Recovery Of Unpaid Balance In Foreclosure
Under the law, in a sale on installment of a movable, if the vendor has availed himself of the right to foreclose the chattel mortgage, he shall have no further action against the purchaser to recover the unpaid balance of the purchase price. Any agreement to the contrary is void. In other words, in all proceedings for the foreclosure of the chattel mortgage executed over the chattel which has been sold on installment, the mortgage is limited to the property included in the mortgage. The scheme adopted by the seller of asking for foreclosure and the payment of the unpaid balance is a flagrant circumvention of the prohibition of the law. By praying for the foreclosure of the mortgage over the thing, it renounced whatever claim it may have under the promissory note. (Magna Financial Services Group, Inc. vs. Elias Colorina, G.R. No. 158635, December 9, 2005).