COLLEGE OF LAW, NORSUCase Digests on PropertyLaw Johann Heinrich MalongoTumalad vs Vicencio41 SCRA 143Facts:
On 1 September 1955 Vicencio and Simeon,defendants-appellants, executed a chattelmortgage in favor of the Tumalads, plaintiff-appellees over their house of strong materialsover a lot in Quiapo, which were being rentedfrom Madrigal & Company, Inc. The mortgagewas executed to guarantee a loan of P4,800.00received from the Tumalads, payable within oneyear at 12% per annum. The mode of paymentwas P150.00 monthly, It was also agreed thatdefault in the payment of any of theamortizations would cause the remainingunpaid balance to become immediately due andpayable, the Chattel Mortgage enforceable, andthe Sheriff of Manila authorized to sell theMortgagor’s property after necessarypublication. When Vicencio and Simeondefaulted in paying, the mortgage wasextrajudicially foreclosed, and on 27 March1956, the house was sold at public auctionpursuant to the said contract. As highestbidder, the Tumalads were issued thecorresponding certificate of sale.On 18 April 1956, the Tumalads commencedcase in the municipal court of Manila, prayingthat the house be vacated and its possessionsurrendered to them, and for Vicencio andSimeon to pay rent of P200.00 monthly up tothe time the possession is surrendered. Themunicipal court rendered its decision in favor of the Tumalads.Defendant-appellants impugned the legality of the chattel mortgage claiming that they are stillthe owner of the house but waived their rightsto introduce evidence.Nearly a year after the foreclosure sale themortgaged house had been demolished on 14and 15 January 1957 by virtue of a decisionobtained by the lessor of the land on which thehouse stood for non-payment of rentals.
Issues:
1.WON the subject matter of the mortgagewhich is a house of strong material canbe subject of real estate mortgage or achattel mortgage.
2.
Whether or not the defendants arelegally bound to pay rentals to theplaintiffs during the period of 1 yearprovided by law for the redemption of the extrajudicially foreclosed house.
Held:
The inclusion of the building separate anddistinct from the land in the enumeration of what may constitute real property, that thebuilding is by itself an immovable property.However deviations have been allowed forvarious reasons specially if it is stipulated in thesubject of contract. In the case at bar, althoughthere is no specific statement referring to thesubject house as a personal property, yet byceding, selling or transferring a property by wayof chattel mortgage, defendants-appellantscould only have meant to convey the house asa chattel.Hence if a house belonging to a person standson a rented land belonging to another person, itmay be mortgaged as a personal property as sostipulated in the document of mortgage. Itshould be noted that the principle is predicatedon statements by the owner declaring his houseto be chattel. Party in a chattel mortgagecannot question the validity of the chattelmortgage entered into. The doctrine of estoppels therefore applies to the defendant-appellants.Since the defendant-appellants were occupyingthe house at the time the auction of sale, theyare entitled to remain in possession during theperiod of redemption or within one year fromthe date of auction sale and to collect the rentsor profits during the said period.And since the plaintiff-appellees right to posseswas not yet born at the filing of the complaint,there could be no violation or breach thereof. The Supreme Court reversed the decisionappealed from and entered another dismissingthe complaint, with costs against plaintiffs-appellees.
Meralco vs CBAA114 SCRA 273Facts:
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COLLEGE OF LAW, NORSUCase Digests on PropertyLaw Johann Heinrich Malongo
Pursuant to a pipeline concession issued underthe Petroleum Act of 1949, Republic Act No.387, Meralco Securities installed from Batangasto Manila a pipeline system consisting of cylindrical steel pipes joined together andburied not less than one meter below thesurface along the shoulder of the publichighway. The pipes are embedded in the soil while thevalves are welded to the pipes so as to makethe pipeline system one single piece of propertyfrom end to end.Pursuant to the Assessment Law,Commonwealth Act No. 470, the provincialassessor of Laguna treated the pipeline as realproperty and issued Tax Declarations.
Issues:
Whether or not the Meralco Securities PipelineSystem in Laguna is a subject to a realty tax.
Held:
The Court ordered that CBAA did not with graveabuse and discretion and acted within its jurisdiction in sustaining the holding of theprovincial assessor that Meralco SecuritiesPipeline System in Laguna is subject to a realtytax for the following reasons that the pipes aremachinery or improvements and regarded asrealty because they are constructions adheredto the soil. It is attached to the land in such away that it cannot be separated therefromwithout dismantling the steel pipes which arewelded to the pipeline. In so far as the pipelineuses valves, pumps and control devices tomaintain the flow of the oil, it is in a sense amachinery within the meaning of the RealProperty Tax Code. Thus, the Court dismiss the petition and thequestioned decision and resolution of the lowercourt is affirmed.
