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, a holder of a lumber concession, has operated sawmill in a land which it does not own. The company erected a building therein which housed the machinery used by it. In the lease contract between the sawmill company and the owner of the land, it has been agreed that after the lease period or in case the company should leave or abandon the land leased before the said period, ownership of all the improvements and buildings except machineries and accessories, made by the company shall pass to the owner of the land without any obligation on its part to pay any amount for said improvements and buildings. In another action, A writ of execution was issued against the company and the properties in question were levied upon. The company assailed the said writ contending that the machineries and accessories were personal in nature, hence, not subject to writ of execution. The trial judge ruled in favour of the company. Issue: Whether or not the subject properties are personal in nature. Held: The subject properties are personal in nature. Article 334, paragraph 5, of the [Old] Civil Code provides that real property consists of (5) Machinery, liquid containers, instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry. Machinery which is movable in nature only becomes immovable when placed in a land by the owner of the property or land but not when so placed by a tenant or any person having only a temporary right, unless such person acted as the agent of the owner. In the case at bar, the machinery is intended not by the owner of the land but by the saw mill company for use in connection with its trade. In this sense, the machinery is not a real property.
Berkenkotter v. Cu Unjieng, 61 Phil 663 Facts: The Mabalacat Sugar Co., Inc., owner of the sugar central loaned from Cu Unjieng e Hijos, secured by a mortgage of two parcels of land "with all its buildings, improvements, sugar-cane mill and whatever forms part or is necessary complement of said sugar-cane mill.” Subsequently, Mabalacat Sugar Co., Inc. decided to increase the capacity of its sugar central by buying additional machinery and equipment. Consequently, A. Green, president of said corporation, proposed to the plaintiff, B.H. Berkenkotter, to advance the necessary amount for the purchase of said machinery and equipment. A. Green applied to Cu Unjieng e Hijos for an additional loan as security for the additional machinery and equipment acquired together with whatever additional equipment acquired with said loan and installed in the sugar central after the execution of the original mortgage deed. B.A. Green failed to obtain said loan, thus the mortgage is in effect, which includes the additional machinery and equipment as improvement. Issues: Whether or not the additional machinery and equipment as improvement can be permanently attached to a mortgage of the sugar central. Held: Article 334, paragraph 5, of the [Old] Civil Code provides that real property consists of (5) Machinery, liquid containers, instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry. The installation of a machinery and equipment in a mortgaged sugar central, in lieu of another of less capacity, for the purpose of carrying out the industrial functions of the latter and increasing production, constitutes a permanent improvement on said sugar central and subjects said machinery and equipment to the mortgage constituted thereon.
Lopez v. Orosa [G.R. Nos. L-10817-18. February 28, 1958.] En Banc, Felix (J): 10 concur. Facts: Enrique Lopez is doing business as Lopez-Castelo Sawmill. Vicente Orosa, Jr. invited him to invest in the theatre business of the latter (Plaza Theatre, Inc.). Lopez is unwillingness to invest in the business, however, he agreed to supply the lumber necessary for the construction of the proposed theatre at Orosa's guarantee that the latter would be personally liable for any account that the said construction might incur. Lopez then delivered the lumber for the theatre. Lopez was partially paid. Orosa and Belarmino Rustia, corporation president, promised Lopez to obtain a bank loan to satisfy the balance. Lopez found out later that the corporation already got a loan from the PNB with the Luzon Surety Company as surety, and the corporation in turn executed a mortgage on the land and building in favor of said company as counter-security. The mortgage was registered under the Torrens System. Subsequently, when the corporation applied for the registration of the land under Act 496, such mortgage was not revealed. Due to the demands of Lopez, Orosa issued a deed of assignment over his shares of stock in the corporation. As there was still an unpaid balance, Lopez instituted an action against Orosa and Plaza Theatre, asking them to be held solidarily liable. The lower Court held that Orosa and the Plaza Theatre, Inc., were jointly liable for the unpaid balance of the cost of lumber used in the construction of the building and the plaintiff thus acquired the materialman's lien over the same; the lien being merely confined to the building and did not extend to the land on which the construction was made. Plaintiff tried to secure a modification of the decision in so far as the lien did not extend to the land, but same was denied by order of the court. Issue: Whether or not the materialmen’s lien for the value of the materials used in the construction of the building attaches to sai d structure alone and doesn’t extend to the land in which the building is adhered to. Held: While it is true that generally, real estate connotes the land and the building constructed thereon, it is obvious that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties could mean only one thing — that a building is by itself an immovable property. In the absence of any specific provision of law to the contrary, a building is an immovable property, irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner. A close examination of Article 1923 (5) of the Civil Code reveals that the law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refection or work was made. This being so, the inevitable conclusion must be that the lien so created attaches merely to the
It should be noted that the principle is predicated on statements by the owner declaring his house to be chattel. The trial court heard the two cases jointly and it held that the surety company had a preferred right over the building as since when the chattel mortgage was secured. The mortgage was executed to guarantee a loan received from the Tumalads. No. 1958. When Vicencio and Simeon defaulted in paying. asserting that she has a better right over the property. It later learned of the real estate mortgage over the house and lot secured by the spouses. After having completed the payment to the land and to secure payment of an indebtedness. In the case at bar. Also. L-10837-38. The . which is movable in its nature and becomes immobilized only by destination or purpose. May 16.R. Wearever Textiles [G. Held: The building is not a chattel but a real property. L-58469. The municipal court rule in favor of the Tumalads. the Court of Appeals however. set aside the Orders of the lower court and ordered the return of the drive motor seized by the sheriff after ruling that the machinery in suit cannot be the subject of replevin. for to cloak the building with an uncertain status made dependent on the ownership of the land. Iya filed another civil action against the spouses. Party in a chattel mortgage cannot question the validity of the chattel mortgage entered into. the company foreclosed the chattel mortgage. However deviations have been allowed such as when it is stipulated in the subject of contract. hence not subject to chattel mortgage. and executed an alleged chattel mortgage on the said house in favor of the surety company. the lien for the unpaid value of the lumber used in the construction of the building attaches only to said structure and to no other property of the obligors. The spouses were not able to satisfy obligation with NARIC. it may be mortgaged as a personal property as so stipulated in the document of mortgage. the possibility is not remote that it would result in confusion. discounted and assigned several receivables under a Receivable Purchase Agreement. the land wasn’t owned yet by the spouses making the building then a chattel and not a real property. Tumalad vs Vicencio. 1983. This prompted the company to file an action against the spouses. Makati Leasing v. Issue: Whether or not the drive motor machinery is a real property. Hence if a house belonging to a person stands on a rented land belonging to another person. If a house of strong materials may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby.] Second Division. Vicencio. thus the application for replevin of Makati Leasing. the parcel of land on which the house is erected was still registered in the name of the Philippine Realty Corporation. may not be likewise treated as such. Wearever Textile Mills. Associated Insurance & Surety v. Held: There is no logical justification to exclude the rule out the present case from the application of the pronouncement in Tumalad v. as personal properties could only be the subject of a chattel mortgage (Section 1. de Castro (J): 5 concur. the execution of the chattel mortgage covering a building is clearly invalid and a nullity. For her to purchase on credit rice from the NARIC. Inc. the mortgage was extrajudicially foreclosed. Held: The inclusion of the building separate and distinct from the land in the enumeration of what may constitute real property.immovable property for the construction or repair of which the obligation was incurred. because it is a real property pursuant to Article 415 of the new Civil Code. In the instant case. Upon Wearever's default. that the building is by itself an immovable property. much less of a chattel mortgage. The Sheriff was unable to seize the machinery. To hold it the other way. To secure the collection of the receivables assigned. Lucia Valino filed a bond subscribed by the Associated Insurance & Surety Co. Valino were the owners of a house payable on installment basis from the Philippine Realty Corporation.] En Banc. Nos. Issues: WON the subject matter of the mortgage which is a house of strong material can be subject of real estate mortgage or a chattel mortgage. Act 3952). Iya [G. The corresponding certificate of sale was then issued. there is absolutely no reason why a machinery. 1 concur in result Facts: To obtain financial accommodations from Makati Leasing and Finance Corporation.R. In the case at bar. selling or transferring a property by way of chattel mortgage. the mortgage was extrajudicially foreclosed and the house was sold at public auction with the Tumalads as highest bidder. petitioner was compelled to pay. Issue: Whether or not the building is a chattel and not a real property. The spouses weren’t able to pay the surety company despite demands and thus. A building certainly cannot be divested of its character of a realty by the fact that the land on which it is constructed belongs to another. the Valinos executed a real estate mortgage over the lot and the house in favor of Isabel Iya. defendants-appellants could only have meant to convey the house as a chattel. May 30. although there is no specific statement referring to the subject house as a personal property. The lower court issued an order lifting the restraining order for the enforcement of the writ of seizure and an order to break open the premises of Wearever to enforce said writ. Vicencio assailed the legality of the chattel mortgage claiming that they are still the owner of the house. At the time of the undertaking. Wearever Textile executed a Chattel Mortgage over certain raw materials inventory as well as a machinery. The Tumalads filed an ejectment against Vicencio praying that the latter vacate the house. Felix (J): 9 concur Facts: Spouses Adriano and Lucia A. yet by ceding. 41 SCRA 143 Facts: Vicencio and Simeon executed a chattel mortgage in favor of the Tumalads over their house which were being rented from Madrigal & Company. There was an agreement that default in the payment would cause the Chattel Mortgage enforceable. would create a situation where a permanent fixture changes its nature or character as the ownership of the land changes hands.
