Chattel Mortgage Principles by: Pagapong, Arriola and The Shadow

MAKATI LEASING and FINANCE CORPORATION, petitioner, vs. WEAREVER TEXTILE MILLS, INC., and HONORABLE COURT OF APPEALS, respondents. Examining the records of the instant case, We find no logical justification to exclude the rule out, as the appellate court did, the present case from the application of the above quoted pronouncement. If a house of strong materials, like what was involved in the above Tumalad case, may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated as such. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. Private respondent contends that estoppel cannot apply against it because it had never represented nor agreed that the machinery in suit be considered as personal property but was merely required and dictated on by herein petitioner to sign a printed form of chattel mortgage which was in a blank form at the time of signing. This contention lacks persuasiveness. As aptly pointed out by petitioner and not denied by the respondent, the status of the subject machinery as movable or immovable was never placed in issue before the lower court and the Court of Appeals except in a supplemental memorandum in support of the petition filed in the appellate court. Moreover, even granting that the charge is true, such fact alone does not render a contract void ab initio, but can only be a ground for rendering said contract voidable, or annullable pursuant to Article 1390 of the new Civil Code, by a proper action in court. There is nothing on record to show that the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify the same. On the other hand, as pointed out by petitioner and again not refuted by respondent, the latter has indubitably benefited from said contract. Equity dictates that one should not benefit at the expense of another. Private respondent could not now therefore, be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom. FACTS: Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati Leasing and Finance Corporation covering certain raw materials and machinery. Upon default, Makati Leasing filed a petition for judicial foreclosure of the properties mortgaged. Acting on Makati Leasings application for replevin, the lower court issued a writ of seizure. Pursuant thereto, the sheriff enforcing the seizure order seized the machinery subject matter of the mortgage. In a petition for certiorari and prohibition, the Court of Appeals ordered the return of the machinery on the ground that the same can-not be the subject of replevin because it is a real property pursuant to Article415 of the new Civil Code, the same being attached to the ground by means of bolts and the only way to remove it from Wearever textiles plant

would be to drill out or destroy the concrete floor. When the motion for reconsideration of Makati Leasing was denied by the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court.

ISSUE: Whether the machinery in suit is real or personal property from the point of view of the parties.

HELD: There is no logical justification to exclude the rule out the present case from the application of the pronouncement in Tumalad v Vicencio, 41 SCRA 143. If a house of strong materials, like what was involved in the Tumalad case, may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated as such. This is really because one who has so agreed is estopped from the denying the existence of the chattel mortgage.

In rejecting petitioners assertion on the applicability of the Tumalad doctrine, the CA lays stress on the fact that the house involved therein was built on a land that did not belong to the owner of such house. But the law makes no distinction with respect to the ownership of the land on which the house is built and We should not lay down distinctions not contemplated by law.

It must be pointed out that the characterization by the private respondent is indicative of the intention and impresses upon the property the character determined by the parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable that the parties to a contract may, by agreement, treat as personal property that which by nature would be a real property as long as no interest of third parties would be prejudiced thereby.

The status of the subject matter as movable or immovable property was not raised as an issue before the lower court and the CA, except in a supplemental memorandum in support of the petition filed in the appellate court. There is no record showing that the mortgage has been annulled, or that steps were taken to nullify the same. On the other hand, respondent has benefited from the said contract.

Equity dictates that one should not benefit at the expense of another.

As such, private respondent could no longer be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom.

