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VOL. 41, SEPTEMBER 30, 1971 143

Tumalad vs. Vicencio

No. L-30173. September 30, 1971.

GAVINO A. TUMALAD and GENEROSA R. TUMALAD,

plaintiffs-appellees, vs. ALBERTA VICENCIO and
EMILIANO SIMEON, defendants-appellants.

Remedial law; Answer; Nature of answer.—The answer is a

mere statement of the facts which the party filing it expects to
prove, but it is not evidence.
Same; In detainer cases; Claim of ownership is a matter of
defense; Allegations in complaint and the relief sought determine
jurisdiction.—When the question to be determined is one of title,
the Court is given the authority to proceed with the hearing of the
cause until this fact is clearly established. In the case of Sy vs.
Dalman, L-19200, 27 Feb. 1968, wherein the defendant was also a
successful bidder in an auction sale, it was likewise held by this
Court that in detainer cases the claim of ownership “is a matter of
defense and raises an issue of fact which should be determined
from the evidence at the trial.” What determines jurisdiction are
the allegations or averments in the complaint and the relief asked
for.
Civil law; Contracts; Fraud or deceit renders contract void-
able.—Fraud or deceit does not render a contract void ab initio,
and can only be a ground for rendering the contract voidable or
annullable pursuant to Article 1390 of the New Civil Code, by a
proper action in court.

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144 SUPREME COURT REPORTS ANNOTATED

Tumalad vs. Vicencio

Same; Property; Status of buildings as immovable property.—

It is obvious that the inclusion of the building, separate and
distinct from the land, in the enumeration of what may constitute
real properties (art. 415, New Civil Code) could only mean one
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thing—that a building is by itself an immovable property

irrespective of whether or not said structure and the land on
which it is adhered to belong to the same owner.
Same; Same; Same; Deviations from rule.—Certain
deviations, however, have been allowed for various reasons. In the
case of Manarang vs. Ofilada, No. L-8133, 18 May 1956, 99 Phil.
109, this Court stated that ‘‘it is undeniable that the parties to a
contract may by agreement treat as personal property that which
by nature would be real property.’’ Again, in the case of Luna vs.
Encarnacion, No. L-4637, 30 June 1952, 91 Phil. 531, the subject
of the contract designated as Chattel Mortgage was a house of
mixed materials, and this Court held therein that it was a valid
Chattel mortgage because it was so expressly designated and
specifically that the property given as security ‘‘is a house of
mixed materials, which by its very nature is considered personal
property.”
Same; Same; Same; Same; Reason; Owner is estopped.—The
view that parties to a deed of chattel mortgage may agree to
consider a house as personal property for the purposes of said
contract, is good only insofar as the contracting parties are
concerned. It is based, partly, upon the principle of estoppel.
Hence, if a house belonging to a person stands on a rented land
belonging to another person, it may be mortgaged as a personal
property as so stipulated in the document of mortgage. It should
be noted, however, that the principle is predicated on statements by
the owner declaring his house to be a chattel, a conduct that may
conceivably estop him from subsequently claiming otherwise.
Same; Contracts; By ceding, selling or transferring house by
way of chattel mortgage, house is treated as chattel.—In the
contract, the house on rented land is not only expressly
designated as Chattel Mortgage; it specifically provides that “the
mortgagor . . . voluntarily CEDES, SELLS and TRANSFERS by
way of Chattel Mortgage the property together with its leasehold
rights over the lot on which it is constructed and participation. . .”
Although there is no specific statement referring to the subject
house as personal property, yet by ceding, selling or transferring a
property by way of chattel mortgage defendants-appellants could
not have meant to convey the house as chattel, or at least,
intended to treat the same as such, so that they should not now be
allowed to make an inconsistent stand by claiming otherwise.
Moreover, the subject house stood on a rented lot to which
defendants-appel-

