Universal Motors Corp. vs.
Velasco HELD:
G.R. No. L-25140, July 15, 1980 In stipulating that the sums adjudged - P971.41, premium on replevin bond;
Abad Santos, J. P300.00, sheriff's expenses; P132.00, costs of the suit (total P1,403.47); and
P500.00, attorney's fees - the lower court relied on the provisions of Art. 1484
DOCTRINE: Art. 1484, Par. 3 is not applicable to recover on any ex- of the Civil Code which insofar as relevant reads as follows:
penses incurred during litigation.
"Art. 1484. In a contract of sale of personal property the price of
FACTS: which is payable in installments, the vendor may exercise any of the
Mariano T. Velasco bought from Universal Motors Corporation following remedies.
a Mercedes-Benz truck on installment basis. To secure the bal-
ance of the purchase price of P35,243.68 he executed a prom- xxx xxx xxx
issory note and executed a chattel mortgage over the truck.
He defaulted in his payments and as a consequence the vendor asked (3) Foreclose the chattel mortgage on the thing sold, if one has been
him to surrender the truck in accordance with the terms and condi- constituted, should the vendee's failure to pay cover two or more in-
tions of the chattel mortgage contract. stallments. In this case, he shall have no further action against the
He failed and refused to surrender the truck. The vendor instituted purchaser to recover any unpaid balance of the price. Any agree-
an action in the court a quo to recover the truck preparatory to fore- ment to the contrary shall be void."
closure of the chattel mortgage. As an alternative, in case the truck
could not be recovered, the plaintiff asked for the payment, among The third paragraph of Art. 1484 is inapplicable to the case at
bar. First, as the plaintiff has correctly pointed out, the action insti-
other things, of its value in the sum of P23,763.09 plus legal interest.
tuted in the court a quo was not for foreclosure of the chattel mort-
The action which was commenced on December 29, 1964, the de-
gage but for replevin; and second, the amounts adjudged in favor of
fendants failed to answer the complaint within the reglementary pe- the plaintiff were not part of the "unpaid balance of the purchase
riod and were declared in default. price" or in the concept of a deficiency judgment but were for ex-
On April 26, 1965, defendant Velasco filed a motion to lift the default penses of the suit.
order which was granted. He did not, however, file an answer.
RTC: ruled in favor of Universal Motors and ordered Velasco to pay. WHEREFORE, the judgment appealed from is modified by ordering
The plaintiff filed a motion requesting that the Court "recon- the defendant-appellee Mariano D. Velasco to pay the amounts ad-
sider its decision dated June 28, 1965, by requiring the de- judged in favor of the plaintiff-appellant instead of having the same
fendant to pay plaintiff directly the sums of P1,403.47 and satisfied out of the proceeds of the auction sale on the mortgaged
P500.00 instead of ordering the satisfaction of the same from motor vehicle.
the proceeds of the auction sale.
The motion was denied, hence, the present appeal CONCURRING OPINION:
ISSUE/S: AQUINO, J.:
1. WON the sums adjudged in favor of the plaintiff are to be
satisfied only from the proceeds of the auction sale of the I concur. The action filed by the mortgagee was a collection suit with
mortgaged vehicle subject matter of the litigation. NO replevin as a provisional remedy. The action was not for judicial fore-
closure of the mortgage. Repossession of the truck by means of re-
plevin was a preliminary step to extrajudicial foreclosure.
The expenses of the foreclosure proceeding would be deducted from
the proceeds of the sale. Those expenses are distinct from the bond
premium, etc. and attorney's fees totalling P1,903.47 adjudged in the
replevin suit which should be paid directly by Mariano D. Velasco, the
mortgagee.
