Associated Insurance and Surety Company vs.

Iya Doctrine: A building is an immovable property irrespective of where or not said structure and the land on which it is adhered to belong to the same owner. Facts: Spouses Adriano Valino and Lucia A. Valino own a house of strong materials. They filed a bond of P !"""."" subscribed by the Associated #nsurance and Surety $o.! #nc. and as a counter%guaranty! the spouses Valino e&ecuted an alleged chattel mortgage on the aforementioned house in fa'or of the surety company. The parcel of land on which the house is erected was still registered in the name of the Philippine (ealty $orporation but was able to obtain the same from them after full payment of the purchase price. The Valinos ac)uired another loan from #sabel #ya for P *!""".""! e&ecuting an real estate mortgage o'er the house and lot. +owe'er! they weren,t able to pay off their other loan which caused the foreclosure of the chattel mortgage. The surety company was awarded the land as the highest bidder in the auction but later on disco'ered that the land was sub-ect to a real estate mortgage. The surety company then re)uested that the house and lot be e&cluded from the real estate mortgage. #ya! in her answer! said that she had a real right o'er the property and that the chattel mortgage on which the foreclosure was based should be declared null and 'oid for non%compliance with the form re)uired by law. The $A ruled that the foreclosure of the real estate mortgage is limited to the land alone and they awarded the structure to the surety company saying that the house is a personal property and may be sub-ect to chattel mortgage. #SS./: 0hich of the mortgages should ha'e preference1 +/LD: Lope2 ' 3rosa was used as a precedent here saying that the buildings an immo'able itself! separate and distinct from the land. A building is an immo'able property irrespecti'e of where or not said structure and the land on which it is adhered to belong to the same owner. 3nly personal property is sub-ect to a chattel mortgage and since the structure in this case is an immo'able! it cannot sub-ect to a chattel mortgage. Therefore the chattel mortgage and the sale on which it was based should be declared null and 'oid. #ya was gi'en the superior right not only to the land but also to the structure to foreclose them in an auction.