TUMALAD V VICENCIO The theory of nullity of the chattel mortgage was based on
GR NO. L-30173 | SEPTEMBER 30, 1971
Reyes, J.B.L., J.
Shiela Rabaya | Group 6
PLAINTIFFS-APPELLEES: Gavino A. Tumalad and Generosa R.
Tumalad
DEFENDANTS-APPELLANTS: Emiliano Simeon
TOPIC: Classification under the Civil Code: Immovable or Real
Property/Movable or Personal Property
CASE SUMMARY: Emiliano Simeon executed a chattel mortgage in
favor of Tumalad over a house in Manila. It was extrajudicially
foreclosed and it was ruled that the defendants-appellants should pay
rent until they can vacate the subject house. The house was
eventually demolished pursuant to a separate ejection cases and the
deposited rent was ordered to be withheld until the result of the
present appeal. Defendants-appellants main theory is that the chattel
mortgage was void ab initio because the house, being an immovable,
can only be subject to a real estate mortgage and not a chattel
mortgage. The Court ruled, however, that the parties to a contract
may by agreement treat as personal property that which by nature
would be real property. This is based, primarily, upon the principle of
estoppel. The principle is predicated on statements by the owner
declaring his house to be a chattel, a conduct that may conceivable
estop him from subsequently claiming otherwise.
FACTS:
Emiliano Simeon executed a chattel mortgage in favor of
plaintiffs-appellees over their house in Manila. The
mortgage was executed to guarantee a loan of Php 4,800
received from plaintiffs-appellees. It was agreed that
default in the payment of any of the amortizations would
cause the remaining unpaid balance to become
immediately due and payable and that the chattel mortgage
will be enforceable.
The defendant-appellants defaulted in paying so the
mortgage was extrajudicially foreclosed. The house was
sold at the public auction. It was ordered that the house be
vacated and that the defendants-appellants should pay rent
of Php 200 up to the time the possession is surrendered.
Defendants-appellants impugned the legality of the chattel
mortgage, claiming that they are still the owners of the
house.
Defendants-appellants eventually failed to deposit the rent
and a motion for execution was issued by the court.
However, the judgment regarding the surrender of
possession to plaintiffs-appellees could not be executed
because the subject house has already been demolished
pursuant to a separate ejectment case.
Deposited rentals were to be held until final disposition of
the appeal of defendant-appellants. They question the
jurisdiction of the municipal court from which the case
originated, and consequently, the appellate jurisdiction of
the Court of First Instance, on the theory that the chattel
mortgage is void ab initio. It would follow that the
extrajudicial foreclosure, and necessarily the consequent
auction sale, are also void. Thus, the ownership of the
house still remained with defendants-appellants who are
entitled to possession and not plaintiffs-appellees.
two grounds, namely (1) that the signatures on the chattel
mortgage were obtained through fraud, deceit, or trickery,
and (2) that the subject matter of the mortgage is a house
of strong materials, and, being an immovable, it can only
be the subject of a real estate mortgage and not a chattel
mortgage.
ISSUES:
WON the chattel mortgage issued upon the house of strong
materials is null and void ab initio
RULING: NO.
On the charge of fraud, deceit, or trickery, it was found that
the defendants-appellants contentions are not supported by
evidence.
It has been ruled that a building is by itself an immovable
property irrespective of whether or not said structure and
the land on which it is adhered to belong to the same
owner. Certain deviations, however, have been allowed for
various reasons. In a string of cases, the Court has ruled
that the parties to a contract may by agreement treat as
personal property that which by nature would be real
property. This is based, primarily, upon the principle of
estoppel. The principle is predicated on statements by
the owner declaring his house to be a chattel, a
conduct that may conceivable estop him from
subsequently claiming otherwise.
Although there was no specific statement referring to the
subject house as personal property, yet by ceding, selling
or transferring a property by way of chattel mortgage,
defendants-appellants could have only meant to convey the
house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an
inconsistent stand claiming otherwise.
Moreover, the subject house stood on a rented lot to which
defendants-appellants merely had a temporary right as
lessee, and although this can not in itself alone determine
the status of the property, it does so when combined with
other factors to sustain the interpretation that the parties,
particularly the mortgagors, intended to treat the house as
personalty.
DISPOSITIVE: FOR THE FOREGOING REASONS, the decision
appealed from is reversed and another one entered, dismissing the
complaint. With costs against plaintiffs-appellees.
PROVISIONS: N/A