---Provision in lease that improvements madeshall belong to the lessor upon termination of the lease – air-conditioner installed by lessee.Will AC be turned over to the lessor? Yes.Lessee acted as an agent of the lessor.---(5) RequisitesA.Placed by the owner;B.Intended for an industry or workscarried on in building or land;C.Machines must tend to directly meetthe needs of the industry;D.Machines must be essential andprincipal elements in the industry; notmere incidentals.
Sewing machines placed in own houseintended to be used as a garments factory.Immovable?
Yes. Machines placed by owner;for industry…; tend directly to meet…;essential…If other person’s house, immovableEffect of separation: If temporarily taken away,still immovable.
Sale of real property in the CM Registry cannot bind third persons in good faith.
Leung Yee v. Strong Machinery
Agricola purchased rice-cleaning machineryfrom Strong and executed a
mortgageover the machinery
and the building
in whichit was installed. Agricola defaulted and Strongpurchased the building at auction. Themortgage and sale were registered in the CMregistry.Agricola later sold the land to Strong, the salebeing in an unregistered public document.It turns out that the building was also REM toLeung Yee to secure payment of aconstruction contract. When Agricoladefaulted, Leung Yee purchased the buildingat a sheriff’s sale (this sale took place afterthe building was bought by Strong).Leung Yee brought suit to recover possessionof the building.
Strong has a better right over thebuilding. This is true only because Leung Yeeknew of the chattel mortgage to Strong whenhe purchased the building; he was a buyer inbad faith. The sale of the building cannot bindthird persons in good faith because it was thesale of real property registered not in theRegistry of Real Property but the CM Registry.
A building may be validly mortgaged separately from the land upon which it is built.
Prudential Bank v. Judge Panis
Owners of a building on leased land obtained2 loan from the bank, the loans secured byREMs over the building. The owners defaulted,prompting the foreclosure of the mortgage.The respondent court ruled that the REMswere void, holding that a building may not bemortgaged separately from the land on whichit is built.
REM, executed before title of land was transferred to the mortgagor, isvalid. Article 415 mentions ‘buildings’ separate from land; this means that thebuilding by itself is an immovable and may bethe subject of a REM.The 2
REM, executed after title wastransferred, is void for being violative of thePublic Land Act.
To be considered as real property by destination, the machinery etc. must be (1) essential and principal elements of the industry and (2) the industry must be carried out in a building or piece of land
Mindanao Bus Co. v. City Assessor
The City Assessor sought to impose realty taxon certain MAINTENANCE AND REPAIREQUIPMENT of MBC.MBC opposed, contending that the items werenot real property; the items in question aremovable.
The items are personal property. Theyare not immobilized by destination or purposeas contended by the City Assessor. To beconsidered as real property by destination,they must be (1) essential and principalelements of the industry and (2) the industrymust be carried out in a building or piece of land.In this case, the items are only incidentals tothe transport business and the business iscmtPage 2 of 423/7/2004