GR 43861; (September, 1938) (Digest)
G.R. No. 43861; September 26, 1938
THE MANILA TRADING AND SUPPLY COMPANY, plaintiff-appellee, vs. TOMAS SANTOS and GENARO D. SAEZ, defendants-appellants.
FACTS
Plaintiff Manila Trading and Supply Company sold a Ford truck chassis to defendants on October 3, 1933. To secure the unpaid balance, defendants executed promissory notes and a chattel mortgage on the same date. After defendants defaulted, the mortgaged property was foreclosed and sold at public auction on February 24, 1934, pursuant to the Chattel Mortgage Law (Act No. 1508). The sale proceeds were insufficient to cover the debt. Plaintiff then filed an action on August 31, 1934, to recover the deficiency. Defendants contended that Act No. 4122, which took effect on December 9, 1933, and prohibits a vendor from recovering any unpaid balance after foreclosure of a chattel mortgage, barred the action.
ISSUE
Whether Act No. 4122, which prohibits a deficiency judgment after foreclosure of a chattel mortgage, applies retroactively to a mortgage executed before its effectivity.
RULING
No. Act No. 4122 does not apply retroactively. The general rule under Article 3 of the Civil Code is that laws have no retroactive effect unless expressly provided. Act No. 4122 contains no such retroactivity provision. The chattel mortgage was executed on October 3, 1933, creating the plaintiff’s rights under the then-existing Act No. 1508, which allowed a deficiency judgment. The subsequent enactment of Act No. 4122 on December 9, 1933, cannot impair that vested right. The action to recover the deficiency, filed after Act No. 4122’s effectivity, is merely the remedy to enforce a pre-existing right. The Court affirmed the lower court’s judgment ordering defendants to pay the deficiency.
AI Generated by Armztrong.