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Issue/s
Whether or not the motor is real or personal property. Personal
Ruling
The motor may be considered as personal property for the purpose of executing a chattel mortgage as long as the
parties to the contract so agree and no innocent third party will be prejudiced. There is absolutely no reason why a
machinery, which is movable in its nature and becomes only immobilized only by destination or purpose, may not
likewise be treated as such. This is because one who has so agreed is estopped from denying the existence of the
chattel mortgage.
The characterization of the subject machinery as chattel by private respondent is indicative of intention and impresses
upon the property the character determined by the parties.
Private respondent contends that estoppel cannot apply against it because it has never represented or agrred tht the
machinery in suit be considered as personal property but was merely required and dictated on by petition to sign a
printed form of chattel mortgage which was in a blank form at the time of signing. The contention lacked
persuasiveness to the court.
The status of the subject matter as movable or immovable property was not raised as an issue before the lower court
and the CA, except in a supplemental memorandum in support of the petition filed in the appellate court.
There is no record showing that the mortgage has been annulled, or that steps were taken to nullify the same. On the
other hand, respondent has benefited from the said contract. Equity dictates that one should not benefit at the expense
of another.
As such, private respondent could no longer be allowed to impugn the efficacy of the chattel mortgage after it has
benefited therefrom.
Doctrine Notes