Macondray & Co. v. Feliciano Benito

Summary

Macondray & Co., Inc. sold personal property to defendants Benito and Ocampo on installment plan with chattel mortgage security. When defendants defaulted on payments, plaintiff foreclosed the mortgage and recovered P550 at auction, then sued for the remaining P2,500+ balance. The Supreme Court affirmed the trial court's dismissal, holding that under Article 1454-A of the Civil Code (Act No. 4122), a vendor who chooses to foreclose a chattel mortgage on installment sale property cannot pursue the purchaser for any unpaid balance. This landmark decision established the anti-deficiency rule for installment sales of personal property, protecting purchasers from double recovery by limiting vendors to either cancellation or foreclosure remedies, but not both. The ruling significantly impacted commercial installment financing practices in the Philippines.