Property Case Reviewer Prof. E.A. Labitag1
semester AY 2010-2011
Janz Hanna Ria N. Serrano
Case Title Quick Facts Held/Ratio/DoctrineDavao Sawmill v. Castillo
August 7, 1935Malcolm, J.
A lessee placed machinery in a building erected on land belonging toanother, with the understanding that the machinery was not included inthe improvements which would pass on the lessor on the expiration of the lease.Lessee also treated the machinery as personal property by executingchattel mortgages in favor of 3
personsThe machinery unit must be classified as a personal property.Machinery which is movable in its nature becomes immobilized whenplaced in a plant
by the owner of the property or plant, but not whenplaced by a tenant, a usufructuary, or any person having only atemporary right, unless such person acted as an agent of the owner.Berkenkotter v. Cu Unjieng e Hijos
July 31, 1935Villa-Real, J.
Mabalacat Sugar Co. obtained from D a loan secured by a 1
2 parcels of land “with all its buildings, improvements, mill, steel
reailway, telephone line, apparatus, utensils and whatever forms part or
is a necessary complement of said […]
or that may in the future exist in said lots.
After some months, MSC bought additional machinery and equipment toincrease its capacity.
Petitioner advanced the amount for the addt’l equipment, with promise
to be reimbursed.The installation of a machinery and equipment in a mortgaged sugarcentral constitutes a permanent improvement, which subjects saidmachinery and equipment to the mortgage constituted thereon.
Lopez v. Orosa, Jr. and Plaza Theatre, Inc.
February 28, 1958 Felix, J.
Orosa proposed to Lopez to invest in a theatre business, which would beerecte
d on O’s land. Lopez refused, but agreed to supply the lumber
necessary for the construction. Payment, as agreed, would be upondemand and not COD. Lopez was paid only a portion of the amount.As Lopez was demanding payment, O obtained a bank loan bymortgaging the theatre to pay for the balance due L. However, thetheater was already mortgaged to PNB
Appellant’s contention that the lien executed in favor of the furnisher of
the materials used for the construction, repair or refection of a buildingis also extended to land on which it was constructed
is without merit,
because while it is true generally that real estate connotes the land andthe building constructed thereon, it is obvious that the inclusion of thebuilding, separate and distinct from the land, in the enumeration of what constitutes real property, could mean only one thing:
that a building isby itself an immovable property Associated Ins. & Surety Co. v. Iya
May 30, 1958 Felix, J.
Sps. Valino owned and possessed a house of strong materials In GracePark Subd, Caloocan, which they purchased on installment from PRC.Wife purchased rice with AISC as surety, and as counter-guaranty,executed a chattel mortgage on their house. At that time, the land was
still in PRC’s name.
After completion of paym
ent of purchase price, TCT in Valino’s name
was secured. Then, to secure an indebtedness, executed a REM over thelot and house in favor of Iya.A building is an immovable property irrespective of whether or not saidstructure and the land on which it is adhered to belong to the sameowner. It cannot be divested of its character of a realty by the fact that the land on which it was constructed belongs to another.As personal properties could only be the subject of a chattel mortgage,the execution of a CM on a building is invalid and a nullity, theregistration of the chattel notwithstanding.
Tumalad v. Vicencio
Vicencio and Simeon executed a chattel mortgage in favor of theTumalads over their house of strong materials located at 550 Int. 3,Quezon Boulevard, Quiapo, Manila, over Lot 6-B and 7-B, Block 2554,which were being rented from Madrigal & Company, Inc.When Vicencio and Simeon defaulted in paying, the mortgage wasextrajudicially foreclosed, and on 27 March 1956, the house was sold at public auction pursuant to the said contract. As highest bidder, theTumalads were issued the corresponding certificate of sale.On 18 April 1956, the Tumalads commenced Civil Case 43073 in themunicipal court of Manila, praying, among other things, that the houseCertain deviations from the rule in Lopez and Iya, however, have beenallowed for various reasons.Hence, if a house belonging to a person stands on a rented landbelonging to another person, it may be mortgaged as a personalproperty as so stipulated in the document of mortgage. It should benoted, however that the principle is predicated on statements by theowner declaring his house to be a chattel, a conduct that mayconceivably estop him from subsequently claiming otherwise.Unlike in the Iya cases, Lopez vs. Orosa, Jr. and Plaza Theatreand LeungYee vs. F. L. Strong Machinery and Williamson, wherein third personsassailed the validity of the chattel mortgage, it is the defendants-appellants themselves, as debtors-mortgagors, who are attacking the