MANARANG V. OFILADA, G.R. No. L-8133, May 18, 1956

MANARANG AND MANARANG V. OFILADA AND ESTEBAN

99 SCRA 108

FACTS:

Manarang secured a loan from Esteban guaranteed by a chattel mortgage over  a  house  of  mixed  materials.    Due  to  failure  to  pay,  the  chattel mortgage was foreclosed.  Before the sale of the property, Manarang tried to pay for the property but the sheriff refused to accept tender unless there is payment for the publication of the notice of sale in the newspapers. 

This prompted Manarang to bring this suit to compel the sheriff to accept payment.  He averred that the publication was unnecessary as the house should  be  considered  as  personal  property  per  agreement  in  the  chattel mortgage, and the publication for notice of sale is unnecessary.

ISSUE:

W/N the fact that the parties entering into a contract regarding a house gave said property the consideration of personal property in their contract, binding the sheriff in advertising the property's sale at public auction as personal property.

HELD:

There is no question that a building of mixed materials may be a subject of chattel mortgage, in which case it is considered as between the parties as personal property.

The mere fact that a house was the subject of chattel mortgage and was considered  as  personal  property  by  the  parties  doesn’t  make  the  said house personal property for purposes of the notice to be given for its sale in public auction.  It is real property within the purview of Rule 39, Section 16 of the Rules of Court as it has become a permanent fixture on the land, which is real property.