ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER RECTO LAW

(a) Specific Performance

(b) Cancellation of Sale: If vendee fails to pay 2 or more installments
i. If seller cancels the sail by repossessing the property sold, he is barred from exacting
payment for its price.
(c) Foreclosure of Chattel Mortgage: If vendee fails to pay 2 or more installments
i. If seller chooses this remedy, he shall have no further action to recover any unpaid
balance, and any stipulation to the contrary shall be void.
ii. What Article 1483 (3) prohibits is further action against the purchaser to recover any
unpaid balance of the price; and although this Court has construed the word action
to mean any judicial or extrajudicial proceeding by virtue of which the vendor may
lawfully be enabled to exact recovery of the supposed unsatisfied balance of the
purchase price from the purchaser or his privy, there is no occasion at this stage to
apply the restrictive provision of the said article because there has yet been a
foreclosure sale resulting in a deficiency. The payment of the sum of P1,250 of Sapinoso
was a voluntary act on his part and did not result from a further action instituted by
Northern Motors. [Motors vs. Sapinoso, 1970]
iii. The purpose of the law is to remedy the abuses committed in foreclosure of chattel
mortgages. It prevents mortgagees from seizing the mortgage property, buying it at
foreclosure sale for a low price and then bringing the suit against the mortgagor for a
deficiency judgment. The almost invariable result to this procedure was that he
mortgagor found himself minus the property and still owing practically the full amount
of his original indebtedness. [Bachrach Motor Co., Inc. v. Millan, 1935]
iv. Remedies are ALTERNATIVE, not cumulative, i.e. exercise of one bars exercise of the
others. [Nonato vs. IAC, 1985]