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Tumalad vs. Vicencio

lants merely had a temporary right as lessee, and although this

can not in itself alone determine the status of the property, it does
so when combined with other factors to sustain the interpretation
that the parties, particularly the mortgagors, intended to treat
the house as personalty.
Chattel Mortgage Law; Foreclosure of the mortgaged property.
—Chattel mortgages are covered and regulated by the Chattel
Mortgage Law, Act No. 1508. Section 14 of this Act allows the
mortgagee to have the property mortgaged sold at public auction
through a public officer in almost the same manner as that
allowed by Act No. 3135, as amended by Act No. 4118, provided
that the requirements of the law relative to notice and
registration are complied with.
Same; Redemption of foreclosed property.—Section 6 of Act
No. 3135, as amended provides that the debtor-mortgagor may, at
any time within one year from and after the date of the auction
sale, redeem the property sold at the extrajudicial foreclosure
sale.
Same; Petition to obtain possession during period of
redemption; Requirements.—Section 7 of Act 3135, as amended
allows the purchaser of the property to obtain from the court the
possession during the period of redemption; but the same
provision expressly requires the filing of a petition with the
proper Court of First Instance and the furnishing of a bond. It is
only upon filing of the proper motion and the approval of the
corresponding bond that the order for a writ of possession issues
as a matter of course. No discretion is left to the court. In the
absence of such a compliance, the purchaser can not claim
possession during the period of redemption as a matter of right.
In such a case, the governing provision is Section 34, Rule 39, of
the Revised Rules of Court, which also applies to properties
purchased in extrajudicial foreclosure proceedings.
Same; To whom rentals receivable during redemption period
belong.—While it is true that the Rules of Court allow the
purchaser to receive the rentals if the purchased property is
occupied by tenants, he is, nevertheless, accountable to the
judgmentdebtor or mortgagor as the case may be, for the amount
so received and the same will be duly credited against the
redemption price when the said debtor or mortgagor effects the
redemption. Differently stated, the rentals receivable from tenants,
although they may be collected by the purchaser during the
redemption period, do not belong to the latter but still pertain to
the debtor or mortgagor. The rationale for the Rule, it seems, is to
secure for the benefit of the debtor or mortgagor, the payment of

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the redemption amount and the consequent return to him of his

properties sold at public auction.

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146 SUPREME COURT REPORTS ANNOTATED

Tumalad vs. Vicencio

Same; Mortgagor is entitled to remain in possession during

period of redemption and to collect rents.—Since the defendants-
appellants were occupying the house at the time of the auction
sale, they are entitled to remain in possession during the period of
redemption or within one year from and after 27 March 1956, the
date of the auction sale, and to collect the rents or profits during
the said period.
Remedial law; Review by Supreme Court of palpable errors
even when not assigned.—It will be noted further that in the case
at bar the period of redemption had not yet expired when action
was instituted in the court of origin, and that plaintiffs appellees
did not choose to take possession under Section 7, Act No. 3135,
as amended, which is the law selected by the parties to govern the
extrajudicial foreclosure of the chattel mortgage. Neither was
there an allegation to that effect. Since plaintiffs-appellees’ right
to possess was not yet born at the filing of the complaint, there
could be no violation or breach thereof. Wherefore, the original
complaint stated no cause of action and was prematurely filed.
For this reason, the same should be ordered dismissed, even if
there was no assignment of error to that effect. The Supreme
Court is clothed with ample authority to review palpable errors
not assigned as such if it finds that their consideration is
necessary in arriving at a just decision of the case.

APPEAL from a decision of the Court of First Instance of

Manila. Lantin, J.

The facts are stated in the opinion of the Court.

     Castillo & Suck for plaintiffs-appellees.
     Jose Q. Calingo for defendants-appellants.

