Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-46306 October 27, 1939
LEV !ERM"NOS, #NC., plaintiff-appellant,
vs.
L"$"RO %L"S GERV"C#O, defendant-appellee.
Felipe Caniblas for appellant.
Abreu, Lichaucco and Picazo for appellee.

MOR"N, J.:
On Februar !-", #!$%, plaintiff filed a co&plaint in the Court of First 'nstance of
Manila, (hich substantiall recites the follo(in) facts*
On March #+, #!$,, plaintiff -ev .er&anos, 'nc., sold to defendant -a/aro Blas
0ervacio, a Pac1ard car. 2efendant, after &a1in) the initial pa&ent, e3ecuted a
pro&issor note for the balance of P4,"++, paable on or before 5une #6, #!$,,
(ith interest at #4 per cent per annu&, to secure the pa&ent of the note, he
&ort)a)ed the car to the plaintiff. 2efendant failed to pa the note it its &aturit.
7herefore, plaintiff foreclosed the &ort)a)e and the car (as sold at public auction,
at (hich plaintiff (as the hi)hest bidder for P#,%++. 8he present action is for the
collection of the balance of P#,9++ and interest.
2efendant ad&itted the alle)ations of the co&plaint, and (ith this ad&ission, the
parties sub&itted the case for decision. 8he lo(er court applied, the provisions of
Act No. "#44, inserted as articles #"6"-A of the Civil Code, and rendered :ud)&ent
in favor of the defendant. Plaintiff appealed.
Article #"6"-A of the Civil Code reads as follo(s*
'n a contract for the sale of personal propert paable in install&ents shall confer
upon the vendor the ri)ht to cancel the sale or foreclose the &ort)a)e if one has
been )iven on the propert, (ithout rei&burse&ent to the purchaser of the
install&ents alread paid, if there be an a)ree&ent to this effect.
.o(ever, if the vendor has chosen to foreclose the &ort)a)e he shall have no
further action a)ainst the purchaser for the recover of an unpaid balance o(in)
b the sa&e and an a)ree&ent to the contrar shall be null and void.
'n Macondray and Co. vs. De Santos ;$$ Off. 0a/., 4#,+<, (e held that =in order to
appl the provisions of article #"6"-A of the Civil Code it &ust appear that there
(as a contract for the sale of personal propert paable in install&ents and that
there has been a failure to pa t(o or &ore install&ents.= 8he contract, in the
instant case, (hile a sale of personal propert, is not, ho(ever, one on install&ents,
but on strai)ht ter&, in (hich the balance, after pa&ent of the initial su&, should
be paid in its totalit at the ti&e specified in the pro&issor note. 8he transaction is
not is not, therefore, the one conte&plated in Act No. "#44 and accordin)l the
&ort)a)ee is not bound b the prohibition therein contained as to the ri)ht to the
recover of the unpaid balance.
>ndoubtedl, the la( is ai&ed at those sales (here the price is paable in several
install&ents, for, )enerall, it is in these cases that partial pa&ents consist in
relativel s&all a&ounts, constitutin) thus a )reat te&ptation for i&provident
purchasers to bu beond their &eans. 8here is no such te&ptation (here the
price is to be paid in cash, or, as in the instant case, partl in cash and partl in one
ter&, for, in the latter case, the partial pa&ents are not so s&all as to place
purchasers off their )uard and delude the& to a &iscalculation of their abilit to
pa. 8he oreticall, perhaps, there is no difference bet(een pain) the price in to(
install&ents, in so far as the si/e of each partial pa&ent is concerned? but in
actual practice the difference e3ists, for, accordin) to the re)ular course of
business, in contracts providin) for pa&ent of the price in t(o install&ents, there
is )enerall a provision for initial pa&ent. But all these considerations are
i&&aterial, the lan)ua)e of the la( bein) so clear as to re@uire no construction at
all.lphi!.n"t
8he su))estion that the cash pa&ent &ade in this case should be considered as
an install&ent in order to brin) the contract sued upon under the operation of the
la(, is co&pletel untenable. A cash pa&ent cannot be considered as a pa&ent
b install&ent, and even if it can be so considered, still the la( does not appl, for it
re@uires non-pa&ent of t(o or &ore install&ents in order that its provisions &a
be invo1ed. .ere, onl one install&ent (as unpaid.
5ud)&ent is reversed, and the defendant-appellee is hereb sentenced to pa
plaintiff-appellant the su& of P#,9++ (ith interest at the rate of #4 per cent per
annu& fro& 5une #6, #!$,, and the su& of P64.+% (ith interest at the rate of 9 per
cent fro& the date of the filin) of the co&plaint, (ith costs in both instances a)ainst
the appellee.
Avance#a, C.$., %illa&'eal, ()perial, Diaz and Concepcion, $$., concur.