Acetylene Co. p-rchsed p-rchsed Chevrolet 1909 *odel ro* Alender Alender Li* evidenced y #eed o le% 3ith P24%444&do3npy*ent nd P5,%2+6.84&lnce% pyle -nder the ter*s nd conditions conditions o the pro*issory note t *onthly instll*ent o P1%450.64 or 5+ *onths% d-e nd py pyle le on the irst irst dy dy o ech ech *onth *onth strti strtin/ n/ #ece* #ece*e err 1961 1961 throthro-/h /h nd nd incl-s incl-sive ive epte*er 1% 196+ 3ith 127 interest per nn-* on ech -npid instll*ent% nd ttorneys ees e-ivlent to 2,7 o the totl o the o-tstndin/ -npid *o-nt. Acetylene Co. eec-ted eec-ted chttel *ort//e over the s*e *otor vehicle in vor o Li* s sec-rity or the py*ent o sid pro*issory note. Li* ssi/ned ll his ri/hts% title% nd interests in the pro*issory note nd chttel *ort//e to the Filinvest Finnce Corportion y virt-e o #eed o Assi/n*ent. Filinvest Finnce Corportion ssi/ned ll its r i/hts% title% nd interests on the oresid pro*issory note nd chttel *ort//e to the ne3 corportion% Filinvest Credit Corportion 3hich% 3hich% in eect% the py*ent o the -npid lnce o3ed y Acetylene Co. to Alender Li* 3s innced y Filinvest Credit. Acetylene Co. iled to co*ply 3ith the ter*s nd conditions conditions set orth in the pro*issory note nd chttel *ort//e since it hd de-lted in the py*ent o nine s-ccessive instll*ents. Filinvest sent de*nd letter to Acetylene to re*it the *o-nt in -ll incl-din/ interests nd chr/es or ret-rn the *ort//ed property to Li* 3ithin ive dys ro* dte o the letter. Acetylene 3rote c:% dvisin/ Filinvest o its decision to ret-rn the *ort//ed *ort//ed property% 3hich 3hich ret-rn shll e in -ll stisction o its indetedness p-rs-nt to Art. 1+8+. !he *ort//ed vehicle 3s ret-rned to Filinvest 3ith the doc-*ent ;Vol-ntry -rrender 3ith pecil Po3er o Attorney to ell; eec-ted y Acetylene. Filinv Filinvest est%% ho3eve ho3ever% r% co-ld not sell sell the vehic vehicle le s there there 3ere 3ere -npi -npid d te tes s on it% nd nd th-s th-s re-ested Acetylene to settle the instll*ents in rrers nd ccr-in/ interest o P+%252.21 on or eore April 9% 1965. Filinvest oered to deliver c: the *otor vehicle -t Acetylene re-sed to ccept it.
!h-s% Filinvest instit-ted n ction or collection o s-* o *oney 3ith d*/es in the CFI o <nil. Acetylene Co. vers tht Filinvest hs no c-se o ction /inst it since its oli/tion to3rds Filinvest 3s etin/-ished 3hen in co*plince 3ith Filinvest=s de*nd letter% it ret-rned the *ort//ed *ort//ed property to the Filinvest% nd tht ss-*in/ r/-endo r/-endo tht the ret-rn o the property did not etin/-ish its oli/tion% it 3s nonetheless >-stiied in re-sin/ py*ent since the Filinvest is not entitled to recover the s*e d-e to the rech o 3rrnty co**itted y the ori/inl vendor&ssi/nor Li*. !he CFI r-led in vor o Filinvest. 'ence% this ppel% certiied y the CA to C d-e to only -estions o l3% y Acetylene Co. Consistent 3ith its stnd in the CFI% Acetylene Co. reitertes its *in contention tht Filinvest% ter /ivin/ Acetylene Co. n option either to re*it py*ent in -ll pl-s stip-lted interests nd chr/es or ret-rn the *ort//ed *otor vehicle% hd elected the lterntive re*edy o ectin/ -lill*ent o the oli/tion% th-s% precl-din/ the eercise o ny other re*edy provided or -nder Article 1+8+ 1+8+ o the Civil Code o the Philippines? Philippines? ;Article 1+8+. Civil Code In contrct o sle o personl property the price o 3hich is pyle in instll*ents% the vendor *y eercise ny o the ollo3in/ re*edies? 1) Ect -lill*ent o the oli/tion% sho-ld the vendee il to py@ 2) Cncel the sle% sho-ld the vendees il-re to py cover t3o or *ore instll*ents@ 5) Foreclose the chttel *ort//e on the thin/ sold% i one hs een constit-ted% sho-ld the vendees il-re to py cover t3o or *ore instll*ents. In this cse% he shll hve no -rther ction /inst the p-rchser p-rchser to recover ny -npid lnce o the price. Any /ree*ent to the contrry shll e void.; In s-pport o the ove contention% Acetylene Co. *intins tht 3hen it opted to ret-rn% s in ct it did ret-rn% the *ort//ed *otor vehicle to the Filinvest% sid ret-rn necessrily hd the eect o etin/-ishin/ Acetylene Acetylene Co.s oli/tion or the -npid price to the Filinvest% constr-in/ the ret-rn to nd cceptnce y the Filinvest o the *ort//ed *otor vehicle s *ode o py*ent% speciiclly% dtion in py*ent or dcion en p/o 3hich ccordin/ to Acetylene Co.% virt-lly *de Filinvest the o3ner o the *ort//ed *otor vehicle y the *ere delivery thereo% citin/ Articles 1252% 12+,% nd 1+96 o the Civil Code. ;Article 1252. Py*ent *ens not only the delivery o *oney -t lso the peror*nce% peror*nce% in ny *nner% o n oli/tion. ;Artic ;Article le 12+, 12+,.. #tio #tion n in py*e py*ent% nt% 3here 3herey y prope property rty is lien liente ted d to the credi creditor tor in stisction o det in *oney% shll e /overned y the l3 o sles.