REYES, J.B.L., J.:

Case certified to this Court by the Court of Appeals (CA-

G.R. No. 27824-R) for the reason that only questions of law
are involved.
This case was originally commenced by defendants-
appellants in the municipal court of Manila in Civil Case
No. 43073, for ejectment. Having lost therein, defendants-
appellants appealed to the court a quo (Civil Case No.
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30993) which also rendered a decision against them, the

dispositive portion of which follows:

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VOL. 41, SEPTEMBER 30, 1971 147

Tumalad vs. Vicencio

“WHEREFORE, the court hereby renders judgment in favor of the

plaintiffs and against the defendants, ordering the latter to pay
jointly and severally the former a monthly rent of P200.00 on the
house, subject-matter of this action, from March 27, 1956, to
January 14, 1967, with interest at the legal rate from April 18,
1956, the filing of the complaint, until fully paid, plus attorney’s
fees in the sum of P300.00 and to pay the costs.”

It appears on the records that on 1 September 1955 1

defendants-appellants executed a chattel mortgage in
favor of plaintiffs-appellees over their house of strong
materials located at No. 550 Int. 3, Quezon Boulevard,
Quiapo, Manila, over Lot Nos. 6-B and 7-B, Block No. 2554,
which were being rented from Madrigal & Company, Inc.
The mortgage was registered in the Registry of Deeds of
Manila on 2 September 1955. The herein mortgage was
executed to guarantee a loan of P4,800.00 received from
plaintiffs-appellees, payable within one year at 12% per
annum. The mode of payment was P150.00 monthly,
starting September, 1955, up to July 1956, and the lump
sum of P3,150 was payable on or before August, 1956. It
was also agreed that default in the payment of any of the
amortizations would cause the remaining unpaid balance
to become immediately due and payable and—

“the Chattel Mortgage will be enforceable in accordance with the

provisions of Special Act No. 3135, and for this purpose, the
Sheriff of the City of Manila or any of his deputies is hereby
empowered and authorized to sell all the Mortgagor’s property
after the necessary publication in order to settle the financial
debts of P4,800.00, plus 12% yearly interest, and attorney’s fees.
2
.....................................”

When defendants-appellants defaulted in paying, the

mortgage was extrajudicially foreclosed, and on 27 March
1956, the house was sold at public auction pursuant to the
said contract. As highest bidder, plaintiffs-appellees
3
were
issued the corresponding certificate of sale. Thereafter, on
18 April 1956, plaintiffs-appellees commenced Civil Case
No. 43073 in the municipal court of Manila, praying,
among other things, that the house be vacated and its
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_______________

1 Exhibit “A,” page 1, Folder of Exhibits.

2 See paragraph “G,” Exhibit “A,” supra.
3 Exhibit “B,” page 4, Polder of Exhibits.

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148 SUPREME COURT REPORTS ANNOTATED

Tumalad vs. Vicencio

possession surrendered to them, and for defendants-

appellants to pay rent of P200.00 monthly from 274 March
1956 up to the time the possession is surrendered. On 21
September 1956, the municipal court rendered its decision
—

“. . . ordering the defendants to vacate the premises described in

the complaint; ordering further to pay monthly the amount of
P200.00 from March 27, 1956, until such (time that) the premises
is (sic) completely vacated; plus attorney’s fees of P100.00 and the
5
costs of the suit.”

Defendants-appellants, in their answers in both the

municipal court and court a quo impugned the legality of
the chattel mortgage, claiming that they are still the
owners of the house; but they waived the right to introduce
evidence, oral or documentary. Instead, they relied on their
memoranda in support of their motion to dismiss,
predicated mainly on the grounds that: (a) the municipal
court did not have jurisdiction to try and decide the case
because (1) the issue involved is ownership, and (2) there
was no allegation of prior possession; and (b) failure to
prove prior demand
6
pursuant to Section 2, Rule 72, of the
Rules of Court.
During the pendency of the appeal to the Court of First
Instance, defendants-appellants failed to deposit the rent
for November, 1956 within the first 10 days of December,
1956 as ordered in the decision of the municipal court. As a
result, the court granted plaintiffs-appellees’ motion