Therefore, the questioned machinery should be considered as personal property. BUENAVENTURA T. SALDANA, plaintiff-appellant, vs. PHILIPPINE GUARANTY COMPANY, INC., et al., defendants-appellees. Section 7 of Act No. 1508, commonly and better known as the Chattel Mortgage Law, does not demand a minute and specific description of every chattel mortgaged in the deed of mortgage but only requires that the description of the properties be such "as to enable the parties in the mortgage, or any other person, after reasonable inquiry and investigation to identify the same". Gauged by this standard, general description have been held valid by this Court. Note that the limitation found in the last paragraph of section 7 of the Chattel Mortgage Law1 on "like or subsituated properties" make reference to those "thereafter acquired by the mortgagor and placed in the same depository as the property originally mortgaged", not to those already existing and originally included at the date of the constitution of the chattel mortgage. A contrary view would unduly impose a more rigid condition than what the law prescribes, which is that the description be only such as to enable identification after a reasonable inquiry and investigation. FILIPINAS MABLE CORPORATION, petitioner, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, THE HONORABLE CANDIDO VILLANUEVA, Presiding Judge of Br. 144, RTC, Makati, DEVELOPMENT BANK OF THE PHILIPPINES (DBP), BANCOM SYSTEMS CONTROL, INC. (Bancom), DON FERRY, CASIMERO TANEDO, EUGENIO PALILEO, ALVARO TORIO, JOSE T. PARDO, ROLANDO ATIENZA, SIMON A. MENDOZA, Sheriff NORVELL R. LIM, respondents. As regards the second assignment of error, we agree with the petitioner that a mortgage is a mere accessory contract and, thus, its validity would depend on the validity of the loan secured by it. We, however, reject the petitioner's argument that since the chattel mortgage involved was not registered, the same is null and void. Article 2125 of the Civil Code clearly provides that the nonregistration of the mortgage does not affect the immediate parties. It states: Art. 2125. In addition to the requisites stated in article 2085, it is indispensable, in order that a mortgage may be validly constituted that the document in which it appears be recorded in the

Registry of Property. If the instrument is not recorded, the mortgage is nevertheless binding between the parties. FACTS: Filipinas Marble Corporation applied for a loan in the amount of $5,000,000.00 with Development Bank of the Philippines (DBP) in its desire to develop the fun potentials of its mining claims and deposits; that DBP granted the loan subject, however, to sixty onerous conditions, among which are: (a) petitioner shall have to enter into a management contract with respondent Bancom Systems Control, Inc. [Bancom]; (b) DBP shall be represented by no less than six (6) regular directors; (c) the key officers shall be appointed only with DBP's prior approval and all these officers are to be made directly responsible to DBP; and (d) the $5 Million loan shall be secured by: 1) a final mortgage; 2) the joint and several signatures with Filipinas Marble of Mr. Pelagio M. Villegas, Sr., Trinidad Villegas, and Jose E. Montelibano and 3) assignment to DBP of the borrower firm's right over its mining claims; that pursuant to these above- mentioned and other "take it or leave it" conditions, the petitioner entered into a management contract with Bancom whereby the latter agreed to manage the plaintiff company for a period of three years; that under the management agreement, the affairs of the petitioner were placed under the complete control of DBP and Bancom including the disposition and disbursement of the $5,000,000 or P37,600,000 loan; that the respondents and their directors/officers mismanaged and misspent the loan, after which Bancom resigned with the approval of DBP even before the expiration date of the management contract, leaving petitioner desolate and devastated, DBP completely abandoned the petitioner's project and proceeded to foreclose the properties mortgaged to it by petitioner without previous demand or notice.

In essence, the petitioner in its complaint seeks the annulment of the deeds of mortgage and deed of assignment which it executed in favor of DBP in order to secure the $5,000,000.00 loan because it is petitioner's contention that there was no loan at all to secure since what DBP "lent" to petitioner with its right hand, it also got back with its left hand; and that, there was failure of consideration with regard to the execution of said deeds as the loan was never delivered to the petitioner. The petitioner further prayed that pending the trial on the merits of the case, the trial court immediately issue a restraining order and then a writ of preliminary injunction against the sheriffs to enjoin the latter from proceeding with the foreclosure and sale of the petitioner's properties in Metro Manila and in Romblon.

Respondent DBP opposed the issuance of a writ of preliminary injunction stating that under Presidential Decree No. 385, DBP's right to foreclose is mandatory as the arrearages of petitioner had already amounted to P123,801,265.82 as against its total obligation of P151,957,641.72; that under the same decree, no court can issue any restraining order or injunction against it to stop the foreclosure since Filipinas Marble's arrearages had already reached at least twenty percent of its total obligations; that

the alleged non-receipt of the loan proceeds by the petitioner could, at best, be accepted only in a technical sense because the money was received by the officers of the petitioner acting in such capacity and, therefore, irrespective of whoever is responsible for placing them in their positions, their receipt of the money was receipt by the petitioner corporation and that the complaint does not raise any substantial controversy as to the amount due under the mortgage as the issues raised therein refer to the propriety of the manner by which the proceeds of the loan were expended by the petitioner's management, the allegedly precipitate manner with which DBP proceeded with the foreclosure, and the capacity of the DBP to be an assignee of the mining lease rights.