114 SCRA 296 Facts: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. The tank merely sits on its foundation. The Board concludes that while the tanks rest or sit on their foundation. the underground gasoline tank. Caltex v. The machines and equipment consists of underground tanks. which are integral parts of the tanks. As stated in Standard Oil v. Held: The SC ruled that while the two storage tanks are not embedded in the land. and which have been attached or affixed permanently to the gas station site or embedded therein. Thus. are fastened to insulators attached on steel towers constructed by respondent at intervals. neon lights signboard. all of them used in the pursuance of the gasoline service station business formed the entire gasoline service-station. Note: Poles . concrete fence and pavement and the lot where they are all placed or erected. enhancing its utility and rendering it useful to the oil industry. car hoists. The Board's questioned decision and resolution are affirmed. they are not attached to an immovable in a fixed manner. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. 484 which authorized the Municipal Board of Manila to grant a franchise to construct. the petition is dismissed. These electric transmission wires which carry high voltage current. Batangas which it leased in 1968 from Caltex (Phil. from its hydro. Note: . in its gas stations located on leased land. The building or shed. The lessor of the land. Held: The Assessment Law provides that the realty tax is due "on real property. Board of Assessment Appeals. Its bottom plate is not attached to any part of the foundation by bolts. Board of Assessment Appeals. where the gas station is located. the two tanks should be held subject to realty tax because they were considered real property.characterization of the subject machinery as chattel is indicative of intention and impresses upon the property the character determined by the parties. maintain and operate an electric street railway and electric light. Inc. 114 SCRA 260 Facts: This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric Company on a lot in San Pascual.electric plant in the province of Laguna to the City of Manila. Furthermore. heat and power system in the City of Manila. water tanks.was used to denote the steel towers of an electric company engaged in the generation of hydro-electric power generated from its plant Meralco Securities v. running from the province of Laguna to the said City. SC hold that the said equipment and machinery. including land. Issue: Whether or not the 2 oil tanks installed by Meralco in Batangas is a subject to a realty tax. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. Pipelines were installed on the sides of each tank and are connected to the pipelines of the Manila Enterprises Industrial Corporation. car washer. The tank is not attached to its foundation. does not become the owner of the machines and equipment installed therein. be considered as improvements on the land. Jaramillo. the elevated water tank. machinery. elevated water tanks. it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. 10 scra 63 Facts: The Philippine Commission enacted Act No. The storage tanks are made of steel plates welded and assembled on the spot. truck hoists. The City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax. Henceforth. Their bottoms rest on a foundation consisting of compacted earth as the outermost layer. Held: The SC ruled that Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which exempts its poles from taxation. water pumps. and other improvements". The respondent Meralco has constructed 40 of these steel towers within Quezon City. screws or similar devices. air compressors and tireflators. nevertheless. they may. Issue: Whether or not the pieces of gas station equipment and machinery enumerated are subject to realty tax. gasoline pumps. dikes and steps. on land belonging to it. . and filed a petition for review in the Court of Tax Appeals. for without them the gas station would be useless. Respondent paid the amount under protest. as long as no interest of third parties would be prejudiced thereby. Board of Assessment v. buildings. Caltex retains the ownership thereof during the term of the lease. Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls. as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station. the air compressor. Laguna and is transmitted to the City of Manila by means of electric transmission wires. the car hoist under a separate shed.). the foundation itself and the walls. elevated tank. and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. The steel towers were considered personalty because they were removable and merely attached to square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled. Meralco. Issue: Whether or not the Meralco poles constitute real properties so as they can be subjected to a real property tax. computing pumps. It is not anchored or welded to the concrete circular wall. are affixed to the land while the pipelines are attached to the tanks and required Meralco to pay realty taxes on the two tanks.
which enumerates as real property as "Trees. which corresponds to paragraph 2 of article 334 of the Civil Code.. Paragraph 2. levied an attachment on Leon Sibal’s 8 parcels of land for the sum of P4. vs. Johnson (J): 5 concur Facts: On 11 May 1923. Sibal paid P2. and that Valdez refused to accept the money and return the sugar cane to the plaintiff. But the evident meaning of these articles is. 2.) Thus. (Citizens' Bank vs. Douglass. held that the lessee was entitled to gather the Products corresponding to the agricultural year because said fruits did not go with the land but belonged separately to the lessee. where the crops belong to the owner of the plantation. On the same date. Valdez. the deputy sheriff sold at public auction said personal properties to Emiliano J. as well as the installations and appurtenant service facilities.. with taxes and interests. pending fruits and ungathered products may be sold and transferred as personal property. Ann.f. unless the contract expressly provides otherwise.579. the mortgage of a piece of land does not include the fruits and products existing thereon. (Decision of March 18. under certain conditions. Wiltz *31 La. He also attached Sibal’s real property in Tarlac. August 4.550. Also. c. Machinery — shall embrace machines. and inure to the benefit of the person making the seizure. Wiltz. without specifying which said amount was to be applied. vol. are likewise immovable. which consists of 11 parcels of land and a house and camarin situated in one of said parcels. has received in recent years an interpretation by the Tribunal Supremo de España. Inc. they form part of the immovable.º). Leon Sibal). beauty or utility or to adapt it for new or further purposes. including rig hts. as such. in a case of ejectment of a lessee of an agricultural land. Louisiana jurisprudence: Growing crop’s mobilization by anticipation Standing crops and the fruits of trees not gathered and trees before they are cut down are considered as part of the land to which they are attached. plants.93. Louisiana jurisprudence: Standing crops as immovable or movable based on owned and leased premises. a gathering as it were in advance. by virtue of a writ of execution in civil case 20203 of the CFI Manila (Macondray & Co.000 to Macondray for the account of the redemption price of said parcels of land. which holds that.200. including the camarin and the house were bought by Valdez at the auction held by the sheriff for the sum of P12. and that within 1 year from the date of the attachment and sale the plaintiff ordered to redeem said sugar cane and tendered to Valdez the amount sufficient to cover the price paid by the latter. On 14 December 1924. amounting to more than mere repairs or replacement of waste. Valdez [G. the Supreme Court of Spain. Macondray sold and conveyed to Valdez for P2. as cited in Lumber Co.97 including interest. Porche vs. Within 1 year from the sale of said parcels of land. The plaintiff alleged that the deputy sheriff of Tarlac Province attached and sold to Valdez the sugar cane planted by the plaintiff and his tenants on 7 parcels of land.. Klotz. 418]. interest and participation therein.' but the immovability provided for is only one in abstracto and without reference to rights on or to the crop acquired by others than the owners of the property to which the crop is attached. however. 761. Lewis vs. and the fruits of an immovable gathered or produced while it is under seizure are considered as making part thereof. or on 30 July 1923. Paragraph 2. Sibal v. After hearing and on 28 April 1926.. The 3 remaining parcels were released from attachment by virtue of claims presented by Cayugan and Tizon. Hence. Sandel vs. among which was included the sugar cane in question in the 7 parcels of land described in the complaint. attached the personal property of Sibal located in Tarlac. Citizen’s Bank v. and ungathered products. 3. admits that growing crops are sometimes considered and treated as personal property. Ann. Jurisprudence recognizes the possible mobilization of the growing crop. the appeal.. who paid therefor the sum of P1. 629.. Civil Jurisprudence of Spain.] Second Division.R. 8 of the 11 parcels. among others. On 29 April 1924. the deputy sheriff of the Province of Tarlac. 267. of which P600 was for the sugar cane. It includes the physical facilities available for production. Sheriff and Tax Collector [106 La. and trees before they are cut down. instruments. 97. Macondray & Co. in discussing section 334 of the Civil Code. Manresa admits growing crops as personal property Manresa.Improvements — is a valuable addition made to property or an amelioration in its condition. growing crops may be considered as personal property. the judge (Lukban) rendered judgment in favor of the defendant holding that the sugar cane in question was personal property and. the deputy-sheriff of the Province of Tarlac. Article 344 of the Civil Code corresponds to Article 465 of the Civil Code of Louisiana Article 465 of the Civil Code of Louisiana. Ann. Valdez vs. Article 334 of the Civil Code interpreted by the Tribunal Supremo de Espana as that growing crops may be considered as personal property Sugar cane may come under the classification of real property as "ungathered products" in paragraph 2 of article 334 of the Civil Code. Bodin. The redemption price of the parcels was reduced to P2.. seizure by creditors Standing crops are considered as immovable and as part of the land to which they are attached. costing labor or capital and intended to enhance its value. mechanical contrivances.97 all of its rights and interest in the 8 parcels of land acquired by it in connection with civil case 20203 of the CFI Manila..579. vs.. On 9-10 May 1924. as amended. 26278. by virtue of a writ of execution in civil case 1301 of the Province of Pampanga (Emiliano J. under the Spanish Mortgage Law of 1909." That article. No. bought said parcels of land. or on 24 September 1923. appliances and apparatus attached to the real estate. in view of the recent decisions of the Supreme Court of Spain. 244. 2 mo nths later. 27 La. action was commenced in the CFI of the Province of Tarlac. 39 La.. at the auction held by the sheriff of the Province of Tarlac. under Spanish authorities.273. 1904. Ann. together with all other equipment designed for or essential to its manufacturing. 31 La. The existence of a right on the growing crop is a mobilization by anticipation. And further. the eminent commentator of the Spanish Civil Code. provides: "Standing crops and the fruits of trees not gathered. while they are annexed to the land or form an integral part of any immovable property. Leon Sibal 1. industrial or agricultural purposes. 1927. and are considered as part of the land to which they are attached. Ann. 244]) 5. rendering the crop movable quoad the right acquired therein. Inc. 1. On 25 June 1924. 28 La. ." 4. was not subject to redemption.