;Article 1+96. !he thin/ sold shll e -nderstood s delivered% 3hen it is plced in the control nd possession o the vendee.; ISSUE/S: •
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oN the ret-rn o the *ort//ed *otor vehicle to the ppellee y virt-e o its vol-ntry s-rrender y the ppellnt totlly etin/-ished ndBor cncelled its oli/tion to the ppellee (dtion in py*ent) o N$. !he *ere ret-rn o the *ort//ed *otor vehicle y the *ort//or% Acetylene Co.% to the *ort//ee% *ort//ee% Filinvest% does not constit-te constit-te dtion in py*ent or dcion en p/o in the sence% epress or i*plied o the tr-e intention o the prties. o cion en p/oD relly prt:es in one sense o the nt-re o sle% tht is% the creditor is relly -yin/ the thin/ or property o the detor% py*ent or 3hich is to e chr/ed /inst the detors det. As s-ch% the essentil ele*ents o contrct o sle% n*ely% consent% o>ect certin% nd c-se or considertion *-st e present. In its *odern concept% 3ht ct-lly t:es plce in dcion en p/o is n o>ective novtion o the oli/tion 3here the thin/ oered s n ccepted e-ivlent o the peror*nce o n oli/tion is considered s the o>ect o the contrct o sle% 3hile the det is considered considered s the p-rchse price. In ny cse% co**on consent is n essentil prere-isite% prere-isite% e it sle or novtion% to hve the eect o totlly etin/-ishin/ the det or oli/tion. o !he !he evid eviden ence ce on the the reco record rd il ils s to sho3 sho3 tht tht the the *ort *ort/ //e /ee% e% Fili Filinv nves est% t% consented% or t lest intended% tht the *ere delivery to% nd cceptnce y hi*% o the *ort//ed *otor vehicle e constr-ed s ct-l py*ent% *ore speciiclly dtion in py*ent or dcion en p/o. o I t ll% only trnser o possession o the *ort//ed *otor vehicle too: plce. o An e*intion o the ln/-/e o the ;Vol-ntry ;Vol-ntry -rrender 3ith pecil Po3er o Attorney !o ell; revels tht the possession o the *ort//ed *otor vehicle 3s vol-ntrily s-rrendered y the Acetylene Co. to the Filinvest -thoriin/ the ltter to loo: or -yer nd sell the vehicle in ehl o the Acetylene Co. 3ho retins o3nership thereo% thereo% nd to pply the proceeds o the sle to the *ort//e indetedness% 3ith the -ndert:in/ o the Acetylene Co. to py the dierence% i ny% et3een the sellin/ price nd the *ort//e oli/tion. ith the stip-lted conditions s stted% the Filinvest% in essence 3s constit-ted s *ere /ent to sell the *otor vehicle 3hich 3s delivered to the Filinvest% not s its property% or or i it 3ere% he 3o-ld hve -ll po3er o disposition o the property% not only to sell it s is the li*ited -thority /iven hi* in the specil po3er o ttorney. oN% oN% s Acetylene Acetylene Co. r/-ed% r/-ed% y cceptin cceptin/ / the delivery o the *ort//ed *ort//ed *otor *otor vehicle% Filinvest is estopped ro* de*ndin/ py*ent o the -npid oli/tion. o N$. Filinvest never ccepted the *ort//ed *otor vehicle in -ll stisction o the *ort//ed det. nder the l3% the delivery o possession o the *ort//ed property to the *ort//ee% Filinvest% cn only operte to etin/-ish ppellnts liility i the ppellee hd ct-lly c-sed the oreclos-re sle o the *ort//ed property 3hen it recovered possession thereo.
!he ct o oreclos-re nd ct-l sle o the *ort//ed chttel tht r the recovery y the vendor o ny lnce o the p-rchsers o-tstndin/ oli/tion not stisied y the sle. As held y the CD% i the vendor desisted% on his o3n inititive% ro* cons-**tin/ the -ction sle% s-ch desistnce 3s ti*ely disvo3l o the re*edy o oreclos-re% nd the vendor cn still s-e or speciic peror*nce. !his is ectly 3ht hppened here. oN the 3rrnty or the -npid tes on the *ort//ed *otor vehicle *y e properly rised nd i*p-ted to or pssed over to Filinvest o N$. !he #eed o le et3een Alender Li* nd ppellnt nd the #eed o Assi/n*ent Assi/n*ent et3een Alende Alenderr Li* nd ppellee re very very cler on this pointG.I pointG.I it ppers s-se-ently tht ;there re s-ch co-ntercli*s% osets or deenses tht tht *y e interp interpos osed ed y the the det detor or t the the ti*e ti*e o the ssi/n* ssi/n*en ent% t% s-ch s-ch co-ntercli*s% osets or deenses shll not pre>-dice the FILINVE! FINANCE C$"P$ C$"P$"A "A!I !I$N $N nd nd I (Ale (Alend nder er Li*) Li*) -rth -rther er 3rr 3rrnt nt nd nd hold hold the sid sid corportion ree nd hr*less ro* ny s-ch cli*s% osets% or deenses tht *y e viled o.; o
