Manila Trading and Supply Co. vs. Reyes

62 Phil 461 (GR No. L-43263)

October 31, 1935

J. Malcolm

Facts;

On December 13, 1933, following the enactment of Act No. 4122 or the Installment Sales Law, E.M. Reyes executed in favor of the Manila Trading & Supply Co., a chattel mortgage on an automobile as security for the payment of the sum of P400, which Reyes agreed to pay in ten equal monthly installments. As found by the trial judge, Reyes failed to pay some of the installments due on his obligation. Thereupon the Manila Trading & Supply Co., proceeded to foreclose its chattel mortgage. The mortgaged property was sold at public auction by the sheriff of the City of Manila for the sum of P200, After applying this sum, with interest, costs, and liquidated damages to Reyes' indebtedness, the latter owed the company a balance of P275.47, with interest thereon at the rate of 12 percent per annum from February 19, 1934.

When Reyes failed to pay the deficiency on the debt, the company instituted an action in the Court of First Instance of Manila for the recovery thereof. To plaintiff's complaint defendant filed an answer in which he pleaded as a defense that plaintiff, having chosen to foreclose its chattel mortgage, had no further action against defendant for the recovery of the unpaid balance owed by him to plaintiff, as provided by Act No. 4122. After trial the lower court sustained defendant's defense and rendered a judgment absolving him from the complaint, with costs.

From this judgment, the plaintiff has taken an appeal and here contends that the lower court erred in not declaring Act No. 4122 of the Philippine Legislature unconstitutional for the following reasons: (1) in that it embraces more than one subject, (2) in that it unduly restrains the liberty of a person to contract with respect to his property rights, (3) in that it is class legislation, and (4) in that it denies vendors and lessors of personal property the equal protection of the laws.

Issues:

1.) Whether or not Act No. 4122 violates the constitutional provision "that no bill which may be enacted into law shall embraced more than one subject and that subject shall be expressed in the title of the bill.

2.) Whether or not the said law violates the non-impairment clause.

Held:

Act No. 4122 known as the enforcement sales law is valid and enforceable.

The Philippine Legislature having had the purpose in mind in enacting Act No. 4122 to provide legislation concerning sales on the installment plan, this subject was sufficiently expressed by indicating in the title that the law had to do with an amendment of the Civil Code in the portion thereof given to purchase and sale. Legislation should not be embarrassed by overly strict construction. The constitutional provision " that no bill which may be enacted into law shall be expressed in the title of the bill" while designed to remedy an evil was not designed to require great particularity in stating the object of the law in its title.

Parties have no vested rights in particular remedies or modes of procedure, and the Legislature may change existing remedies and modes of procedure without impairing the obligations of contracts, provided an efficacious remedy remains for the enforcement of a mortgage may not, even when public policy is invoked as an excuse, be pressed so far as to cut down the security of a mortgage without moderation or reason or in a spirit of oppression.

In the Philippines three remedies are available to the vendor who has sold personal property on the installment plan. (1) He may elect to exact fulfillment of the obligation (Bachrach Motor Co. vs. Millan [1935], 61 Phil 409). (2) If the vendee shall have failed to pay two or more installments, the vendor may cancel the sale. (3) If the vendee shall have failed to pay two or more installments, the vendor may foreclose the mortgage if one has been given on the property. Act 4122 does no more than qualify the remedy.

The question of the validity of an act is solely one of constitutional power. Questions of expediency of motive or of results are irrelevant. Nevertheless it is not improper to inquire as to the occasion for the enactment of a law.

Most constitutional issues are determined by the Court's approach to them. The proper approach should be to resolve all presumptions in favor of the validity of an act in the absence of a clear conflict between it and the constitution. All doubts should be resolved in its favor.

Public policy, obvious from a statute, when defined and established by legislative authority and when violative of no constitutional principle, should be perpetuated by the Courts.