_______________

4 Page 2, Defendants’ Record on appeal, page 97, Rollo.

5 Page 20, Id., page 115, Rollo.
6 Now Section 2, Rule 70, Revised Rules of Court, which reads that—

“SEC. 2. Landlord, to proceed against tenant only after demand.—No landlord, or

his legal representative or assign, shall bring such action against a tenant for

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failure to pay rent due or to comply with the conditions of his lease, unless the
tenant shall have failed to pay such rent or comply with such conditions for a
period of . . . . five (5) days in the case of building, after demand therefor, made
upon him personally, or by serving written notice of such demand upon the person
found on the premises, or by posting such notice on the premises if no persons be
found thereon.”

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VOL. 41, SEPTEMBER 30, 1971 149

Tumalad vs. Vicencio

for execution, and it was actually issued on 24 January

1957. However, the judgment regarding the surrender of
possession to plaintiffs-appellees could not be executed
because the subject house had been already demolished on
14 January 1957 pursuant to the order of the court in a
separate civil case (No. 25816) for ejectment against the
present defendants for non-payment of rentals on the land
on which the house was constructed.
The motion of plaintiffs for dismissal of the appeal,
execution of the supersedeas bond and withdrawal of
deposited rentals was denied for the reason that the
liability therefor was disclaimed and was still being
litigated, and under Section 8, Rule 72, rentals deposited
7
had to be held until final disposition of the appeal.
On 7 October 1957, the appellate court of First Instance
rendered its decision, the dispositive portion of which is
quoted earlier. The said decision was appealed by
defendants to the Court of Appeals which, in turn, certified
the appeal to this Court. Plaintiffs-appellees failed to file a
brief and this appeal was submitted for decision without it.
Defendants-appellants submitted numerous
assignments of error which can be condensed into two
questions, namely:

(a) Whether the municipal court from which the

caseoriginated had jurisdiction to adjudicate the
same;
(b) Whether the defendants are, under the law, legally
bound to pay rentals to the plaintiffs during the
period of one (1) year provided by law for the
redemption of the ex-trajudicially foreclosed house.

We will consider these questions seriatim.

(a) Defendants-appellants mortgagors question the
jurisdiction of the municipal court from which the case

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originated, and consequently, the appellate jurisdiction of

the Court of First Instance a quo, on the theory that

_______________

7 See CFI order of 20 February 1957, pages 21-25, Defendants’ Record

on Appeal.

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150 SUPREME COURT REPORTS ANNOTATED

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the chattel mortgage is void ab initio; whence it would

follow that the extrajudicial foreclosure, and necessarily
the consequent auction sale, are also void. Thus, the
ownership of the house still remained with defendants-
appellants who are entitled to possession and not plaintiffs-
appellees. Therefore, it is argued by defendants-appellants,
the issue of ownership will have to be adjudicated first in
order to determine possession. It is contended further that
ownership being in issue, it is the Court of First Instance
which has jurisdiction and not the municipal court.
Defendants-appellants predicate their theory of nullity
of the chattel mortgage on two grounds, which are: (a) that
their signatures on the chattel mortgage were obtained
through fraud, deceit, or trickery; and (b) that the subject
matter of the mortgage is a house of strong materials, and,
being an immovable, it can only be the subject of a real
estate mortgage and not a chattel mortgage.
On the charge of fraud, deceit or trickery, the Court of
First Instance found defendants-appellants’ contentions as
not supported
8
by evidence and accordingly dismissed the
charge, confirming the earlier finding of the municipal
court that “the defense of ownership as well as the9
allegations of fraud and deceit . . . . . are mere allegations.”
It has
10
been held in Supia and Batiaco vs. Quintero and
Ayala that ‘‘the answer is a mere statement of the facts
which the 11
party filing it expects to prove, but it is not
evidence; and further, that when the question to be
determined is one of title, the Court is given the authority
to proceed with the hearing of the cause until this 12
fact is
clearly established. In the case of Sy vs. Dalman, wherein
the defendant was also a successful bidder in an

