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TUMALAD V VICENCIO The theory of nullity of the chattel mortgage was based on

GR NO. L-30173 | SEPTEMBER 30, 1971 two grounds, namely (1) that the signatures on the chattel
Reyes, J.B.L., J. mortgage were obtained through fraud, deceit, or trickery,
Shiela Rabaya | Group 6 and (2) that the subject matter of the mortgage is a house
of strong materials, and, being an immovable, it can only
PLAINTIFFS-APPELLEES: Gavino A. Tumalad and Generosa R. be the subject of a real estate mortgage and not a chattel
Tumalad mortgage.
DEFENDANTS-APPELLANTS: Emiliano Simeon
ISSUES:
TOPIC: Classification under the Civil Code: Immovable or Real WON the chattel mortgage issued upon the house of strong
Property/Movable or Personal Property materials is null and void ab initio

CASE SUMMARY: Emiliano Simeon executed a chattel mortgage in RULING: NO.


favor of Tumalad over a house in Manila. It was extrajudicially On the charge of fraud, deceit, or trickery, it was found that
foreclosed and it was ruled that the defendants-appellants should pay the defendants-appellants contentions are not supported by
rent until they can vacate the subject house. The house was evidence.
eventually demolished pursuant to a separate ejection cases and the It has been ruled that a building is by itself an immovable
deposited rent was ordered to be withheld until the result of the property irrespective of whether or not said structure and
present appeal. Defendants-appellants main theory is that the chattel the land on which it is adhered to belong to the same
mortgage was void ab initio because the house, being an immovable, owner. Certain deviations, however, have been allowed for
can only be subject to a real estate mortgage and not a chattel various reasons. In a string of cases, the Court has ruled
mortgage. The Court ruled, however, that the parties to a contract that the parties to a contract may by agreement treat as
may by agreement treat as personal property that which by nature personal property that which by nature would be real
would be real property. This is based, primarily, upon the principle of property. This is based, primarily, upon the principle of
estoppel. The principle is predicated on statements by the owner estoppel. The principle is predicated on statements by
declaring his house to be a chattel, a conduct that may conceivable the owner declaring his house to be a chattel, a
estop him from subsequently claiming otherwise. conduct that may conceivable estop him from
subsequently claiming otherwise.
FACTS: Although there was no specific statement referring to the
Emiliano Simeon executed a chattel mortgage in favor of subject house as personal property, yet by ceding, selling
plaintiffs-appellees over their house in Manila. The or transferring a property by way of chattel mortgage,
mortgage was executed to guarantee a loan of Php 4,800 defendants-appellants could have only meant to convey the
received from plaintiffs-appellees. It was agreed that house as chattel, or at least, intended to treat the same as
default in the payment of any of the amortizations would such, so that they should not now be allowed to make an
cause the remaining unpaid balance to become inconsistent stand claiming otherwise.
immediately due and payable and that the chattel mortgage Moreover, the subject house stood on a rented lot to which
will be enforceable. defendants-appellants merely had a temporary right as
The defendant-appellants defaulted in paying so the lessee, and although this can not in itself alone determine
mortgage was extrajudicially foreclosed. The house was the status of the property, it does so when combined with
sold at the public auction. It was ordered that the house be other factors to sustain the interpretation that the parties,
vacated and that the defendants-appellants should pay rent particularly the mortgagors, intended to treat the house as
of Php 200 up to the time the possession is surrendered. personalty.
Defendants-appellants impugned the legality of the chattel
mortgage, claiming that they are still the owners of the DISPOSITIVE: FOR THE FOREGOING REASONS, the decision
house. appealed from is reversed and another one entered, dismissing the
Defendants-appellants eventually failed to deposit the rent complaint. With costs against plaintiffs-appellees.
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 PROVISIONS: N/A
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.