They must be also owned at the time by the vendor. and the title will vest in the buyer the moment the thing comes into existence. . which though not yet actually in existence. Further. the Chattel Mortgage Law. care for and protect the crop while growing. for the purposes of attachment and execution. the phrase "personal property" should be understood to include "ungathered products. the fruits gathered or produced inure to the benefit of the seizing creditor. The court ruled that electricity.20 pesos. 761]) 6. like those of gas.) The thing sold. 190 and by Act No. 165]. Issue: Whether or not the court erred in declaring that the electrical energy may be stolen. and reads as "All goods. If a lessee obtain supplies to make his crop. is a valuable article of merchandise. that growing crops raised by yearly labor and cultivation are considered personal property. the sugar cane in question was personal property and was not subject to redemption." The above provisions of Act 1508 were enacted on the assumption that "growing crops" are personal property. 1508 in the sense that "ungathered products" as mentioned in said article of the Civil Code have the nature of personal property. the factor's lien would not attach to the crop as a separate thing belonging to his debtor. in planting the palay in the disputed parcels of land and harve sted therefrom 190 cavans. Louisiana jurisprudence: Law cannot be interpreted result in absurd consequences If crop necessarily forms part of the leased premises the result would be that it could not be sold under execution separate and apart from the land. Section 2 of said Act provides that "All personal property shall be subject to mortgage. The law cannot be construed so as to result in such absurd consequences. 7. may be levied on as personal property. US v. The true test of what is a proper subject of larceny seems to be not whether the subject is corporeal." The Supreme Court of California.. Valid sale of a thing not yet in existence. Growing crops are personal property Section 450 and most of the other sections of the Code of Civil Procedure relating to the execution of judgments were taken from the Code of Civil Procedure of California. whether it be gathered or not. and a mortgage executed in pursuance thereof shall be termed a chattel mortgage. whether growing or standing in the field ready to be harvested. 48 Conn. when produced by annual cultivation. Thus he was charged with the crime of theft amounting to 2. "ungathered products" have the nature of personal property. American jurisprudence: growing crops by yearly labor and cultivation personal property The settled doctrine followed in the State of California and other states in connection with the attachment of property and execution of judgment is." Section 7 in part provides that "If growing crops be mortgaged the mortgage may contain an agreement stipulating that the mortgagor binds himself properly to tend. Bodin [28 La. 8. In other words. 10. to which the Code of Civil Procedure was pattered. The court has been inclined to to give more weight to the evidence adduced by him than to the evidence adduced by the plaintiff. the presumption raised was that Carlos was the owner of the device whose only use was to deflect the current from the meter. It belongs to the lessee. therefore.. without variation. Chattel Mortgage Law recognizes growing crops as personal property Act 1508. 13. European Railway Co.. Lack of evidence of bad faith in planting palay in questioned parcels entitles plaintiff to ½ of the crop There being no evidence of bad faith on the plaintiff’s part. Cutting vs. 387. 250 [40 Am. It is equally well settled that they may be seized and sold under execution. 12. St. or that in the sense that. Article 334 of the Civil Code modified by Act 190 and 1508 Paragraph 2 of article 334 of the Civil Code has been modified by section 450 of Act No. 67 Me. 21 Phil 543 Facts: Ignacio Carlos has been a consumer of electricity furnished by the Manila Electric Railroad and Light Company for a building containing the residence of the accused and 3 other residences. Held: It is true that electricity is no longer. that growing crops were personal property and subject to execution. and other property. and it may be sold by his judgment creditors. Paragraph 2. may be seen and felt. 63. under section 688 of the Code of Civil Procedure of that state.) 9. A crop raised on leased premises in no sense forms part of the immovable. shall be liable to execution. Absence from trial and failure to cross-examine lend weight to the evidence presented by the other party The absence of the plaintiff from the trial and his failure to cross-examine the defendant have lent considerable weight to the evidence then presented for the defense. and for the purposes of the Chattel Mortgage Law. (Emerson vs. Rep. Section 450 of the Code of Civil Procedure enumerates the property of a judgment debtor which may be subjected to execution. Personal property includes ungathered products. (Porche vs. but whether it is capable of appropriation by another than the owner. moneys. Rep. has held. as formerly. but the land belonging to the lessor would be affected with the recorded privilege." In the case at bar.and where it is seized. and then belonging to the vendor. no part of the realty. Carlos. but its manifestation and effects. (Hull vs. Crops. the same as gas. 21 Am. and may be sold by him. liable to voluntary transfer as chattels. and essentially owe their annual existence to cultivation by man. Packers Exchange. are. thing must be owned by the vendor A valid sale may be made of a thing. he is therefore entitled to one-half of the crop. An. not 190 cavans as ordered by the lower court. is reasonably certain to come into existence as the natural increment or usual incident of something already in existence. Representatives of the company believing that more light is consumed than what is shown in the meter installed an additional meter on the pole outside Carlos’ house to compare the actual consumption and found out that the latter used a jumper.273KW of electric power worth 909. agreeably to the provisions of this Act.. chattels. must be specific and identified. All annual crops which are raised by yearly manurance and labor. however. or 95 cavans. fully recognizes that growing crops are personal property. a jumper was found in a drawer of a small cabinet in the room of the defendant’s house were the meter was installed. 11. regarded by electricians as a fluid. Source of provisions on execution of judgment in Code of Civil Procedure (Act 190). with respect to the ownership of parcels of land.. In the absence of any explanation for Carlos’ possession of said device. both real and personal.. Hull. They are.
6889 in the Supreme Court. The widow. became the owner. had been a member and managing director. and to apply all amounts so collected to the satisfaction. 8437. the parents being natives of Spain but domiciled in Manila. already in liquidation. Zoilo.. On 31 December 1906. Further. were born in the Philippines on 27 March 1884. in which the bank was not a party. acquired by Aldecoa & Co.31. pro tanto. . On 18 February 1907. The CFI dismissed the complaint as to Joaquin upon the ground that he had ratified those mortgages after becoming of age.07 to Cecilia Ibañez de Aldecoa. Zoilo.177.117. the father who died on 4 October 1895. upon the ground that the emancipation by their mother was void and of no effect. and in September of that year procured a judgment of the CFI annulling the articles of copartnership of Aldecoa & Co.40) and Liborio Tremoya (P75. Thus. On 31 Mach 1907. On 22 December 1906. the 312 shares of the Pasay Estate Company. and by resolution dated 24 January 1907. Aldecoa & Co. These two mortgages. left the Philippines and went to Spain in 1897 due to her health. On 30 November 1907. 4 July 1885. Aldecoa & Co. who were 18 years old at that time. No. and did not return until the latter part of 1902. on 23 March 1906. in addition to certain securities of Aldecoa & Co. Macleod. Later it was agreed that Isabel Palet and her sons should mortgage. in so far as they were concerned.463. On 23 February 1906. The real property mortgaged by Isabel Palet was at her instance.000 upon the terms and conditions set forth in the instrument Exhibit A. with their consent and acceptance. and another P89.19). and for a judgment that these shares be sold and applied to the satisfaction of their judgment obtained on 30 September 1908. On 30 September 1908. Aldecoa & Co. Isabel Palet went before a notary public and executed two instruments. March 23. Judgment was rendered by the lower court in favor of the children. of which Zoilo Ibañez de Aldecoa. In October 1908. by decree of the land court 8 March 1907. and decreeing that they were creditors and not partners of that firm. It is also susceptible of being severed from a mass or larger quantity.127. Joaquin and Zoilo instituted an action against the bank for the purpose of obtaining a judgment annulling the mortgages created by them upon their interest in the properties described in Exhibits A and B. wherein the injunction bond of P50. Aldecoa & Co. and on 30 August 1907. On 31 July 1903. registered under the provisions of the Land Registration. the application of which was granted by decree of the land court 8 September 1907. 1 concurs in result. was duly elected by the parties as liquidator. Exhibits A and B.280. The firm of Aldecoa & Co. Limited.. the mortgage. Joaquin. Both parties appealed from this decision and the case was given registry No. they were minors incapable of creating a valid mortgage upon their real property. and Cecilia (all Ibañez de Aldecoa). as the result of the litigation between Aldecoa & Co. Joaquin.. mortgaged to the bank the shares of the Pasay Estate Company recovered from Alejandro S. as partners by being present and voting at meetings of the partners of the company upon matters connected with its affairs. but upon appeal the Supreme Court reversed that judgment and declared that the mortgage of the shares of stock in the Pasay Estate Co. and Aldecoa & Co. and Cecilia instituted an action in the CFI Manila against the bank for the purpose of obtaining a judicial declaration to the effect that the contract whereby Aldecoa & Co..R. on 6 November 1906 and at the instance of Isabel Palet and her 3 children. Hongkong & Shanghai Banking v. further mortgaged the right of mortgage upon real property in the same province mortgage to it by Tremoya Hermanos (P43. [G. on 30 January 1907. certain of their real properties as additional security for the obligations of Aldecoa & Co. and that. and of being transported from place to place. whereby she emancipated her sons. Facts: The defendants. to the bank. duly authorized the bank to collect from certain persons and firms any and all debts owing by them to Aldecoa & Co.bought and sold like other personal property and is capable of appropriation by another. In 1908.] En Banc. both Joaquin and Zoilo participated in the management of Aldecoa & Co. but entered a judgment annulling said mortgages with respect to Zoilo. acknowledged an indebtedness of P154. Aldecoa & Co. and Cecilia recovered a judgment in the CFI Manila for the payment of the balance of P155. Isabel Palet. obtained from the bank a credit in account current up to the sum of P450. respectively. retaining her Manila domicile. 1 dissents. On the other hand. 1915. therefore. On the same date. by way of additional security for the performance of the obligations set forth in Exhibits A and B. was applied for registration (the undivided ¾ of said property being subject to the mortgage in favor of the bank). Zoilo. The 3 children appear in the articles of agreement as industrial partners. Macleod. Aldecoa & Co. Urquhart. So no error was committed by the trial court in holding that electricity is a subject of larceny. was null and void. and Cecilia commenced an action against their mother.000 was made by the bank upon the condition that any liability incurred on the part of the bank upon this injunction bond would be covered by the mortgage of 23 February 1906.689. Trent (J): 3 concur. was executed wherein certain corrections in the description of some of the real property mortgaged to the bank by Exhibit A were made and the amount for which each of the mortgaged properties should be liable was set forth. S. he was granted the authority expressed in that resolution. Additional security for the performance of the obligation in favor of the bank under the terms of contracts Exhibit A and B were made on various dates. and the intervener. was reorganized in December 1896. and the widow became one of the general or "capitalistic" partners of the firm. Zoilo. to the bank was valid. Joaquin. Urquhart. the legitimate children of Zoilo Ibañez de Aldecoa and Isabel Palet. while another property. Exhibit B. After the execution of said instruments. Aldecoa & Co. Aldecoa & co. and 1887. as liquidator mortgaged to the bank. Joaquin. went into liquidation on account of the expiration of the term for which it had been organized. through a compromise agreement executed on 14 August 1907.20 each to Joaquin and Zoilo Ibañez de Aldecoa. of any indebtedness of Aldecoa & Co. Aldecoa & Co. were duly recorded in the registry of property of the city of Manila on 23 March 1906. of the shares of the Pasay Estate Company Limited. mortgaged to the bank the right of mortgage upon real property in the Province of Albay mortgage to it by one Zubeldia. and A. the property subject to the mortgage in favor of the bank.54). mortgaged to the bank the right of mortgage upon real estate in the province of Ambos Camarines mortgage to it by one Andres Garchitorena (P20.