_______________

8 Page 31, Defendants’ Record on Appeal, page 213, Rollo.

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9 See Municipal court decision, pages 17-18, Defendants’ Record on
Appeal, pages 199-200, Rollo.
10 59 Phil. 320-321.
11 Italics supplied.
12 L-19200, 27 February 1958, 22 SCRA 834; See also Aquino vs. Deala,
63 Phil. 582 and De los Reyes vs. Elepaño, et al., G.R. No. L-3466, 13
October 1950.

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VOL. 41, SEPTEMBER 30, 1971 151

Tumalad vs. Vicencio

auction sale, it was likewise held by this Court that in

detainer cases the claim of ownership “is a matter of
defense and raises an issue of fact which should be
determined from the evidence at the trial.” What
determines jurisdiction are the allegations
13
or averments in
the complaint and the relief asked for.
Moreover, even granting that the charge is true, fraud or
deceit does not render a contract void ab initio, and can
only be a ground for rendering the contract voidable or
annullable pursuant to Article 14
1390 of the New Civil Code,
by a proper action in court. There is nothing on record to
show that the mortgage has been annulled. Neither is it
disclosed that steps were taken to nullify the same. Hence,
defendants-appellants’ claim of ownership on the basis of a
voidable contract which has not been voided fails.
It is claimed in the alternative by defendants-appellants
that even if there was no fraud, deceit or trickery, the
chattel mortgage was still null and void ab initio because
only personal properties can be subject of a chattel
mortgage. The rule about the status of buildings as
immovable property15is stated in Lopez vs. Orosa, Jr. and
Plaza Theatre, Inc., 16cited in Associated Insurance Surety
Co., Inc. vs. Iya, et al. to the effect that—

“. . . . . it is obvious that the inclusion of the building, separate

and distinct from the land, in the enumeration of what may
constitute real properties (art. 415, New Civil Code) could only
mean one thing—that a building is by itself an immovable
property irrespective of whether or not said structure and the land
on which it is adhered to belong to the same owner.”

Certain deviations, however, have been allowed for various

reasons.17 In the case of Manarang and Manarang vs.
Ofilada, this Court stated that “it is undeniable that the
parties to a contract may by agreement treat as personal

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_______________

13 See Canaynay vs. Sarmiento, L-1246, 27 August 1947, 79 Phil. 36.

14 Last paragraph, Article 1290, N.C.C., supra.
15 No. L-10817-18, 28 February 1958, 103 Phil. 98.
16 No. L-10827-38, 30 May 1958, 103 Phil. 972.
17 No. L-8133, 18 May 1956, 99 Phil. 109.

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152 SUPREME COURT REPORTS ANNOTATED

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property that which by nature would be real property”, 18

citing Standard Oil Company of New York vs. Jaramillo.
In the latter case, the mortgagor conveyed and transferred
to the mortgagee by way of 19
mortgage “the following
described personal property.” The “personal property”
consisted of leasehold rights and
20
a building. Again, in the
case of Luna vs. Encarnacion, the subject of the contract
designated as Chattel Mortgage was a house of mixed
materials, and this Court held therein that it was a valid
Chattel mortgage because it was so expressly designated
and specifically that the property given as security “is a
house of mixed materials, which by its very nature is
considered 21personal property.” In the later case of Navarro
vs. Pineda, this Court stated that—

