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2. ASSOCIATED INSURANCE & SURETY VS.

IYA Later on respondents acquired a bank loan of 30k, wherein Luzon


Surety Company as their surety and the land and buildings as
DOCTRINE: A building is an immovable property irrespective of where or mortgages. Petitioner sued to collect the unpaid materials and was
not said structure and the land on which it is adhered to belong to the same able to get a judgment against the respondents making them jointly
owner. liable to pay the remaining amount.
FACTS ISSUE

Adriano Valino and Lucia A. Valino owned a house of strong WON Iyas mortgage has a superior right against petitioner? YES.
materials. They filed a bond for 11k subscribed by the Associated
Insurance and Surety Co., Inc. and as counter-guaranty therefor, the HELD
spouses Valino executed an alleged chattel mortgage on the
aforementioned house in favor of the surety company. The Supreme Court ruled in favor of Iya.

The parcel of land on which the house is erected was still registered Lopez v Orosa was used as a precedent here saying that the buildings
in the name of the Philippine Realty Corporation but Valino was an immovable itself, separate and distinct from the land. A building
able to obtain the same from them after full payment of the purchase is an immovable property irrespective of where or not said structure
price. and the land on which it is adhered to belong to the same owner.

Valinos acquired another loan, now from Isabel Iya for 12k, Only personal property is subject to a chattel mortgage and since the
executing an REM over the lot and house. However they were not structure in this case is an immovable, it cannot subject to a chattel
able to pay off their loan, so the chattel mortgage was foreclosed. mortgage. Therefore the chattel mortgage and the sale on which it
was based should be declared null and void. Iya was given the
The surety company was awarded the land as the highest bidder in superior right not only to the land but also to the structure to
the auction. The surety company later on discovered that the land foreclose them in an auction.
was subject to a REM. The surety company then requested that the
WHO WON? IYA
house and lot be excluded from the REM.

Iya, in her answer, said that she had a real right over the property
and that the chattel mortgage on which the foreclosure was based
should be declared null and void for non-compliance with the form
required by law.

CA allowed only the foreclosure of the REM only up to the land and
they awarded the structure to the surety company saying that the
house is a personal property and may be subject to chattel mortgage.