157 Manolo Cerna, petitioner v.

The Honorable Court of Appeals and Conrad Leviste, respondents

G.R. No. 48359 / 30 March 1993

TOPIC: Chattel Mortgage

FACTS: Celerino Delgado and Conrad Leviste entered into a loan agreement involving the amount of
P17,500 on 16 October 1972 which was evidenced by a promissory note. On the same date, Delgado
executed a chattel mortgage over a Willy’s jeep owned by him, and acting as the attorney-in-fact of
Manolo Cerna, he also mortgaged a Taunus’ car owned by Cerna.

When Delgado failed to pay the loan on the period agreed upon, Leviste filed a collection suit before the
lower court against Delgado and Cerna as solidary debtors. Cerna filed a motion to dismiss, claiming,
among others, that there is lack of cause of action against him who is not a debtor under the promissory
note considering that Leviste already opted to collect on the note, and therefore he could no longer
foreclose the mortgage. This was denied by the lower court. A special civil action for certiorari, mandamus
and prohibition with preliminary injunction was filed before the Court of Appeals but the same was
denied. A second motion to dismiss was filed before the lower court which was also denied. Another
petition for certiorari and prohibition was thereafter filed before the Court of Appeals, which the latter
likewise dismissed.

ISSUE:
1. Whether or not Delgado and Cerna were solidary debtors
2. Whether or not the filing of a collection suit is deemed an abandonment of the security of the
mortgage

RATIO/HOLDING:
1. No. Only Delgado signed the promissory note and as such, he was the only one bound by the
contract of loan. There is no legal provision nor jurisprudence in the Philippines which makes a
third person who secures the fulfillment of another’s obligation by mortgaging his own property
to be solidarily bound with the principal obligor. The signatory to the principal contract remains
to be primarily bound and it is only upon the default of the latter that the creditor may have
recourse on the mortgagors.
2. Yes. In People v. Mata, the Court held that “when, however, the mortgagee elects to file a suit for
collection, not foreclosure, thereby abandoning the chattel mortgage as basis for relief, he clearly
manifests his lack of desire and interest to go after the mortgaged property as security for the
promissory note”.

DISPOSITIVE: The petition is DISMISSED. (While the Court agreed with the contentions of Cerna, his
action in this case has been barred by the principle of res judicata. The decisions in the prior cases he
filed already became final.)