ISSUE: WHETHER OR NOT THE MORTGAGE CANNOT EXIST OR STAND BY ITSELF BEING A MERE ACCESSORY CONTRACT. YES

RULING:

We agree with the petitioner that a mortgage is a mere accessory contract and, thus, its validity would depend on the validity of the loan secured by it. We, however, reject the petitioner's argument that since the chattel mortgage involved was not registered, the same is null and void. Article 2125 of the Civil Code clearly provides that the non-registration of the mortgage does not affect the immediate parties. It states: Art. 2125. In addition to the requisites stated in article 2085, it is indispensable, in order that a mortgage may be validly constituted that the document in which it appears be recorded in the Registry of Property. If the instrument is not recorded, the mortgage is nevertheless binding between the parties.

The petitioner cannot invoke the above provision to nullify the chattel mortgage it executed in favor of respondent DBP.

***THERE WAS NO VALID CONTRACT FOR FAILURE OF CONSIDERATION. Precisely, what the petitioner is trying to point out is that the DBP and Bancom people who managed Filipinas Marble misspent the proceeds of the loan by taking advantage of the positions that they were occupying in the corporation which resulted in the latter's devastation instead of its rehabilitation. The petitioner does not question the authority under which the loan was delivered but stresses that it is precisely this authority which enabled the DBP and Bancom people to misspend and misappropriate the proceeds of

the loan thereby defeating its very purpose, that is, to develop the projects of the corporation. Therefore, it is as if the loan was never delivered to it and thus, there was failure on the part of the respondent DBP to deliver the consideration for which the mortgage and the assignment of deed were executed. NORTHERN MOTORS, INC., petitioner, vs. THE HONORABLE JORGE R. COQUIA, Executive Judge of the Court of First Instance of Manila, HONESTO ONG, THE SHERIFF OF MANILA, DOMINADOR Q. CACPAL, The Acting Executive Sheriff of Manila, and/or his duly authorized deputy sheriff or representative, FILINVEST CREDIT CORPORATION, intervenor. The registration of the chattel mortgage is an effective and binding notice to the assignee of the unsecured judgment creditor of the chattel mortgagor of its existence. The mortgage creates a real right or a lien which, being recorded, follows the chattel wherever it goes. BA FINANCE CORPORATION, petitioner, vs. HON. COURT OF APPEALS, Hon. Presiding Judge of Regional Trial Court of Manila, Branch 43, MANUEL CUADY and LILIA CUADY, respondents. B.A. Finance Corporation was deemed subrogated to the rights and obligations of Supercars, Inc. when the latter assigned the promissory note, together with the chattel mortgage constituted on the motor vehicle in question in favor of the former. Consequently, B.A. Finance Corporation is bound by the terms and conditions of the chattel mortgage executed between the Cuadys and Supercars, Inc. Under the deed of chattel mortgage, B.A. Finance Corporation was constituted attorney-in-fact with full power and authority to file, follow-up, prosecute, compromise or settle insurance claims; to sign execute and deliver the corresponding papers, receipts and documents to the Insurance Company as may be necessary to prove the claim, and to collect from the latter the proceeds of insurance to the extent of its interests, in the event that the mortgaged car suffers any loss or damage Jaca v. Davao Lumber Company Facts: Sometime in 1954, herein parties-litigants entered into an agreement whereby plaintiffs may secure, by way of advances, either cash or materials, foodstuffs, and/or equipment from the defendant corporation; that the payment of such account was to be made either in cash and/or by plaintiff's turning over all the logs that they produce in the aforesaid concession to the defendant, and in the latter case, the current prices, either export or domestic, of the logs at the time of their delivery was to be considered; that while the aforesaid business relationship between the parties was subsisting, defendant made plaintiff Urbano Jaca execute in its favor a chattel mortgage, a copy of which instrument. however, plaintiffs were never furnished but that as far as they can recollect the primary

