Navarro v.

Pineda (November 30, 1963)

G.R. No. L-18456|Paredes, J.

F: Rufino Pineda and his mother Juana Gonzales borrowed P2, 500 from Conrado Navarro,
payable after 6 months. To secure the indebtedness, Rufino executed a document captioned
“Deed of Real state and Chattel Mortgages” whereby Juana Gonzales hypothecated a parcel
of land belonging to her, and Rufino Pineda, by way of Chattel Mortgage, mortgaged his 2-
story residential house, havinga floor area of 912 square meters, erected on a lot belonging to
Atty. Vicente Castro, located at Barrio San Roque, Tarlac, and one motor truck. Both
mortgages were contained in 1 instrument. Pineda and Gonzales failed to pay when the debt
became due and payable, and asked for an extension, which was granted. When they failed
to pay again, they asked for another extension, which was also granted. In this 2 nd extension,
Pineda executed a document entitled “Promise”, stating that in the remote event he should
fail to pay, they would no longer seek for an extension and Navarro can proceed to take
whatever action he might desire to enforce his rights. When they failed to pay, Navarro filed
a complaint for the foreclosure of the mortgage. The parties submitted a Stipulation of Facts,
wherein Pineda and Gonzales admit the indebtedness and the authenticity of the Real Estate
and Chattel Mortgages. The trial court ordered Pineda and Gonzales to pay and to deliver to
the sheriff the personal properties. The case was directly appealed to the SC.

I: WON the house can be made the subject of a chattel mortgage.

H: Yes. The trial court did not predicate its decision declaring the deed of chattel mortgage
valid solely on the ground that the house mortgaged was erected on the land w/c belonged
to a 3rd person, but also and principally on the doctrine of estoppel, in that the parties have
expressly so agreed in the mortgage to consider the house as chattel for its smallness and
mixed materials of sawali and wood. It is underniable that the parties to a contract may by
agreement, treat as personal property that which by nature would be real property.