Meralco vs CBAA114 SCRA 260Facts:
This case is about the imposition of the realtytax on two oil storage tanks installed in 1969 byManila Electric Company on a lot in SanPascual, Batangas which it leased in 1968 fromCaltex (Phil.), Inc. The storage tanks are made of steel plateswelded and assembled on the spot. Theirbottoms rest on a foundation consisting of compacted earth as the outermost layer. Thetank is not attached to its foundation. It is notanchored or welded to the concrete circularwall. Its bottom plate is not attached to any partof the foundation by bolts, screws or similardevices. The tank merely sits on its foundation.Pipelines were installed on the sides of eachtank and are connected to the pipelines of theManila Enterprises Industrial Corporation. The Board concludes that while the tanks restor sit on their foundation, the foundation itself and the walls, dikes and steps, which areintegral parts of the tanks, are affixed to theland while the pipelines are attached to thetanks and required Meralco to pay realty taxeson the two tanks.
Issue:
Whether or not the 2 oil tanks installed byMeralco in Batangas is a subject to a realty tax.
Held:
The SC ruled that while the two storage tanksare not embedded in the land, they may,nevertheless, be considered as improvementson the land, enhancing its utility and renderingit useful to the oil industry. It is undeniable thatthe two tanks have been installed with somedegree of permanence as receptacles for theconsiderable quantities of oil needed byMeralco for its operations. Thus, the two tanks should be held subject torealty tax because they were considered realproperty.Henceforth, the petition is dismissed. TheBoard's questioned decision and resolution areaffirmed.
Board of Assessment vs Meralco10 SCRA 68
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COLLEGE OF LAW, NORSUCase Digests on PropertyLaw Johann Heinrich MalongoFacts:
The Philippine Commission enacted Act No. 484which authorized the Municipal Board of Manilato grant a franchise to construct, maintain andoperate an electric street railway and electriclight, heat and power system in the City of Manila.Meralco's electric power is generated by itshydro-electric plant located at Botocan Falls,Laguna and is transmitted to the City of Manilaby means of electric transmission wires,running from the province of Laguna to the saidCity. These electric transmission wires whichcarry high voltage current, are fastened toinsulators attached on steel towers constructedby respondent at intervals, from its hydro-electric plant in the province of Laguna to theCity of Manila. The respondent Meralco hasconstructed 40 of these steel towers withinQuezon City, on land belonging to it. The City Assessor of Quezon City declared theaforesaid steel towers for real property taxunder Tax.Respondent paid the amount under protest, andfiled a petition for review in the Court of TaxAppeals
Issue:
Whether or not the Meralco poles constitutereal properties so as they can be subjected to areal property tax.
Held:
The SC ruled that Meralco's steel towers wereconsidered poles within the meaning of paragraph 9 of its franchise which exempts itspoles from taxation. The steel towers wereconsidered personalty because they wereremovable and merely attached to squaremetal frames by means of bolts and could bemoved from place to place when unscrewedand dismantled. Furthermore, they are notattached to an immovable in a fixed manner,and they can be separated without breaking thematerial or causing deterioration upon theobject to which they are attached.
Note:
Poles
- was used to denote the steel towers of an electric company engaged in thegeneration of hydro-electric powergenerated from its plant.
Caltex vs CBAA114 SCRA 296Facts:
This case is about the realty tax on machineryand equipment installed by Caltex (Philippines)Inc. in its gas stations located on leased land. The machines and equipment consists of underground tanks, elevated tank, elevatedwater tanks, water tanks, gasoline pumps,computing pumps, water pumps, car washer,car hoists, truck hoists, air compressors andtireflators. The building or shed, the elevated water tank,the car hoist under a separate shed, the aircompressor, the underground gasoline tank,neon lights signboard, concrete fence andpavement and the lot where they are all placedor erected, all of them used in the pursuance of the gasoline service station business formedthe entire gasoline service-station. The lessor of the land, where the gas station islocated, does not become the owner of themachines and equipment installed therein.Caltex retains the ownership thereof during theterm of the lease.
Issue:
Whether or not the pieces of gas stationequipment and machinery enumerated aresubject to realty tax.
Held:
The Assessment Law provides that the realtytax is due "on real property, including land,buildings, machinery, and otherimprovements".SC hold that the said equipment andmachinery, as appurtenances to the gas stationbuilding or shed owned by Caltex (as to which itis subject to realty tax) and which fixtures arenecessary to the operation of the gas station,for without them the gas station would beuseless, and which have been attached or
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