9 SCRA 631



Pineda and his mother executed real estate and chattel mortgages in favor of Navarro, to secure a loan they got from the latter.  The REM covered a parcel of land owned by the mother while the chattel mortgage covered a residential  house.    Due  to  the  failure  to  pay  the  loan,  they  asked  for
extensions to pay for the loan.  On the second extension, Pineda executed a PROMISE wherein in case of default in payment, he wouldn’t ask for any additional extension and there would be no need for any formal demand.  In spite of this, they still failed to pay. 

Navarro then filed for the foreclosure of the mortgages.  The court decided in his favor.


Where  a  house  stands  on  a  rented  land  belonging  to  another  person,  it may be the subject matter of a chattel mortgage as personal property if so stipulated in the document of mortgage, and in an action by the mortgagee for the foreclosure, the validity of the chattel mortgage cannot be assailed
by one of the parties to the contract of mortgage.
Furthermore, although in some instances, a house of mixed materials has been considered as a chattel between the parties and that the validity of the  contract  between  them,  has  been  recognized,  it  has  been  a  constant criterion  that  with  respect  to  third  persons,  who  are  not  parties  to  the
contract, and specially in execution proceedings, the house is considered as immovable property.