Judgment was also entered denying the relief sought by the intervener. upon motion. and this necessarily implies that there were no credits in favor of the defendant firm of any kind whatsoever which had not already been deducted from the original obligation. 6.. does not constitute an extension of the term of the obligation. Solidary obligation. 7.'s customers ceased doing business with that firm after it went into liquidation. in case his obligation is not paid at maturity.On 31 January 1911. and to enforce the subsidiary liability of the other defendants for the payment of this indebtedness. may include all of the solidary debtors in the same suit and secure a joint and several judgment against them. at any period of a trial. the creditor. and one or more of such debtors mortgage any of their real property situate in the jurisdiction of the court. It is true that certain additional deeds of mortgage and pledge were executed by Aldecoa & Co. or in the success of either of the parties. 5. or an interest against both. judicially or extrajudicially. if he has legal interest in the matter in litigation. If two or more persons are in solidum the debtors of a third person. for its customers to cease their commercial relations with Aldecoa & Co. Complaint not vague nor ambiguous The complaint alleges that a certain specific amount was due from the defendant firm as a balance of its indebtedness to the plaintiff. 4. and not a mere surety for the performance of the obligations of Aldecoa & Co. The mere failure to bring an action upon a credit. has resulted in extinguishment of the mortgages created by Aldecoa & Co. as soon as the same or any part of it matures. The real reason which caused the defendant's provincial customers to cease making shipments was due to the fact that the defendant. citing Section 121 of the Code of Civil Procedure which provides that "A person may. The record shows that all the sureties were represented by Urquhart. Before that property can be sold the original mortgagors will have to be made parties. ordering the defendants to pay the sum of P344. the bank was expressly empowered to take any steps which might be necessary. Intervener is not a preferred creditor over the bank The intervener is seeking to have himself declared a preferred creditor over the bank. 8. by virtue of which the creditor deprives himself of his right to immediately bring an action for the enforcement of his claim. The bank is not trying to foreclose any mortgages on real property executed by Aldecoa & Co.'s debtors. as well as judgments of foreclosure upon the respective mortgages. and the costs. when he agreed with the bank upon the extensions granted to those debtors. nor does the judgment of the trial court directs that this be done. judgment was entered in favor of the bank. The properties mortgaged by Doña Isabel Palet were so mortgaged not merely as security for the performance of her own solidary subsidiary obligation as a partner bound for all the debts of Aldecoa & Co. Money judgment against the firm and foreclosure judgment against the others It is true that the bank sought and obtained a money judgment against that firm. the Bank filed an action against the defendants for the purpose of recovering from Aldecoa & Co. being out of funds. It is therefore clear that the bank. It may be possible that some of Aldecoa & Co.. was insolvent. be permitted by the court to intervene in an action or proceeding.. for the whole indebtedness of the latter firm to the bank. On 10 August 1912. Court has jurisdiction as bank does not seek to exercise mortgage right on real properties in the provinces The bank is not seeking to exercise its mortgage rights upon the mortgages which the defendant firm holds upon certain real properties in the Provinces of Albay and Ambos Camarines and to sell these properties at public auction in these proceedings. as partners of the Company. is untenable. having exercised the authority conferred upon it by the company in a legal manner.. Properties Isabel Palet mortgage were not security for performance of her solidary subsidiary obligation but part of the direct obligation of the firm itself Although the court recognized the subsidiary character of the personal liability of Doña Isabel Palet as a member of the firm of Aldecoa & Co. 2. and ordering the foreclosure of the mortgages. No evidence supports claim that bank prejudiced Aldecoa by inducing the customers to cease commercial relations There is no evidence to show that there was any inducement made by the bank to prejudice Aldecoa & Co. without any solidary liability. for the collection of these credits. All of the defendants and the intervener have appealed.924. This is the ordinary effect of a commercial firm going into liquidation. and he was given authority by all the sureties to authorize the bank to proceed in this manner. 1. and to foreclose certain mortgages executed by the defendants to secure the indebtedness sued upon. is not responsible for any damages which might have resulted from the failure of the defendant's provincial customers to continue doing business with that firm. In the present case. had failed to meet its obligation to pay the first installment due under the agreement of 23 February 1906.23 with interest of 7% per annum from date of judgment until fully paid. and ordered the appellants whose appeals are determined to pay their respective portions of the cost. in favor of the bank as additional security after Aldecoa & Co. shall have been exhausted. Furthermore. the person elected by them as liquidator of the firm. or of the mortgages created by partners of that company to secure its liabilities to the bank. but for the purpose of securing the direct obligation of the firm itself to the bank. and decreed that as to any deficiency which might result after the sale of the mortgaged properties. but there is no stipulation whatever in any of these documents or deeds which can in any way be interpreted in the sense of constituting an extension which would bind the bank to wait for the expiration of any new term before suing upon its claim against Aldecoa & Co. and at the same time and in the same action obtained a foreclosure judgment against the other defendants. in accordance with the provisions of article 1851 of the Civil Code produces the extinction of the liability of the surety must of necessity be based on some new agreement between the creditor and principal debtor. The authority to grant these extensions was conferred upon the bank by the liquidator. The Supreme Court affirmed the judgment appealed from. This is especially true for the reason that it was a well known fact that Aldecoa & Co. execution should not issue against the properties of Doña Isabel Palet until all the property of Aldecoa & Co." The amount . and not a mere surety The extension of the term which. Doña Isabel Palet is a personal debtor jointly and severally with Aldecoa & Co. Isabel Palet a personal debtor in solidum with Aldecoa & Co. Extensions does not extinguish the mortgages The contention that the extensions granted to Aldecoa & Co. 3. with the consent and authority of that firm itself. could not give its customers any further credit. an amount due from the latter as the balance to its debit in an account current with the Company.
18700. which were assigned to the bank on 30 January 1907. Ltd. 20 L. 148 Ala. In said ruling the court said “that the expense of maintenance of property is bound to affect such persons as have an interest therein. 72 P. 21. Urquhart was elected liquidator by the members of the firm of Aldecoa & Co. Gaston (148 Ala.. No." This test has been approved. however. is not evidenced by a public document. The former suit is one to annul the mortgages. 679.(P21. out of which the intervener seeks to have his indebtedness satisfied. This objection was sustained and the proffered evidence excluded. 552. was offered in evidence. 10. 552). There must be the same parties. Further. 1 Cyc. Receiver appointed by the court preferred in payment of fees over creditors. the case and the one pending in the Supreme Court are identical. entitled to preference over that of Ildefonso Ramirez and another mortgage by Concepcion Ayala. 451. Romualdez (J): 7 concur Facts: Half-interest in the business (Antigua Botica Ramirez) was mortgaged with Fidelity & Surety Co. since such other debts are recoverable to the extent that the property is preserved and maintained. were creditors and partners of Aldecoa & Co.. sec. Intervener not preferred over creditors over the firm’s personal property. the “cre dits for the construction.. it could be pleaded in bar as a former adjudication of the same matter between the same parties (Watson vs. The judgment is binding only upon the parties to the suit and their successors in interest (sec. (28 Mont. or for the amount of the sale of personal property which may be in the possession of the debtor to the extent of the value of the same” are preferred. In the present case. is 16 shares of the stock of the Banco EspañolFilipino.. 214. stated in 1 Cyc. The present suit is one for the foreclosure of the mortgages. No. 113 N. 13. must be paid in preference to the cla ims of creditors. The Supreme Court affirmed the judgment appealed from with costs against the appellant. Ramirez [G. Plea of another action pending is not sustained if its pendency is set up to defeat another The principle upon which a plea of another action pending is sustained is that the latter action is deemed unnecessary and vexatious (Williams vs. As the intervener has been paid for his services up to January 1910.. on 10 March 1919. The only property of Aldecoa & Co. 666). and certain claims against debtors of Aldecoa & Co. 330 shares of the stock of the Pasay Estate Co. there must be the same rights asserted. Anderson (136 Iowa. Wetzstein vs. which the liquidator had anything to do with after 1910 was the real estate mortgages mortgaged to the bank as additional security. It is applicable. 865). clear that the intervener is not entitled to the relief sought. had a judgment been rendered therein on the merits.] First Division. mentioned in Exhibit G. 2). 28. mortgage over real property not personal prope rty Article 1922 of the Civil Code provides that.. or at least such as represent the same interest.. in Williams vs. appointed by the court to preserve property in litigation. Involuntary insolvency of Paul Strochecker v. Whatever may be due him for his services as liquidator is due under a contract of employment between himself and the members of the firm of Aldecoa & Co. only when the judgment to be rendered in the action first instituted will be such that. Van Vleck vs. while the amount due the bank appears in a public instrument and is also secured by pledges and mortgages on the property of Aldecoa & Co.000) sought by the intervener as salary represents his salary as liquidator of the firm and not to salary prior to liquidation. 11. 12.. therefore. 1. he cannot be declared a preferred creditor of the bank.. ed. 1 RCL. and it is only of personal property that article 1922 speaks of. and registered in due time in the registry of property. preservation. such a judgment would be conclusive between the parties and could be pleaded in bar of the second action. 214. The only personal property of Aldecoa & Co. and the same relief prayed for. is that "a plea of the pendency of a prior action is not available unless the prior action is of such a character that. whether they be the owners or creditors of the property. 9.. Raised in the lower court. the case must be the same. 715." In the present case. This relief must be founded on the same facts. such an adjudication will deny the right of the bank to foreclose the mortgages. the amount (P14. W. therefore payment for this object has preference over any other debt.. 853). It may be conceded that if the final judgment in the former action is that the mortgages be annulled. It is. without the consent or approval of the bank or of any other creditor. The identity in these particulars should be such that if the pending case had already been disposed of.. but Ramirez did. Mining Co. Test of identity The test of identity. nor secured by pledge or mortgage. it will amount to res adjudicata against the second action. citing the quotation. 450 shares of the stock of the Compañia Maritima (both items preceding were pledged before the liquidation). Gaston. Judgment declaring the children as creditors and not partners of Aldecoa not binding to the bank It appears that a certified copy of the judgment entered in the former case. with regard to specified the personal property of the debtor. It was an action in personam and the bank was not a party. repair.. while another mortgage was made with Ildefonso Ramirez on 22 September 1919 and registered also in the registry. the trial court declared the mortgage of Fidelity & Surety Co.000) to which the intervener is a creditor of Aldecoa & Co. wherein it was declared that the children. or any document for that matter. Intervener was appointed by members of the Company without approval from the creditor-bank The ruling of the supreme court of Spain in 16 March 1897 was correct to the effect that the fees of a receiver. Jones. 42 Sou.) but when the pendency of such a suit is set up to defeat another. 42 Sou. Interest in business may be subject of mortgage . These mortgages on real property cannot be regarded as personal property.R. 13 Wall. (which were in the possession of Aldecoa & co or its liquidator for only 1 day). Ayala did not appeal. 306. between the same parties. Such evidence was objected to by the bank on the ground that is was res inter alios acta and not competent evidence against the bank or binding upon it in any way because it was not a party to that action. 1. thus the inquiry must therefore proceed to the other requisites demanded by the rule. 1922. September 26. regardless of which party is successful. Code of Civil Procedure. and the title or essential basis of the relief sought must be the same. 366.. He did not receive his employment by reason of any judicial act.
