NAVARRO v. PINEDA

With regard to third persons who are not parties to the contract, a house is still considered as an immovable property.

FACTS:

Pineda and his mother secured a loan from Navarro. In line with this, they executed a REM over the land owned by his mother, and a Chattel Mortgage over the residential house. They defaulted on the payment of the loan, but they were able to ask for an extension. However, they still defaulted, which caused Navarro to file for a foreclosure of the mortgages.

ISSUE:

Whether or not the house should be considered as a movable or immovable property?

HELD:

The stipulation of the parties still govern. Thus, with regard to a building erected on a lot belonging to another, this may be the subject matter of a chattel mortgage if the parties so stipulate. However, with regard to third persons who are not parties to the contract, the house is still considered as an immovable property.