conditions of such chattel mortgage were that plaintiffs would turn over to defendant corporation all the logs they may produce from the aforesaid concession the same to be priced either as export or domestic and their value to be applied by defendant to, and be credited for, the account of plaintiff's indebtedness, and further that in case of need, plaintiffs may secure, by way of advances, either cash, foodstuffs, materials or equipment's, under an "open credit account"; that under the aforementioned "open credit account" relationship between the plaintiffs and defendant, orders were secured by plaintiffs, by way of advances, from the defendant, this to be paid by them with plaintiffs' production from their concession, liquidating those old accounts and keeping all accounts current.

Issue: WON the chattel mortgage is valid.

Held: No. A stipulation that the security is for the payment of obligations contracted before and which may hereafter be contracted by mortgagor is void. This deed of chattel mortgage is void because it provides that the security stated therein is for the payment of any and all obligations herein before contracted and which may hereafter be contracted by the Mortgagor in favor of the Mortgagee.

Mahoney v. Tuazon Facts: D.J. Mahoney, receiver of the insolvency of P. Blanc, prayed the Court of First Instance of Manila to cite Mariano Tuason to appear and explain before the court the reason why he had in his custody the jewels of P Blanc. P. Blanc, the owner of the jewels, entered into the said contract of pledge, delivering to the creditor Mariano Tuason several jewels and other merchandise mentioned in the documents referred to, for the purpose of securing the fulfillment of the obligation which he (Blanc) had contracted in favor of the latter who had guaranteed the payment of a considerable amount of money which Blanc owed to the Chartered Bank which amount Tuason had to pay, because of Blancs obligation to do so.

Issue: WON a contract of chattel mortgage duly entered into is rendered null and void by an additional stipulation among the contracting parties that in case of the debtors failure to comply with the conditions agreed upon, the creditor would be authorized to retain the jewels and merchandise pledged in half of their value and absolutely appropriating them to himself.

Held: No. If the mortgagor defaults in the payment of the secured debt or otherwise fails to comply with the conditions of the mortgage, the creditor has no right to appropriate to himself the personal property (Arts. 2141, 2088.) because he is permitted only to recover his credit from the proceeds of the sale of the property at public auction through a public officer in the manner prescribed in Section 14 of Act No. 1508.

Makati Leasing and Finance Corp. vs. Weaver Textile Mills, Inc., Machinery and house of mixed materials treated by parties as personal property and no innocent third person will be prejudiced thereby.

Pameca Wood Treatment Plant v. CA, 310 SCRA 28 Facts: Pameca loaned P2million from DBP and executed a promissory note, secured by its inventory of furniture and equipment. A month before the mortgage contract, its supposed market value was P2.5milion. They defaulted, so DBP extrajudicially foreclosed on the chattels. It was the only bidder so it was able to buy it for around P322,000. Then for the deficiency, it filed a complaint against Pameca and its solidary debtors (Teveses and Pulido) according to the promissory note it signed The RTC-Makati ordered Pameca to pay the P4mil. CA affirmed.

Issues/Held: WON an action can be instituted for deficiency of a debt after foreclosure of the chattel mortgage. In pledge, the sale of the thing pledged extinguishes the entire principal obligation such that the pledgor may no longer recover the proceeds of the sale in excess of the amount of the principal obligation. Section 14 of the Chattel Mortgage Law, on the other hand, expressly entitles the mortgagor to the balance of the proceeds upon satisfaction of the principal obligation and costs. Since the Chattel Mortgage Law bars the creditor mortgagee from retaining the excess of the sale proceeds, there is a corollary obligation on the part of the debtor-mortgagor to pay the deficiency in case of a reduction in the price at public auction.

WON public auction sale is void on the grounds of fraud and inadequacy of price. The mere fact that the mortgagee was the sole bidder for the mortgaged property in the public sale does not warrant the conclusion that the transaction was attended with fraud. Fraud is a serious allegation that requires full and convincing evidence.