US v. District of Intramuros. Article 1922 (1-3) of the Civil Code applicable only to mortgage property in possession Numbers 1.With regard to the nature of the property mortgaged which is one-half interest in the business. 170. It is a valuable article of merchandise.R. Manila Philippine Islands" is sufficient. The law (sec. 175. US v. 4. Upon arrival. while the average minimum is about P8 per month. January 18. and in some respects resembling electricity. and the conclusion is inevitable that the accused is at least liable to the extent of the minimum charge of P2 per month. Genato. the gas company sued Manuel Tambunting at the CFI Manila. before the court showing that the general average of the monthly bills paid by consumers throughout the city for the use of gas in a kitchen equipped like that used by the accused is from P18 to P20.. but the decisions of Spanish. “his half interest in the drug business known as Antigua Botica Ramirez. 303) 4. to identify the same. 15 Phil. legally in possession of the surety company (Sec. Street (J): 4 concur Facts: On January 1918. 17. which last mentioned apparatus was installed below. Later. which is the minimum charge for gas made by the gas company. and since the registration of the mortgage has been. gas. had placed a gas installation in the house at 443. while Manuel Tambunting was not home. and found that gas was being used. that electrical energy could also be the subject of theft (see US v. nor himself. is confirmed by the rule laid down in the decisions of the supreme court of Spain of January 20. 123 and 125. Before the institution of the case in the CFI. bought and sold like other personal property. Manila.. however. under a complaint charging that the accused. Landmark case as to issue whether taking of gas constitute larceny The taking of gas may constitute larceny has never before been the subject of adjudication in the Supreme Court. Calle Evangelista. consisting of the necessary piping and a gas meter. We think that the facts above stated are competent evidence. it being understood that the amount of the indemnity which the accused shall pay to the gas company is P4. Carlos. and sentencing him to undergo imprisonment for 2 months and 1 day (arresto mayor) with the accessories prescribed by law. not being a registered installer of gas equipment. 7. Carlos.) 2. 21 Phil. No. the gas company disconnected the gas pipe and removed the meter. which is. p. Description of mortgage property sufficient The description contained in the document is sufficient. Calle Evangelista. which later found the accused guilty of stealing a quantity of gas belonging to the Manila Gas Corporation. 1887. 1921. with subsidiary imprisonment for one day in case of insolvency. Vol. (See US vs. Act 1508. When the occupants at whose request this installation had been made vacated the premises. articles identical with above articles 517 and 518. fluid used for lighting The right of the ownership of electric current is secured by articles 517 and 518 of the Penal Code. thus cutting off the supply of gas from said premises. These expressions were used in a case which involved the substraction and appropriation of electrical energy and the court held. In the case at bar. for cooking in the quarters occupied by the Tambuntings. The Supreme Court affirmed the judgment with modification. Act 1508) requires only a description of the mortgaged property shall be such as to enable the parties to the mortgage. All personal property may be mortgaged. 7. 553. one of the inspectors of the gas company visited the house in question. 21 Phil. Right of ownership of electric current. to indemnify the said corporation in the sum of P2. and much less upon the property in question. 560. the application of these articles in cases of substraction of gas. Stipulation about personal property not a mortgage upon property In no way can the mortgage executed be given effect as of the date of the sale of the store in question. Gas has character of personal property.. Upon 2 June 1919. with subsidiary imprisonment in case of insolvency. as there was a mere stipulation about personal security during said date. Manuel Tambunting and his wife became occupants of the upper floor of the house situated at 443. after reasonable inquiry and investigation. with costs against the appellant. a fluid used for lighting. is in possession of the property mortgaged. in accordance with the analogy of the case involving the theft of gas. the accused had been unsuccessfully prosecuted for an infraction of section 504 of the Revised Ordinances of the city of Manila. no person desiring to use gas at all for domestic purposes can purchase the commodity at a lower rate per month than P2. without the knowledge and consent of the gas company. but not a mortgage upon property. 1508. There was evidence. and may be subject of larceny There is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. susceptible of being severed from a mass or larger quantity and of being transported from place to place. 16513. Tambunting admitted that he was using gas without knowledge of the company for 2-3 months but denied making the connection where the meter used to be installed. however small the amount consumed.) 3. such interest is a personal property capable of appropriation and not included in the enumeration of real properties in articles 335 of the Civil Code. and may be the subject of mortgage. 15 Phil. instead of P2. and 3 of the article 1922 of the Civil Code are not applicable as neither the debtor. Act. and to pay the costs. located at Calle Real Nos. and American courts all answer the question in the affirmative. 553) 2. 34). Meyers vs. Likewise water which is confined in pipes and electricity which is conveyed by wires are subjects of larceny (Ruling Case Law. Absolute certainty as to the full amount taken is of course . 4.] En Banc. (Sec. or any other person. Thein. English. Justification of the P2 per month charge The court was justified in fixing the value of the gas at P2 per month. construing and enforcing the provisions of articles 530 and 531 of the Penal Code of Spain. Tambunting appealed. Presumably. and April 1. In this house the Manila Gas Corporation had previously installed apparatus for the delivery of gas on both the upper and lower floors. 1. 2. 3. Tambunting [G.. 1897.
Rivera took charge or possession of said vessel without the knowledge or consent of the plaintiffs and refused to deliver it to them. in which the defendant and appellant was ordered to place at the disposal of the Fausto Rubiso the pilot boat in litigation. amending solely in charging the Insular Collector of Customs with the fulfillment of the duties of the commercial register concerning the registering of vessels. Rivera [G. which facts are set forth in a deed ratified on the same date before a notary. since the two offenses are of totally distinct nature. . after the bill of the judicial sale at auction has been executed and recorded in the commercial registry.impossible. of the nature and conditions of real property. Furthermore. inasmuch as.R. Rivera's rights cannot prevail over those acquired by Fausto Rubiso in the ownership of the pilot boat Valentina. Inscription in registry is necessary and indispensable Article 573 of the Code of Commerce provides in its first paragraph that merchant vessels constitute property which may be acquired an transferred by any of the means recognized by law. because no meter was used. (US vs. Rivera for P2. consisting of 2/3 interest therein.45. Batangas. After the sale of the boat to the defendant Rivera. No. Ships or vessels are of the nature and condition of real property. No indemnity for losses and damages Aside from the fact that. sold this boat to Florentino E.] First Division. 1917. Torres (J): 5 concur. has. After the hearing of the case and the introduction of documentary evidence. on 4 January 1915. inasmuch as the amendment solely refers to the official who shall make the entry.. the vessel in question emerged unharmed from the place where it was stranded. and that Florentino E. Effects of registration to liabilities of a vessel When the absolute owner of the purchased boat. partake. wherefore this vendor is no longer entitled to exercise any action whatever in respect to the boat in question. On 10 April 1915. it cannot be affirmed that . Gelito was one of the partnership owners of the Valentina. said article was amended and appears as Section 2 of that Act. a better right than the defendant Rivera who subsequently recorded his purchase. on 23 January 1915. With the enactment of Act 1900 on 18 May 1909. at the time of the trial. and entered in the commercial registry (an unnecessary proceeding) on March 4. pursuant to article 582 of the Mercantile Code. while the private and voluntary purchase made by Rivera on a prior date was not recorded in the office of the Collector of Customs until 17 March 1915. according to the law. the record certainly does not furnish any positive evidence of the losses and damages alleged to have been occasioned. the co-owner of the other 1/3 interest in said vessel. The certificate of sale and adjudication of the boat in question was issued by the sheriff on behalf of Fausto Rubiso. The defendant appealed and moved for a new trial. in the use of his right as the sole owner of the Valentina. 5. right of first to register is primary Florentino E. In both laws. and was. This motion was denied and appellant excepted. and the rights he held are evidenced by the articles of partnership. this latter. and for this reason the provisions of article 573 of the Code of Commerce are nearly identical with article 1473 of the Civil Code. Bauan. whichever of them first registered his acquisition of the vessel in the one entitled to enjoy the protection of the law. though the latter's acquisition of the vessel at public auction. anchored in the port of Maricaban. On the other hand. Rubiso. The Supreme Court affirmed the judgment. subsequent to the date when the judgment appealed from was rendered. as in fact his name appears in the certificate of protection issued by the Bureau of Customs. but. This document was registered in the Bureau of Customs on 17 March 1915. in the office of the Collector of Customs. who was directly affected by the registration which the plaintiff made of the acquisition. to the Chinaman Sy Qui. the judgment of 6 September 1915. Acquittal in prosecution for violation of city ordinance not bar to prosecution for same offense under the general law of the land Acquittal of the charge of illegal gas installation in violation of Section 504 of the Revised Ordinances of Manila does not bar his prosecution for the offense of theft. L-11407. Article 573 of Code of Commerce vis-à-vis Article 1473 of the Civil Code Ships or vessels. was rendered. whether moved by steam or by sail. who was careful to record his acquisition. the plaintiffs brought suit in the CFI and alleged in the complaint that his clients were the owners of the pilot boat named Valentina. 5. to a certain extent. 1 took no part Facts: Bonifacio Gelito sold his share in the pilot boat Valentina. but absolute certainty upon this point is not necessary. a prosecution for violation of a city ordinance is not ordinarily a bar to a subsequent prosecution for the same offense under the general law of the land. 3. 1. The legal rule set down in the Mercantile Code subsists. the latter's creditor Fausto Rubiso. October 30. nevertheless the sale at public auction was antecedently record in the office of the Collector of Customs. suit having been brought in the justice of the peace court against the Chinaman Sy Qui to enforce payment of a certain sum of money. 10 Phil. 694. 4. Garcia Gavieres. No special finding was made for costs. 2. on account of their value and importance in the world commerce.500. under claim that he was the owner thereof. Rubiso later acquired said vessel at a public auction sale and for the sum of P55. with respect to the rights of two purchases. on January 27. but. on 27 January 1915 and was also entered in the commercial registry on 14 March 1915.) Rubiso v. Even if public auction is subsequent to private purchase. the whole ownership in the vessel having been consolidated in behalf of the Chinaman Sy Qui. The acquisition of a vessel must be included in a written instrument. with the costs against the appellant. was subsequent to its purchase by Rivera. opportunely and on prior date. Inscription in the commercial registry is necessary and indispensable in order that the purchaser's rights may be maintained against a claim filed by a third person. The latter is a third person. which had been in bad condition since 1914 and was stranded in Tingloy. all the other liabilities of the vessel in favor of the creditors shall be considered canceled. which shall not produce any effect with regard to third persons if not recorded in the commercial registry. declaring the latter to be free of all encumbrance and all claims by strangers for. when it is certain that the minimum that could have been taken was worth a determinable amount.
