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    La Fuerza V CA

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    bee tiful
    The plaintiff sold a car to the defendant, who made an initial payment and signed a promissory note for the balance due in 4 months. To secure payment, defendant mortgaged the car but later defaulted. Plaintiff foreclosed the mortgage, sold the car, and sued to recover the unpaid balance. The court ruled for the plaintiff, finding that this was a straight term sale, not an installment sale as outlined in Article 1454-A, and therefore the plaintiff could recover the unpaid balance despite foreclosing the mortgage.

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    La Fuerza V CA

    Uploaded by

    bee tiful
    86 views2 pages
    The plaintiff sold a car to the defendant, who made an initial payment and signed a promissory note for the balance due in 4 months. To secure payment, defendant mortgaged the car but later defaulted. Plaintiff foreclosed the mortgage, sold the car, and sued to recover the unpaid balance. The court ruled for the plaintiff, finding that this was a straight term sale, not an installment sale as outlined in Article 1454-A, and therefore the plaintiff could recover the unpaid balance despite foreclosing the mortgage.

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    288902928-La-Fuerza-v-CA.docx

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    The plaintiff sold a car to the defendant, who made an initial payment and signed a promissory note for the balance due in 4 months. To secure payment, defendant mortgaged the car but later defaulted. Plaintiff foreclosed the mortgage, sold the car, and sued to recover the unpaid balance. The court ruled for the plaintiff, finding that this was a straight term sale, not an installment sale as outlined in Article 1454-A, and therefore the plaintiff could recover the unpaid balance despite foreclosing the mortgage.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    86 views2 pages

    La Fuerza V CA

    Uploaded by

    bee tiful
    The plaintiff sold a car to the defendant, who made an initial payment and signed a promissory note for the balance due in 4 months. To secure payment, defendant mortgaged the car but later defaulted. Plaintiff foreclosed the mortgage, sold the car, and sued to recover the unpaid balance. The court ruled for the plaintiff, finding that this was a straight term sale, not an installment sale as outlined in Article 1454-A, and therefore the plaintiff could recover the unpaid balance despite foreclosing the mortgage.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Hermanos v Gervacio

    October 27, 1939 | Moran, J. | Appeal| Breach of contracts -> Meaning of Installment Sale

    Plaintiff-appellee: Levy Hermanos, Inc.


    Defendant-appellant: Lazaro Blas Gervacio

    SUMMARY: Defendant bought car from plaintiff and made the first payment. Promisory note was executed for the
    fulfillment of the payment of the balance; secured payment by mortgaging the subject property. Defendant defaulted in
    payment, so plaintiff foreclosed mortgage; sued defendant for the balance of the car. Court ruled for the plaintiff.

    DOCTRINE: Art. 1454-A of the Civil Code, which bars plaintiff from recovering unpaid balance for the property after
    foreclosure, only applies to sales on installment or those sales where the price is payable in several installments

    FACTS: installments and that there has been a failure to pay two
    1. On Macrh 10, 1937, Hermanos sold a Packard car to or more installments." (Macondray and Co. vs. De
    Gervacio. Gervacio made the initial payment and Santos)
    executed a promisory note due on June 15, 1937 for the 2. The contract between Hermanos and Gervacio is a
    balance of P2,400. To secure payment, defendant sale of personal property but not a sale on installments.
    executed a mortgage on the car; he failed to pay on the It is a straight term sale, in which the balance, after
    maturity date of the PN. Plaintiff foreclosed the payment of the initial sum, should be paid in its totality
    mortgage and the car was sold at a public auction, with at the time specified in the promissory note. Act 4122 is
    Hermanos as the highest bidder for P1,800. only applicable to a sale on installments - those sales
    2. Hermanos now seeks to collect payment of the where the price is payable in several installments.
    balance of P1,600 + interest. 3. Rationale: it is in the cases of installment sales that
    3. Trial Court ruled for the defendant, applying Art. partial payments consist in relatively small amounts,
    1454-A1 (from Act No. 4122) of the Civil Code, which constituting thus a great temptation for improvident
    bars recovery of the unpaid balance once the vendor has purchasers to buy beyond their means. Such temptation
    chosen to foreclose the mortgage. does not arise from straight term sales, because partial
    paymnets are not so small.

    ISSUE/S:

    WON contract between the parties is one of an


    installment sale (or WON trial court correct in applying
    Art. 1454-A) – NO

    HELD: Gervacio is sentenced to pay plaintiff-


    appellant the sum of P1,600 with interest at the
    rate of 12 per cent per annum

    RATIO:
    1. “In order for the provisions of article 1454-A of the
    Civil Code to apply, it must appear that there was a
    contract for the sale of personal property payable in

    1
    In a contract for the sale of personal property payable in
    installments shall confer upon the vendor the right to cancel
    the sale or foreclose the mortgage if one has been given on
    the property, without reimbursement to the purchaser of the
    installments already paid, if there be an agreement to this
    effect.

    However, if the vendor has chosen to foreclose the mortgage


    he shall have no further action against the purchaser for the
    recovery of any unpaid balance owing by the same and any
    agreement to the contrary shall be null and void.

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