Tizon vs. Valdez and Morales Facts: This action was instituted Domiciano Tizon against Emiliano J. Valdez and Luis Morales, the latter in the character of sheriff of Tarlac Province, for the purpose of obtaining a declaration to the effect that the plaintiff is the owner of certain chattels, consisting chiefly of a steam engine and boiler, and to require the defendants to deliver the same to the plaintiff, with damages for the detention thereof and costs. The personal property which is the subject of this action formerly belonged to one Leon Sibal, Sr., by whom it was mortgaged, on September 14, 1920, to the defendant Valdez. On October 7, 1920, this mortgage was filed in the office of the register of the Province of Tarlac and was thereupon duly registered in the registry of chattel mortgages. On May 18, 1921, Sibal again mortgaged the same chattels to the plaintiff, Domiciano Tizon, whose mortgage was likewise duly registered in the chattel mortgage registry of Tarlac in June, 1921. When the stipulated date of payment arrived Sibal defaulted in the making of payment, and Valdez thereupon instituted a civil action (case No. 2301) to recover the indebtedness, in connection with which he sued out a writ of attachment and on June 24, 1921, caused the same to be levied upon the property which is the subject of this action. The property, however, was not retained by the attaching officer for the reason that Tizon gave a counter bond and lifted the attachment. The end of this civil action was that, on March 7, 1923, Valdez recovered of Sibal the sum of P19,026.24, with interest at 12 per centum per annum on P15,187.12 from August 1, 1921. Upon this judgment Valdez caused an execution to be issued, which, on April 24, 1924, was levied upon the property now in question, being the same property included in Valdez's chattel mortgage.

Meanwhile Domiciano Tizon, proceeding under his own mortgage, had caused the sheriff to sell the same property in a foreclosure proceeding conducted in conformity with the provisions of the Chattel Mortgage law (Act No. 1508, sec. 14). The sale in these proceedings was effected on June 28, 1923, Tizon becoming purchaser for the consideration of P1,000. As purchaser at his own foreclosure sale, Tizon assumed possession of the property, and it was found in his possession when the sheriff levied upon it by virtue of the execution issued in the civil case No. 2301, above mentioned. At the time this levy was made, or soon thereafter, Tizon filed a claim with the sheriff, asserting that the property belonged to him and was not liable to be taken upon an execution directed against Sibal. The sheriff, however, under indemnity from Valdez, retained the property and sold it in due course at an execution

sale, Valdez becoming purchaser at the price of P500. Pursuant to this sale Valdez now took possession, and Tizon presently instituted the present action.

Issue: WON the petitioner as the second mortgagee can recover the property.

Held: Generally, no. Before payment of debt. After a chattel mortgage is executed, there remains in the mortgagor a mere right of redemption and only this right passes to the second mortgagee in case of a second mortgage. As between the first and second mortgagees, therefore, the latter can only recover the property from the former by paying him the mortgage debt. Even when the second mortgagee goes through the formality of an extrajudicial foreclosure, the purchaser acquires no more than the right of redemption from the first mortgagee. After payment of debt. If the only leviable or attachable interest of a chattel mortgagor in a mortgaged property is his right of redemption, it follows that the judgment or attaching creditor who purchased the property at the execution sale could not acquire anything except such right of redemption. He is not entitled to the actual possession and delivery of the property without first paying the mortgage debt. BA Finance Corp. vs. CA July 5, 1996

Replevin, broadly understood, is both a form of principal remedy and of a provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold it pendente lite.[20] The action is primarily possessory in nature and generally determines nothing more than the right of possession. Replevin is so usually described as a mixed action, being partly in rem and partly in personam-in rem insofar as the recovery of specific property is concerned, and in personam as regards to damages involved. As an "action in rem," the gist of the replevin action is the right of the plaintiff to obtain possession of specific personal property by reason of his being the owner or of his having a special interest therein.[21] Consequently, the person in possession of the property sought to be replevied is ordinarily the proper and only necessary party defendant, and the plaintiff is not required to so join as defendants other persons claiming a right on the property but not in possession thereof. Rule 60 of the Rules of Court allows an application for the immediate possession of the property but the plaintiff must show that he has a good legal basis, i.e., a clear title thereto, for seeking such interim possession.