pressure pumps. the necessary machinery and equipment installed for carrying on the sugar industry for which it has been established must necessarily be permanent. Airline companies use forklifts. Machinery made immovable must be essential and principal elements of an industry or works Paragraph 5 of Article 415 of the New Civil Code (previously Article 344. Mindanao Bus Company’s transportation business is not carried on in a buildin g. so the company filed with the Court of Tax Appeals a petition for the review of the assessment. for the reasons aforestated. Machinery incidental to industry are not immobilized. Without costs. Machinery essential to industry in Berkenkotter v. Labrador (J): 7 concur. as essential and principal elements of a sugar central. who. jeep-wagons. instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land. EVERTEX filed for insolvency proceedings. Due to business reverses. 1. Movable equipments to be immobilized in contemplation of the law must first be "essential and principal elements" of an industry or works without which such industry or works would be "unable to function or carry on the industrial purpose for which it was established. 4. for these businesses can continue or carry on their functions without these equipments. not essential and principal. machineries of breweries used in the manufacture of liquor and soft drinks. . typewriters. 3. The Board of Tax Appeals of the City sustained the city assessor. Cu Unjieng. Assuming that the properties were considered immovables. paragraph 5. EVERTEX purchased machineries and equipment. etc. IMB machines. and the chattels located therein. are immobilized because they are essential to said industries. Machinery incidental in present case It cannot be said that the incorporation of the machinery and equipment in the central of the Mabalacat Sugar Company was not permanent in character because. The company is also owner to the land where it maintains and operates a garafe. Hence. Another loan was obtained secured by a chattel mortgage over properties with similar descriptions listed in the first schedule. the "machinery. the machineries are place therein on wooden and cement platforms. equipment thus are not real estate Aside from the element of essentiality. Afterwards. On the other hand. as included in schedule attached to the mortgage contract.the defendant acted in bad faith specifically because he acquired the vessel on a date prior to that of its acquisition at public auction by the plaintiff Rubiso. HELD: While it is true that the controverted properties appear to be immobile. a repair shop. and the sawing is conducted in the land or building. a perusal of the contract of REM and CM executed by the parties gives a contrary indication. is true and sole owner of said pilot boat.400 said maintenance and repair equipment. tenement or on a specified land. Cu Unjieng. City Assessor [G. L-17870. EVERTEX sought the annulment of the sale and conveyance of the properties to PBC as it was allegedly a violation of the INSOLVENCY LAW.R. liquid containers. the transportation business could be carried on without the repair or service shop if its rolling equipment is repaired or serviced in another shop belonging to another. The company appealed the assessment to the Board of Tax Appeals on the ground that the same are not realty. Facts: Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by motor trucks in Mindanao. having its main offices in Cagayan de Oro. Transportation business not carried on in a building. examples Movables which become immobilized by destination because they are essential and principal elements in the industry are distinguished from those which may not be so considered immobilized because they are merely incidental. restaurants. 3 took no part. In contrast. nothing detracts the parties from treating it as chattels to secure an obligation under the principle of estoppel. Article 415 (5) also requires that the industry or works be carried on in a building or on a piece of land. which are incidentals. In contrast. It failed to pay its obligation and thus. and thus retain their movable nature. guaranteed by a real estate and chattel mortgage over a parcel of land where the factory stands. The RTC held that the lease and sale were irregular as it involved properties not included in the schedule of the mortgage contract.." 2. COURT OF APPEALS 336 SCRA 324 FACTS: EVERTEX secured a loan from PBC. the company filed a petition for review with the Supreme Court. blacksmith and carpentry shops. During the date of execution of the second mortgage. etc. etc. usually found and used in hotels. Mindanao Bus v. No. PBC was the highest bidder in the public auctions. making it the owner of the properties. cash registers. Thus. not essentials. A sawmill would also be installed in a building on land more or less permanently. are merely incidentals and are not and should not be considered immobilized by destination. The Supreme Court set aside the decision subject of the petition for review and the equipment in question declared not subject to assessment as real estate for the purposes of the real estate tax. though movable in nature. In the case at bar. and instruments or implements" are found in a building constructed on the land. both the trial and appellate courts show that the intention was to treat the machineries as movables or personal property. TSAI V. of the old Civil Code) which provides machinery. and which tend directly to meet the needs of the said industry or works are immovable properties. The Court of Tax Appeal (CTA Case 710) held that the Company was liable to the payment of the realty tax on its maintenance and repair equipment. Inasmuch as the central is permanent in character. The City Assessor of Cagayan de Oro City assessed at P4. PBC initiated extrajudicial foreclosure of the mortgages. It then leased the factory premises to Tsai. September 29. receptacles. without them the sugar central would be unable to function or carry on the industrial purpose for which it was established. but the delivery trucks and adding machines which they usually own and use and are found within their industrial compounds are merely incidentals and retain their movable nature.] En Banc. tenement or specified land. 1962. so said equipment may not be considered real estate within the meaning of Article 415 (c) of the Civil Code. In the case of Berkenkotter vs. theaters.
Castillo).). plants. 1963. under TCT 25776. vs. by way of Chattel Mortgage. built on land belonging to another. but such property remains in its actual character as regards third persons who are not parties in the contract. mortgaged his 2-story residential house. Both mortgages were contained in one instrument.I. Pineda. The Pinedas failed to pay the mortgage debt when it became due. On 24 February 1961. by way of Real Estate Mortgage hypothecated a parcel of land. 2. 3. et al. etc. Jaranillo). Rufino executed a document captioned "Deed of Real Estate and Chattel Mortgages ". however. a property may have a character different from that imputed to it in said articles. 4. until fully paid. Abad.R.. the fact that the land belongs to another is immaterial. it is considered as between the parties as personal property. under Motor Vehicle Registration Certificate A-171805. registered with. November 30.] En Banc. Vicente Castro.00. with respect to third persons. Cases cited are not applicable . such as a lessee or usufructuary. which consisted of liquidated damages in the sum of P500. 209-210. it has been a constant criterion nevertheless that. borrowed from Conrado P. A building is an immovable property. [CA]). The matter depends on the circumstances and the intention of the parties. with costs against appellants. having a floor area of 912 sq. Navarro filed a complaint for foreclosure of the mortgage and for damages. On 10 August 1960. erected on a lot belonging to Atty. the house is considered as an immovable property (Art. Rufino Pineda grouped the house with the truck which is inherently a movable property. the lower court dismissed the complaint with regards to Gregorio Pineda. In the present case. upon the principles of estoppel (Evangelista vs. irrespective of whether or not said structure and the land on which it is adhered to. Clearly. The Supreme Court affirmed the decision appealed from. New Civil Code).Navarro v. was held to be a personal property not only because the deed of mortgage considered. located at San Roque. therefore. but they likewise failed to pay on the said day. 415 and 416. payable 6 months after said date or on 14 June 1959.C. Navarro. cited in Davao Sawmill vs. effective on the date of maturity. and Rufino G. 1. makes no distinctions whether the owner of the land is or is not the owner of the building. Central Altagracia. "There can not be any question that a building of mixed materials may be the subject of a chattel mortgage. It is based. and ordering Rufino Pineda and Ramona Reyes to deliver the personal properties to the Provincial Sheriff of Tarlac immediately after the lapse of 90 days in default of such payment. Tarlac. 1431. It should be noted.550. it was held that under certain conditions. does not become immobilized by attachment (Valdez vs. Summary of relevant cases In construing Arts. a house of mixed materials has been considered as a chattel between the parties and that the validity of the contract between them.. Hodges. No. who are not parties to the contract. but they likewise failed and refused to pay. a mortgaged house built on a rented land. notwithstanding that the house of Rufino Pineda was made subject of the chattel mortgage for the reason that it is erected on a land that belongs to a third person. partly. the register of Deeds of Tarlac. the house in question was treated as personal or movable property. Alto Surety). et al. Hence. Personal property may retain its character as such where it is so agreed by the parties interested even though annexed to the realty". The house which was not even declared for taxation purposes was small and made of light construction materials: G. it is enough that the house adheres to the land. if a house belonging to a person stands on a rented land belonging to another person. registered in his name. belong to the same owner (Lopez vs. C. belonging to her. ordering Juana Gonzales and spouses Rufino Pineda and Ramona Reyes to pay Conrado Navarro the sum of P2.). The view that parties to a deed of chattel mortgage may agree to consider a house as personal property for the purposes of said contract. Rufino G. Ofilada. in classifying a house as immovable property. sheets roofing. et al. trees. cited in Manarang. the Code does not require that the attachment or incorporation be made by the owner of the land. Orosa. The doctrine. the only criterion being the union or incorporation with the soil. vs. Pineda and his mother Juana Gonzales (married to Gregorio Pineda).550 with 12% compounded interest plus P500 as liquidated damages and the cost of the suit from 14 June 1960 within 90 days from receipt of the copy of the decision. Leung Yee vs. questioning the lower court’s decision in holding the deed of real estate and chattel mortgages appended to the complaint valid. The judgment was appealed directly to the Supreme Court. treat as personal property that which by nature would be real property (Standard Oil vs. Property may have a character different from that imputed to it by parties in a contract. They were granted an extension up to 30 June 1960. it as such. by the parties to the contract themselves. It is undeniable that the parties to a contract may by agreement. (42 Am. is good only insofar as the contracting parties are concerned. [CA]). else the properties mentioned in the deed of real estate and chattel mortgage be sold to realize said mortgage debt in accordance with the pertinent provisions of Act 3135 and Article 14 of Act 1508.00 and 12% per annum interest on the principal. In a case. but also and principally on the doctrine of estoppel.W. such as houses. Jur. N. 334 and 335 of the Spanish Civil Code (corresponding to Arts. et al. They were granted another extension up to 30 July 1960. in that "the parties have so expressly agreed" in the mortgage to consider the house as a chattel "for its smallness and mixed materials of sawali and wood". the sum of P2. for purposes of the application of the Chattel Mortgage Law. Pineda [G.C. for it is now well settled that an object placed on land by one who has only a temporary right to the same. Lower Court’s Decision predicated on the doctrine of estoppel and not only on the ground that the house mortgaged was erected on the land which belonged to a third person The trial court did not predicate its decision declaring the deed of chattel mortgage valid solely on the ground that the house mortgaged was erected on the land which belonged to a third person. Paredes (J): 8 concur Facts: On 14 December 1959. but also because it did not form an integral part of the land (Evangelista vs. which was registered in both the Office of the Register of Deeds and the Motor Vehicles Office of Tarlac. has been recognized. that in case of immovables by incorporation. Strong Machinery Co. Building is immovable property Article 415 of the New Civil Code.). sawali and wooden walls and wooden posts. in which case. it may be mortgaged as a personal property if so stipulated in the document of mortgage. whereby Juana Gonzales. that the principle is predicated on statements by the owner declaring his house to be a chattel. a conduct that may conceivably estop him from subsequent claiming otherwise (Ladera. and 1 motor truck. L-18456. To secure the indebtedness. and specially in execution proceedings.m. Tarlac. gathered from these cases is that although in some instances.
