Tumalad v Vicencio G.R. No.

L-30173 September 30, 1971

Facts: To guarantee a loan, defendants executed a chattel mortgage in favor of plaintiffs over their house built on a land which was being rented from Madrigal & Company, Inc. When defendants were not able to pay, the mortgage was extrajudicially foreclosed, and the house was sold at public auction where the plaintiff was the highest bidder. When asked to vacate the house, the defendant contended that the chattel mortgage was null and void because only personal properties can be subject of a chattel mortgage.

Issue: Whether or not the chattel mortgage is valid

Held: Parties to a contract may by agreement treat as personal property that which by nature would be real property. The doctrine of estoppel applies to the defendants, having treated the subject house as personalty. Statements by the owner declaring his house to be a chattel is a conduct that may conceivably estop him from subsequently claiming otherwise.