“The view that parties to a deed of chattel mortgage may agree to

consider a house as personal property for the purposes of said
contract, ‘is good only insofar as the contracting parties are
concerned. It is based, partly, upon the principle of estoppel’
(Evangelista vs. Alto Surety, No. L-11139, 23 April 1958). In a
case, a mortgaged house built on a rented land was held to be a
personal property, not only because the deed of mortgage
considered it as such, but also because it did not form part of the
land (Evangelista vs. Abad, [CA]; 36 O.G. 2913), for it is now
settled that an object placed on land by one who had only a
temporary right to the same, such as the lessee or usufructuary,
does not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co., Inc. vs.
Castillo, et al., 61 Phil. 709). Hence, if a house belonging to a
person stands on a rented land belonging to another person, it
may be mortgaged as a personal property as so stipulated in the
document of mortgage. (Evangelista vs. Abad, supra.) It should be
noted, however that the principle is predicated on statements by
the owner declaring his house to be a chattel, a conduct that may

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conceivably estop him from subsequently claiming otherwise.”

22
(Ladera vs. C.N. Hodges, [CA] 48 O.G. 5374).

_______________

18 No. L-20329, 16 March 1923, 44 Phil. 632.

19 Italics supplied.
20 No. L-4637, 30 June 1952, 91 Phil. 531.
21 No. L-18456, 30 November 1963, 9 SCRA 631.
22 Italics supplied.

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VOL. 41, SEPTEMBER 30, 1971 153

Tumalad vs. Vicencio

In the contract now before Us, the house on rented land is

not only expressly designated as Chattel Mortgage; it
specifically provides that “the mortgagor . . . . . voluntarily
CEDES, 23SELLS and TRANSFERS by way of Chattel
Mortgage the property together with its leasehold rights
over24
the lot on which it is constructed and participation . . .
. .” Although there is no specific statement referring to the
subject house as personal property, yet by ceding, selling or
transferring a property by way of chattel mortgage
defendants-appellants could only have meant to convey the
house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an
inconsistent stand by claiming otherwise. Moreover, the
subject house stood on a rented lot to which defendants-
appellants merely had a temporary right as lessee, and
although this can not in itself alone determine the status of
the property, it does so when combined with other factors
to sustain the interpretation that the parties, particularly
the mortgagors, intended to treat the house as personalty.
Finally, unlike in the 25
Iya cases, Lopez vs. Orosa, Jr. and
Plaza Theatre, Inc. and Leung 26
Yee vs. F. L. Strong
Machinery and Williamson, wherein third 27
persons
assailed the validity of the chattel mortgage, it is the
defendants-appellants themselves, as debtors-mortgagors,
who are attacking the validity of the chattel mortgage in
this case. The doctrine of estoppel therefore applies to the
herein defendants-appellants, having treated the subject
house as personalty.
(b) Turning now to the question of possession and
rentals of the premises in question. The Court of First
Instance noted in its decision that nearly a year after the
foreclosure sale the mortgaged house had been demolished
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on 14 and 15 January 1957 by virtue of a decision obtained

by the lessor of the land on which the house stood. For

_______________

23 Italics supplied.
24 See paragraph 2 of Exhibit “A,” page 1, Folder of Exhibits.
25 Supra.
26 Supra.
27 See Navarro vs. Pineda, supra.

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154 SUPREME COURT REPORTS ANNOTATED

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this reason, the said court limited itself to sentencing the

erstwhile mortgagors to pay plaintiffs a monthly rent of
P200.00 from 27 March 1956 (when the chattel mortgage
was foreclosed and the house sold) until 14 January 1957
(when it was torn down by the Sheriff), plus P300.00
attorney’s fees.
Appellants mortgagors question this award, claiming
that they were entitled to remain in possession without any
obligation to pay rent during the one year redemption
period after the foreclosure sale, i.e., until 27 March 1957.
On this issue, We must rule for the appellants. Chattel
mortgages are covered and regulated by 28 the
Chattel Mortgage Law, Act No. 1508. Section 14 of this
Act allows the mortgagee to have the property mortgaged
sold at public auction through a public officer in almost the
same manner as that allowed by Act No. 3135, as amended
by Act No. 4118, provided that the requirements of the29law
relative to notice and registration are complied with. In
the instant case, the parties specifically stipulated that
“the chattel mortgage will be enforceable in accordance
30
with the provisions of Special Act No. 3135 . . . . .” (Italics
supplied). 31
Section 6 of the Act referred to provides that the
debtormortgagor (defendants-appellants herein) may, at
any time within one year from and after the date of the
auction sale, redeem the property sold at the extra judicial
fore-