Where the right of the plaintiff to the possession of the specific property is so conceded or evident, the action need only be maintained against him who so possesses the property. In rem actio est per quam rem nostram quae ab alio possidetur petimus, et semper adversus eum est qui rem possidet. In Northern Motors, Inc. vs. Herrera,[22] the Court has said: "There can be no question that persons having a special right of property in the goods the recovery of which is sought, such as a chattel mortgagee, may maintain an action for replevin therefor. Where the mortgage authorizes the mortgagee to take possession of the property on default, he may maintain an action to recover possession of the mortgaged chattels from the mortgagor or from any person in whose hands he may find them."[23] In effect then, the mortgagee, upon the mortgagor's default, is constituted an attorney-in-fact of the mortgagor enabling such mortgagee to act for and in behalf of the owner. Accordingly, that the defendant is not privy to the chattel mortgage should be inconsequential. By the fact that the object of replevin is traced to his possession, one properly can be a defendant in an action for replevin. It is here assumed that the plaintiff's right to possess the thing is not or cannot be disputed.

In case the right of possession on the part of the plaintiff, or his authority to claim such possession or that of his principal, is put to great doubt (a contending party might contest the legal bases for plaintiff's cause of action or an adverse and independent claim of ownership or right of possession is raised by that party), it could become essential to have other persons involved and accordingly impleaded for a complete determination and resolution of the controversy.

A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the possession of the property unless and until the mortgagor defaults and the mortgagee thereupon seeks to foreclose thereon. Since the mortgagee's right of possession is conditioned upon the actual fact of default which itself may be controverted, the inclusion of other parties, like the debtor or the mortgagor himself, may be required in order to allow a full and conclusive determination of the case. When the mortgagee seeks a replevin in order to effect the eventual foreclosure of the mortgage, it is not only the existence of, but also the mortgagor's default on, the chattel mortgage that, among other things, can properly uphold the right to replevy the property. The burden to establish a valid justification for that action lies with the plaintiff. An adverse possessor, who is not the mortgagor, cannot just be deprived of his possession, let alone be bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up an action for replevin.

Morido vs. RFC and the Provincial Sheriff of Samar

May 29, 1959

A mortagagee who sues and obtains a personal judgement against a mortgagor upon his credit waives thereby his right to enforce the mortgage securing it. By instituting a amount of the loan from the mortgagor, and by securing a judgement in his favor upon the compromise agreement entered into by and between him and the morgagor, the mortgagee abandoned his mortgage lien on the chattels in question.

Bicol Savings and Loan Association vs. Guinhawa

August 20, 1990

In a number of cases, We already held that if in an extrajudicial foreclosure of a chattel mortgage a deficiency exists, an independent civil action may be instituted for the recovery of said deficiency. If the mortgagee has foreclosed the mortgage judically, he may ask for the execution of the judgment against any other property of the mortgagor for the payment of the balance. To deny to the mortgagee the right to maintain an action to recover the deficiency after foreclosure of the chattel mortgage would be to overlook the fact that the chattel mortgage is only given as a security and not as payment for the debt in case of failure of payment.

The case of Pascual, as cited by the respondent court, is not applicable in this instant case because it was a case of sale on installment, where after foreclosure of the units the plaintiffsguarantors who had likewise executed a real estate mortgage of up to P50,000, cannot be held answerable anymore for the deficiency. The conclusion therefore reached by the lower court was erroneous because in the case at bar, the obligation contracted by the principal debtor (Depositario) with a solidary co-maker (private respondent herein), was one of loan secured by a chattel mortgage, executed by the principal debtor, and not a sale where the price is payable on installments and where a chattel mortgage on the thing sold was constituted by the buyer and, further, the obligation to pay the installments having been guaranteed by another.

Under Article 1216 of the Civil Code, the creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. And therefore, where the private respondent binds himself solidarily with the principal debtor to pay the latter's debt, he may be proceeded against by the principal debtor. Private respondent as solidary co-maker is also a surety (Art. 2047) and that under the law, the bringing of an action against the principal debtor to enforce the payment of the obligation is not inconsistent with, and does not preclude, the bringing of another action to compel the surety to fulfill his obligation under the agreement.