00 is valid but ruling that the Deed of Real Estate Mortgage for an additional loan of P20. it is obvious that the inclusion of 'building' separate and distinct from the land. validity cannot be given to it . Orosa.000. 5. dated 29 March 1978. et al. the mortgage was executed before such eventuality. in the absence of stipulation of the improvements thereon. the subject building was a theater. In the case at bar. 1987. third persons assailed the validity of the deed of chattel mortgages. such mortgage executed after the issuance of the sales patent and of the Original Certificate of Title. semi-concrete residential building with warehouse space (total area of 263 sq. In the case of Lopez vs. Prudential Bank v. in pari delicto may not be invoked to defeat the policy of the State neither may the doctrine of estoppel give a validating effect to a void contract. 515. 122 and 124 of the Public Land Act and Section 2 of RA 730. the deeds of Real Estate Mortgage were extrajudicially foreclosed. The issue was raised to the CF Zambales and Olongapo City which. Director of Lands vs.00 attached permanently to the soil. The Supreme Court modified the decision of the CFI Zambales & Olongapo. Iya. Panis [G. Subsequently. and the latter. Director of Lands vs. on 2 May 1973. Strong Machinery Co. the petition. Estoppel does not give validating effect to a void contract As regards the second mortgage executed. May 30.] First Division. on 15 May 1972. On 24 April 1973. Sections 121. 37 Phil. 28. Such a mortgage would be still a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land (Leung Yee vs. possessory rights may be validly transferred in a deed of mortgage While a mortgage of land necessarily includes. Building separate and distinct from the land In the enumeration of properties under Article 415 of the Civil Code of the Philippines. The auction sale was held despite written request from the Magcales through counsel. and is therefore null and void. it was one of the parties to the contract of mortgages who assailed its validity. by the Ex-Oficio Register of Deeds of Zambales. 4. in the present case. it is generally considered that as between parties to a contract.. Fernando A. Indeed. L-10817-18. and Surety Co. On the basis of the Patent. and upon its transcription in the Registration Book of the Province of Zambales. belonging to the owner of the house himself. which title with annotation release in favor of the mortgage. for the City Sheriff to desist from going with the scheduled public auction sale. 122 and 124 of the Public Land Act refer to land already acquired under the Public Land Act or any improvement thereon. A rider is also included in the deed that in the event the Sales Patent on the lot is issued of Bureau of Lands.. vs. buildings. Both have no application to the assailed mortgage in the case at bar. Peña. the Magcales secured an additional loan from Prudential Bank. in favor of the Magcales. Mortgage made after issuance of Sales Patent an OCT prohibited. Public land act and RA 730 not violated in first mortgage As to restrictions appearing to the Magcales’ title. the Magcales executed in favor of Prudential Bank a deed of Real Estate Mortgage over a 2-storey. "Law on Natural Resources". de Bautista vs. OCT P-2554 was issued in the name of Fernando Magcale. declared the deeds of Real Estate Mortgage as null and void. Meer. it does not encumber nor alienate the land. 644). as the former. 3. Magcale and Teodula Baluyut Magcale secured a loan of P70. L-14702. The Real Estate Mortgage was registered under the Provisions of Act 3344 with the Registry of Deeds of Zambales on 23 November 1971. The Iya cases refer to a building or a house of strong materials. Even if the title was voluntary surrendered to the bank for the mortgage to be annotated without the prior approval of the Ministry of Natural Resources. 1958.. permanently adhered to the land.000. Possessory rights over said properties before title is vested on the grantee. Orosa.. 2. No. Feb.00 is null and void. in said provision of law can only mean that a building is by itself an immovable property. falls squarely under the prohibitions stated in Sections 121.. In these two cases and in the Leung Yee Case. which the court denied on 10 January 1979 for lack of merit. without prejudice to any appropriate action the Government may take against private respondents. For failure of the Magcales to pay their obligation to the Bank after it became due. declaring that the Deed of Real Estate Mortgage for P70. Building can be mortgaged apart from the land it is built. Paras (J): 4 concur. built of materials worth more than P62. To secure payment of this loan. 3 SCRA 438 ). L-50008. vs. 1958). 28. on 3 November 1978. August 31. A valid real estate mortgage may be constituted on the building erected on the land belonging to another The original mortgage was executed (19 November 1971) before the issuance of the final patent (24 April 1972) and before the government was divested of its title to the land (15 May 1972). Consequent to the foreclosure was the sale of the properties mortgaged to the bank as the highest bidder in a public auction sale conducted by the City Sheriff on 12 April 1978. 49). may be validly transferred or conveyed as in a deed of mortgage (Vda.000.000. Jurado. Marcos. Facts: On 19 November 1971. 1.R.The cases cited by appellants are not applicable to the present case. it is evident that the mortgage executed by Magcale on his own building which was erected on the land belonging to the government is to all intents and purposes a valid mortgage. the Register of Deeds is authorized to hold the Registration until the mortgage is cancelled or annotate the encumbrance on the title upon authority from the Secretary of Agriculture and Natural Resources.). still a building by itself may be mortgaged apart from the land on which it has been built. et al. May 23. 1961. possessory rights over which were mortgaged to rudential Bank. Jr.00 from Prudential Bank. L-10837-38. the Secretary of Agriculture issued Miscellaneous Sales Patent 4776 over the parcel of land. De Leon. and granting upon the mortgagee the right of occupancy on the lot where the property is erected. Inc. 96 Phil. Section 2 of RA 730 refers to encumbrance or alienation before the patent is issued because it refers specifically to encumbrance or alienation on the land itself and does not mention anything regarding the improvements existing thereon. 110 Phil. (Lopez vs. The bank filed a motion for reconsideration on 14 December 1978. secured by another deed of Real Estate Mortgage registeed with the Registry of Deeds in Olongapo City. Hence. Associated Inc. an event which takes effect only on the issuance of the sales patent and its subsequent registration in the Office of the Register of Deeds (Visayan Realty Inc.m. p.
