Delta Motor Sales Corp and Tajanlangit

DELTA MOTOR SALES CORP. v NIU KIM DUAN FACTS: Niu Kim Duan purchased from Delta Motors 3 air conditioning units. Niu paid the down payment, the balance payable in 24 instalments. Title to the property remained with Delta until the payment of the full purchase price. Under the agreement, failure to pay 2monthly instalments makes the obligation entirely due and demandable. The units were delivered, Niu failed to pay. Thus, Delta filed a complaint for Replevin and applied the installments paid by Niu as rentals. Niu contends that the contractual stipulations are unconscionable. ISSUE: W/N the remedy Delta availed of was unconscionable HELD: NO. A stipulation in the contract treating installments as rentals in case of failure to pay is VALID — so long as they are not unconscionable. The provision in this case is reasonable. An unpaid seller has 3 alternative (not cumulative) remedies: (1) to exact fulfilment of the obligation; (2) to cancel the sale for default in 2 installments; and (3) to foreclose the chattel mortgage. If the creditor chooses one remedy, he cannot avail himself of the other two. It is not disputed that the plaintiff-appellee had taken possession of the three air-conditioners, through a writ of replevin when defendants-appellants refused to extra-judicially surrender the same. This was done pursuant to paragraphs 5 and 7 of its Deed of Conditional Sale when defendants-appellants failed to pay at least two (2) monthly installments, so much so that as of January 6, 1977, the total amount they owed plaintiff-appellee, inclusive of interest, was P12,920.08. 12 The case plaintiff- appellee filed was to seek a judicial declaration that it had validly rescinded the Deed of Conditional Sale. Clearly, plaintiff-appellee chose the second remedy of Article 1484 in seeking enforcement of its contract with defendants-appellants. This is shown from the fact that the computation of the outstanding account of defendants-appellants as of October 3, 1977 took into account "the value of the units repossessed." Having done so, it is barred from exacting payment from defendants-appellants of the balance of the price of the three air-conditioning units which it had already repossessed. TAJANLANGIT v SOUTHERN MOTORS FACTS: Tajanlangit bought 2 tractors and a thresher from Southern Motors. They executed a promissory note in payment thereof; it contained an acceleration clause. Tajanlang it failed to pay any of the stipulated installments. Thus, Southern Motors sued him on the PN. The sheriff levied upon the properties of Tajanlangit (same machineries) and sold them at a public auction to satisfy the debt. Southern Motors now prayed for execution. Tajanlangit sought to annul the writ of execution — claiming that since Southern Motors repossessed the machineries (mortgaged), he was therefore relieved from liability on the balance of the purchase price. ISSUE: W/N Tajanlangit is relieved from his obligation topay HELD: NO. While it is true that the foreclosure on the chattel mortgage on the thing sold bars further action for the recovery of the balance of the purchase price, this does not apply in this case since Southern did not foreclose on the mortgage but instead sued based on the PNs exclusively. That being the case, it is not limited to the proceeds of the sale on execution of the mortgaged goods and may claim the balance from Tajanlangit.

Delta Motor Sales Corp and Tajanlangit

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