficiency in the mortgage debt is ascertained, the mortgagee-creditor is then and
there entitled to secure a deficiency judgment which may immediately be executed,
whether or not the mortgagor is still entitled to redeem the property sold.

Makati Leasing and Finance Corp. vs. Wearever Textile Mills, Inc.
No. L-58469. May 16, 1983.*

Facts:
Petitioner Makati Leasing and Finance Corporation, the private respondent
Wearever Textile Mills, Inc., discounted and assigned several receivables with the
former under a Receivable Purchase Agreement. To secure the collection of the
receivables assigned, private respondent executed a Chattel Mortgage over certain
raw materials inventory as well as a machinery described as an Artos Aero Dryer
Stentering Range.
Upon private respondents default, petitioner filed a petition for extrajudicial
foreclosure of the properties mortgage to it. However, the Deputy Sheriff assigned to
implement the foreclosure failed to gain entry into private respondents premises and
was not able to effect the seizure of the aforedescribed machinery. Petitioner
thereafter filed a complaint for judicial foreclosure.
Issue:
Whether the machinery in suit is real or personal property
Held:
It was treated by the parties as Personal/Movable property. Return by mortgage
creditor of property seized on replevin does not make moot and academic the action
for judicial foreclosure where the return was expressly made to be without
prejudice.
Examining the records of the instant case, We find no logical justification to exclude
and rule out, as the appellate court did, the present case from the application of the
abovequoted pronouncement. If a house of strong materials, like what was involved
in the above Tumalad case, may be considered as personal property for purposes of
executing a chattel mortgage thereon as long as the parties to the contract so agree
and no innocent third party will be prejudiced thereby, there is absolutely no reason
why a machinery, which is movable in its nature and becomes immobilized only by
destination or purpose, may not be likewise treated as such. This is really because
one who has so agreed is estopped from denying the existence of the chattel mortgage.
In rejecting petitioners assertion on the applicability of the Tumalad doctrine, the
Court of Appeals lays stress on the fact that the house involved therein was built on
a land that did not belong to the owner of such house. But the law makes no
distinction with respect to the ownership of the land on which the house is built and
we should not lay down distinctions not contemplated by law.
Execution of chattel mortgage on machinery permanently attached to the ground is
only an equitable ground for rendering the contract voidable provided that the
mortgagor has not been benefited by the contract.

Acme Shoe, Rubber & Plastic Corp. vs. Court of Appeals

G.R. No. 103576. August 22, 1996.*
Facts:
Petitioner Chua Pac, the president and general manager of co-petitioner Acme Shoe,
Rubber & Plastic Corporation, executed on 27 June 1978, for and in behalf of the
company, a chattel mortgage in favor of private respondent Producers Bank of the
Philippines. The mortgage stood by way of security for petitioners corporate loan of
three million pesos (P3,000,000.00). A provision in the chattel mortgage agreement
states that:
xxx This mortgage shall also stand as security for said obligations and any and all
other obligations of the MORTGAGOR to the MORTGAGEE of whatever kind and
nature, whether such obligations have been contracted before, during or after the
constitution of this mortgage xxx
Issue:
Would it be valid and effective to have a clause in a chattel mortgage that purports
to likewise extend its coverage to obligations yet to be contracted or incurred?

Held:
No. Contracts of security are either personal or realin the former, the faithful
performance of the obligation by the principal debtor is secured by the personal
commitment of another while in the latter, that fulfillment is secured by an
encumbrance of property.
While a pledge, real estate mortgage, or antichresis may exceptionally secure after-
incurred obligations so long as these future debts are accurately described, a chattel
mortgage, however, can only cover obligations existing at the time the mortgage is
constituted.

GR No. L-47784 April 18, 1941

Levy hermanos, inc., v. Pacific commercial co., manuel dumdum

Facts:

The defendants bought six cars from the defendant secured by a mortgage covering
his land and house. They were not able to pay in full their obligation. The plaintiff
sought assistance from the court to satisfy their obligation. The court granted and
issued a warrant for the execution of the judgment in any other properties they have
in case of deficiency.

The mortgage goods were ordered judicially deposited. The plaintiff appealed and
argues that the court erred in excluding the real properties.

Issue:

WON the court erred

Held:

It is important to bear in mind, in order to resolve the issue raised by the appellant,
that the provisions of Law No. 4122 are as follows:

ART. 1454-A. In a contract of sale of furniture will pay in installments, failure

to pay two or more installments gives the seller the right to the resolution of
the sale or the execution of the mortgage, if it is constituted on the thing,
without refund to Buyer of the terms already paid, if so agreed.

The seller, however, who has opted for the exercise of the mortgage can not
repeat against the buyer for the loss of any balance that would have resulted
against this, being null any agreement to the contrary.

The same rules shall apply in the case of renting of furniture with purchase
option, when the lessor has chosen to remove the tenant from the enjoyment of
said furniture.
No effort is required to understand that the inclusion of the appellants in question,
the soiree and the appellants' case, in order to better ensure the payment by them of
the price of some movable goods which they bought in the appellant's installments,
Which are not other than the six cars of the Dodge brand, already mentioned, is to
thwart the true purposes of Law No. 4122. It is precisely this law, as can be deduced
from the same text, to prevent the owner of a movable thing that sells it in
installments can, besides demanding the fulfillment of the obligation ocntraida in its
favor: or to resolve the contract of sale returning to take the movable thing by the
sold, but remaining with all the partial payments that the purchaser I have done
it; Or execute the mortgage granted in your favor, Selling that in public auction to
stay with the product of its sale in addition to the payments that have been made
before; Then obtain a writ of execution to collect the balance that still results against
the buyer, in the other properties that he has.

Under this law, it is only now allowed, the seller of the movable thing, to opt for one
of these things: demand the fulfillment of the obligation of the buyer, regardless of
the mortgage that has been granted under the mortgages law; Or settle their contract
of sale, returning to take the goods movable poor sold; Or execute the mortgage,
without the right to demand from the buyer more payment than the one made with
the pipeline of sale of said goods. If you opt for the latter,