Hence. and the sale of the property to the machinery company in satisfaction of the mortgage was annotated in the same registry on 29 December 1913.R. supra. was not registered and made no reference to the building erected on the land and would appear to have been executed for the purpose of curing any defects which might be found to exist in the machinery company's title to the building under the sheriff's certificate of sale. The machinery company went into possession of the building at or about the time when this sale took place. It would be futile to proceed with the case against one respondent alone. and it has continued in possession ever since. is considered immovable property. vda. under the law. however. 3. The indebtedness secured by this instrument not having been paid when it fell due.” Punsalan filed a Motion for Reconsideration of the Order. Jur. the building and improvement thereon. the property was foreclosed on 16 December 1970. under Section 2. 1918. 2. was the former registered owner of a parcel of land consisting of 340 m2 situated in Bamban. Lacsamana secured title over the property in her name (TCT 173744) as well as separate tax declarations for the land and building. but for failure to pay said amount. It is a real action. a Deed of Sale was executed between PNB (Tarlac Branch) and Lacsamana over the property.by estoppel if it is prohibited by law or is against public policy (19 Am. particularly to include in the sale. Punsalan then leased the warehouse to one Hermogenes Sibal for a period of 10 years starting January 1975. as such the action of the plaintiff is a real action affecting title to real property which. the "Compañia Agricola Filipina" executed another mortgage to Leung Yee upon the building. In 1963. without any reference to the land on which it stood. which is to recover said real property. separate and apart from the land on which it stood. Annulment or rescission of sale of real property does not operate to efface the objective of recovering real property Even if one does not directly seek the recovery of title or possession of the property. Lack of allegation of improper venue does not warrant case to proceed as it also require other indispensable party The contention that the case should proceed as the respondent failed to allege improper venue and. Punsalan mortgaged the land to PNB (Tarlac Branch) for P10. Strong Machinery [G. The CFI dismissed the case on the ground of improper venue on 25 April 1980. PNB (Tarlac Branch) was the highest bidder in said foreclosure proceedings. is untenable. Upon the failure of the mortgagor to pay the amount of the . in pursuance of the terms of the mortgage instrument. 1983. Jr. vs.] First Division. A building treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable property. the month of December 1913. the validity of which is being questioned. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case. although executed in a public document. therefore. However. and executed a chattel mortgage thereon to secure payment of the purchase price. Rule 4 of the New Rules of Court. Leung Yee v. Punsalan commenced suit for "Annulment of Deed of Sale with Damages" against PNB and Lacsamana before the CFI Rizal. The mortgage was registered in the chattel mortgage registry. L-55729. 1. This contract was amended on 31 July 1978. An indispensable party exist besides the parties in the Amended Contract of Sale. Melencio-Herrera (J): 5 concur Facts: Antonio Punsalan. Buildings are always immovable under the Code Buildings are always immovable under the Code. which warehouse is an immovable property pursuant to Article 415 (1) of the New Civil Code. issues had already been joined.00. Province of Tarlac. must be tried in the province where the pro perty or any part thereof lies. his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which. De los Amas and Alino. the bank secured title thereto only on 14 December 1977. At or about the time when the chattel mortgage was executed in favor of the machinery company. Punsalan declared said warehouse for tax purposes for which he was issued Tax Declaration 5619. Quezon City. but this deed of sale. however. 802). No. Such does not. with cost against the petitioner. On 14 January 1914. 3 took no part. Carson (J): 5 concur. to secure payment of the balance of its indebtedness to Leung Yee under a contract for the construction of the building. Branch XXXI. the "Compañia Agricola Filipina" executed a deed of sale of the land upon which the building stood to the machinery company. and was bought in by the machinery company. essentially impugning the validity of the sale of the building as embodied in the Amended Deed of Sale. Punsalan constructed a warehouse on said property. while the property was still in the alleged possession of Punsalan and with the alleged acquiescence of PNB (Tarlac Branch). On 22 November 1979. and upon securing a permit from the Municipal Mayor.R. Any new transaction. which the Court denied on 1 September 1980. that is to say. L-11658. and. Tarlac.. in 1974. No. March 28. Punsalan v. By virtue of said instruments. the petition for Certiorari.] First Division. Inc. would be subject to whatever steps the Government may take for the reversion of the land in its favor. Facts: The "Compañia Agricola Filipina" bought rice-cleaning machinery from the machinery company. It included in the mortgage deed the building of strong materials in which the machinery was installed. In the meantime. preclude new contracts that may be entered into in accordance with the requirements of the law. the recovery of which is petitioner's primary objective. The Supreme Court denied the petition without prejudice to the refilling of the case by Punsalan in the proper forum. IAC. Arsenal vs. the mortgaged property was sold by the sheriff.000. De Lacsamana [G. finding that the “warehouse allegedly owned and construct ed by the plaintiff on the land of the PNB situated in the Municipality of Bamban. It is not within the competence of any citizen to barter away what public policy by law seeks to preserve (Gonzalo Puyat & Sons. 143 SCRA 54 ). On 26 July 1978. February 15.
"Good faith. Shadel. this provision must always be understood on the basis of the good faith mentioned in the first paragraph. but rather a state or condition of mind which can only be judged of by actual or fancied tokens or signs. not Article 1473 (on good faith). is in its last analysis a question of intention. The public records cannot be converted into instruments of fraud and oppression by one who secures an inscription therein in bad faith. and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. nor the annotation in that registry of the sale of the mortgaged property. 1. in its second paragraph. relying upon Article 1473 and the fact that the company had its title to the building registered prior to the date of the registry of plaintiff’s certificate. Such an interpretation placed upon the language of this section would open wide the door to fraud and collusion." mortgages of personal property executed in the manner and form prescribed in the statute. 3. which was in possession. do not and cannot accrue under an inscription "in bad faith. Construction of Article 1473 as to issue of good faith It is always to be understood on the basis of the good faith mentioned in the first paragraph. Leung Yee secured judgment for that amount. or the want of it. provides that the title of conveyance of ownership of the real property that is first recorded in the registry shall have preference. 2. Possession before sheriff’s sale. 108 Cal. Miller. who was the highest bidder at the sheriff's sale. is not a visible.indebtedness secured by the mortgage. Breaux-Renoudet. 250. 8. filed with the sheriff a sworn statement setting up its claim of title and demanding the release of the property from the levy. and that the machinery company must be held to be the owner of the property under the third paragraph of the above cited article of the code.. Thereafter. Gilman. vs. It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein. had any effect whatever so far as the building was concerned. So it is that "the honesty of intention. The Court gave judgment in favor of the machinery company. and it appears that he had such notice of the defect as would have led to its discovery had he acted with that measure of precaution which may reasonably be required of a prudent man in a like situation.. but on the ground that the agreed statement of facts discloses that neither the purchase of the building by plaintiff nor his inscription of the sheriff's certificate of sale in his favor was made in good faith.000. be determined. in reliance upon which the sheriff sold the property at public auction to the plaintiff. and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as real property. it appearing that the company first took possession of the property. controlling as to ownership of property The ruling cannot be sustained on the ground of Article 1473. Co. the machinery company. levied execution upon the building. The building of strong materials in which the machinery was installed was real property." "the honest lawful intent. upon demand of the sheriff." to the benefit of the person who thus makes the inscription. The current action was instituted to recover possession of the building from the machinery company. in relation to "possession" and "title.) . or his willful closing of his eyes to the possibility of the existence of a defect in his vendor's title. in given cases. Hence the appeal. 504. 4. Construction should not defeat the purpose of law Even if Article 1473 of the Civil Code require "good faith. Although article 1473. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard. will not make him an innocent purchaser for value. The force and effect given by law to an inscription in a public record presupposes the good faith of him who enters such inscription. 2094-2098." in express terms. 17. 5. the legislator could not have wished to strike it out and to sanction bad faith. the question is to be decided in accordance with the following paragraph." which constitutes good faith implies a "freedom from knowledge and circumstances which ought to put a person on inquiry. it remains an essential requisite of registration as it could not have been the intention of the legislator to base the preferential right secured this article of the code upon an inscription of title in bad faith. therefore. Cardenas vs. but in ascertaining the intention by which one is actuated on a given occasion. Ann." and so it is that proof of such knowledge overcomes the presumption of good faith in which the courts always indulge in the absence of proof to the contrary. which are predicated upon an inscription in a public registry. bought it in at the sheriff's sale on or about the 18 December 1914. Cf. tangible fact that can be seen or touched.. 55 Vt. Bromley. Registry of chattel mortgage does not affect character of the building and the machineries installed therein The Chattel Mortgage Law contemplates and makes provision for mortgages of personal property. 10. and had the sheriff's certificate of sale duly registered in the land registry of the Province of Cavite. Building separate from land does not affect character as real property." (Wilder vs. and the sole purpose and object of the chattel mortgage registry is to provide for the registry of "Chattel mortgages. just to comply with a mere formality which. if it afterwards develops that the title was in fact defective. Good faith an essential requisite of “inscription” of property in registry. Test of good faith Good faith. or the lack of it. 6. the Court is necessarily controlled by the evidence as to the conduct and outward acts by which alone the inward motive may. 52 La. His mere refusal to believe that such defect exists. At the time when the execution was levied upon the building. The Supreme Court affirmed the judgment with costs against the appellant. and rights created by statute. with safety. it having been found that the second purchasers who record their purchase had knowledge of the precious sale. second paragraph. Pinkerton Bros. 505. even if not mentioned unlike in “possession” and “title”. and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.. Bad faith: One cannot claim acquisition of title in good faith if knowledgeable of defect or lack of title One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein. vs. and further." but contain no express requirement as to "good faith" in relation to the "inscription" of the property in the registry. 119 Mich. that the building and the land were sold to the machinery company long prior to the date of the sheriff's sale to the plaintiff. Leung Yee executed an indemnity bond in favor of the sheriff in the sum of P12. does not obtain even in real disputes between third persons. Cypress Lumber Co.
the only positive relief prayed for. 2. and the costs. Having been admitted in forma pauperis. the case is within the jurisdiction of the Justice of the Peace Court (as per Section 88. Teneza [G. moral and consequential damages amounting to P600. claiming to the owners thereof. November 29. Abra. 1. As this is a case for recovery of damages where the demand does not exceed PhP 2. Exception.] En Banc. The CFI Abra dismissed the complaint claiming that the action was within the exclusive (original) jurisdiction of the Justice of the Peace Court of Lagangilang. paragraph 1. The Bicerras filed a complaint claiming actual damages of P200. RA 296 as amended) and not the CFI (Section 44. when demolished A house is classified as immovable property by reason of its adherence to the soil on which it is built (Article 415. id.R. L-16218. Civil Code).000) built on a lot owned by them in Lagangilang. no costs were adjudged. a declaration of being the owners of the dismantled house and/or of the materials in no wise constitutes the relief itself which if granted by final judgment could be enforceable by execution. This classification holds true regardless of the fact that the house may be situated on land belonging to a different owner.000 and that there is no real property litigated as the house has ceased to exist. Further. as in this case. Recovery of damages not exceeding P2.) .Bicerra v. But once the house is demolished. which the Tenezas forcibly demolished in January 1957.000 and involving no real property belong to the Justice of the Peace Court The complaint is for recovery of damages. No. House is immovable property even if situated on land belonging to a different owner. but is only incidental to the real cause of action to recover damages. 1962. Abra. it ceases to exist as such and hence its character as an immovable likewise ceases. The materials of the house were placed in the custody of the barrio lieutenant. The Supreme Court affirmed the order appealed. Makalintal (J): 10 concur. Facts: The Bicerras are supposedly the owners of the house (PhP 20.
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