_______________

28 Effective 1 August 1906.

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29 See Luna vs. Encarnacion, et al., No. L-4637, 30 June 1952, 91 Phil.
531.
30 See paragraph “G,” Exhibit “A,” supra.
31 Section 6, Act No. 3135, as amended, provides:

“In all cases in which an extrajudicial sale is made under the special power
hereinbefore referred to, the debtor, his successor in interest or any judicial
creditor or judgment creditor of said debtor, or any person having a lien on the
property subsequent to the mortgage or deed of trust under which the property is
sold, may redeem the same at my time within the term of one year from and after
the date of the sale; and such redemption shall be governed by the provisions of
sections four hun-

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32
closure sale. Section 7 of the same Act allows the
purchaser of the property to obtain from the court the
possession during the period of redemption: but the same
provision expressly requires the filing of a petition with the
proper Court of First Instance and the furnishing of a bond.
It is only upon filing of the proper motion and the approval
of the corresponding bond that the order for a writ of
possession issues
33
as a matter of course. No discretion is left
to the court. In the absence of such a compliance, as in the
instant case, the purchaser can not claim possession during
the period of redemption as a matter of right. In such a
case, the governing provision
34
is Section 34, Rule 39, of the
Revised Rules of Court which also applies to properties
purchased in extrajudicial fore-

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dred and sixty-four to four hundred and sixty-six, inclusive, of the Code of
Civil Procedure, in so far as these are not inconsistent with the provisions
of this Act.” (Italics supplied)
32 Section 7, Act No. 3135, as amended, states:

“In any sale made under the provisions of this Act, the purchaser may petition the
Court of First Instance of the province or place where the property or any part
thereof is situated, to give him possession thereof during the redemption period,
furnishing bond in an amount equivalent to the use of the property for a period of
twelve months, to indemnify the debtor in case it be shown that the sale was made
without violating the mortgage or without complying with the requirements of this
Act. . . . . . . .” (Italics supplied)

33 See De Gracia vs. San Jose, et al., No. L-6493, 25 March 1954.

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34 “SEC. 34. Rents and profits pending redemption. Statement thereof
and credit therefor on redemption.—The purchaser, from the time of the
sale until a redemption, and a redemptioner, from the time of his
redemption until another redemption, is entitled to receive the rents of the
property sold or the value of the use and occupation thereof when such
property is in possession of a tenant. But when any such rents and profits
have been received by the judgment creditor or purchaser, or by a
redemptioner, or by the assignee or either of them, from property thus
sold preceding such redemption, the amounts of such rents and profits
shall be a credit upon the redemption money to be paid; . . . . . . . . . .”

156

156 SUPREME COURT REPORTS ANNOTATED

Tumalad vs. Vicencio
35
closure proceedings. Construing the said section, this
Court stated in the aforestated case of Reyes vs. Hamada,

“In other words, before the expiration of the 1-year period within
which the judgment-debtor or mortgagor may redeem the
property, the purchaser thereof is not entitled, as a matter of
right, to possession of the same. Thus, while it is true that the
Rules of Court allow the purchaser to receive the rentals if the
purchased property is occupied by tenants, he is, nevertheless,
accountable to the judgment-debtor or mortgagor as the case may
be, for the amount so received and the same will be duly credited
against the redemption price when the said debtor or mortgagor
effects the redemption. Differently stated, the rentals receivable
from tenants, although they may be collected by the purchaser
during the redemption period, do not belong to the latter but still
pertain to the debtor of mortgagor. The rationale for the Rule, it
seems, is to secure for the benefit of the debtor or mortgagor, the
payment of the redemption amount and the consequent return to
him of his properties sold at public auction.” (Italics supplied)

The Hamada36
case reiterates the previous ruling in Chan
vs. Espe.
Since the defendants-appellants were occupying the
house at the time of the auction sale, they are entitled to
remain in possession during the period of redemption or
within one year from and after 27 March 1956, the date of
the auction sale, and to collect the rents or profits during
the said period.
It will be noted further that in the case at bar the period
of redemption had not yet expired when action was
instituted in the court of origin, and that plaintiffs-
appellees did not choose to take possession under Section 7,

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Act No. 3135, as amended, which is the law selected by the

parties to govern the extrajudicial foreclosure of the chattel
mortgage. Neither was there an allegation to that effect.
Since plaintiffs-appellees’ right to possess was not yet born
at the filing of the complaint, there could be no violation or
breach thereof. Wherefore, the original complaint

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35 See Reyes vs. Hamada, No. L-19967, 31 May 1965, 14 SCRA 215;
Italics supplied.
36 No. L-16777, 20 April 1961, 1 SCRA 1004.

157

VOL. 41, SEPTEMBER 30, 1971 157

Tumalad vs. Vicencio

stated no cause of action and was prematurely filed. For

this reason, the same should be ordered dismissed, even if
there was no assignment of error to that effect. The
Supreme Court is clothed with ample authority to review
palpable errors not assigned as such if it finds that their
consideration
37
is necessary in arriving at a just decision of
the case.
It follows that the court below erred in requiring the
mortgagors to pay rents for the year following the
foreclosure sale, as well as attorney’s fees.
FOR THE FOREGOING REASONS, the decision
appealed from is reversed and another one entered,
dismissing the complaint. With costs against plaintiffs-
appellees.

          Concepcion, C.J., Dizon, Makalintal, Zaldivar,

Castro, Fernando, Teehankee, Barredo, Villamor and
Makasiar, JJ., concur.

Decision reversed.

Notes.—(a) Classification of property; Building on rented

land.—A house built on rented land has been held by the
Court of Appeals to be personal property which may
properly be the subject of a chattel mortgage (Evangelista
vs. Abad [C.A.] 36 O.G. 2913). Some American decisions
enunciate the same view, particularly with reference to
buildings or constructions placed on the rented land by the
lessee, where the lease agreement gives the lessee the right
to remove the buildings and improvements at the end of
the lease (See, e.g., Stanfa vs. Bynum, 37 Fed. Supp. 962).
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It has been opined, however, that “buildings placed on

leased lands acquire the status of immovables by nature for

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37 Saura Import & Export Co. vs. Philippine International Surety Co.,
et al., No. L-15184, 31 May 1963, 8 SCRA 143, 148; Hernandez vs. Andal,
78 Phil. 198, See also Sec. 7, Rule 51, of the Revised Rules of Court. Cf.
Santaella vs. Otto Lange Co., 155 Fed. 719; Mast vs. Superior Drill Co.,
154 Fed., 45, Francisco, Rules of Court (1965 Ed), Vol. 3, page 765.

158

158 SUPREME COURT REPORTS ANNOTATED

Beltran vs. Garcia

all purposes, though placed thereon by one other than the

owner (II Tolentino, Commentaries and Jurisprudence on
the Civil Code of the Philippines 15).
(b) Estoppel.—The doctrine of estoppel, it must be
remembered, does not apply to questions of law. Whether a
certain property is personal or real is a question of law,
which is for the courts and not for the parties to determine.
The parties cannot, and should not, be allowed to change
the qualification to such property. Otherwise, they shall be
at liberty to change and violate the conditions or legal
consequences attendant to the classification given to such
property by law, such as the form or manner in which it
should be dealt with. It is, therefore, submitted that the
Supreme Court is in error when, as it does in the Tumalad
case, subject of this note, it held that the defendants were
in estoppel to claim that the building in question was a
realty.

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