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G.R. No.

L-11658
February 15, 1918
LEUNG YEE, plaintiff-appellant,
vs.
FRANK L. STRONG MACHINERY COMPANY and J. G. WILLIAMSON, defendantsappellees.
Booram and Mahoney for appellant.
Williams, Ferrier and SyCip for appellees.

CARSON, J.:
The "Compañia Agricola Filipina" bought a considerable quantity of rice-cleaning
machinery company from the defendant machinery company, and executed a
chattel mortgage thereon to secure payment of the purchase price. It included in the
mortgage deed the building of strong materials in which the machinery was
installed, without any reference to the land on which it stood. The indebtedness
secured by this instrument not having been paid when it fell due, the mortgaged
property was sold by the sheriff, in pursuance of the terms of the mortgage
instrument, and was bought in by the machinery company. The mortgage was
registered in the chattel mortgage registry, and the sale of the property to the
machinery company in satisfaction of the mortgage was annotated in the same
registry on December 29, 1913.
A few weeks thereafter, on or about the 14th of January, 1914, the "Compañia
Agricola Filipina" executed a deed of sale of the land upon which the building stood
to the machinery company, but this deed of sale, although executed in a public
document, was not registered. This deed makes 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, that is to
say, the month of December, 1913, and it has continued in possession ever since.
At or about the time when the chattel mortgage was executed in favor of the
machinery company, the mortgagor, the "Compañia Agricola Filipina" executed
another mortgage to the plaintiff upon the building, separate and apart from the
land on which it stood, to secure payment of the balance of its indebtedness to the
plaintiff under a contract for the construction of the building. Upon the failure of the
mortgagor to pay the amount of the indebtedness secured by the mortgage, the
plaintiff secured judgment for that amount, levied execution upon the building,
bought it in at the sheriff's sale on or about the 18th of December, 1914, and had
the sheriff's certificate of the sale duly registered in the land registry of the Province
of Cavite.
At the time when the execution was levied upon the building, the defendant
machinery company, which was in possession, filed with the sheriff a sworn
statement setting up its claim of title and demanding the release of the property
from the levy. Thereafter, upon demand of the sheriff, the plaintiff executed an
indemnity bond in favor of the sheriff in the sum of P12,000, in reliance upon which
the sheriff sold the property at public auction to the plaintiff, who was the highest
bidder at the sheriff's sale.
This action was instituted by the plaintiff to recover possession of the building from
the machinery company.
The trial judge, relying upon the terms of article 1473 of the Civil Code, gave
judgment in favor of the machinery company, on the ground that the company had
its title to the building registered prior to the date of registry of the plaintiff's
certificate.
Article 1473 of the Civil Code is as follows:
If the same thing should have been sold to different vendees, the ownership shall be
transfer to the person who may have the first taken possession thereof in good faith,
if it should be personal property.

Should it be real property, it shall belong to the person acquiring it who first
recorded it in the registry.
Should there be no entry, the property shall belong to the person who first took
possession of it in good faith, and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
The registry her referred to is of course the registry of real property, and it must be
apparent that the annotation or inscription of a deed of sale of real property in a
chattel mortgage registry cannot be given the legal effect of an inscription in the
registry of real property. By its express terms, the Chattel Mortgage Law
contemplates and makes provision for mortgages of personal property; and the sole
purpose and object of the chattel mortgage registry is to provide for the registry of
"Chattel mortgages," that is to say, mortgages of personal property executed in the
manner and form prescribed in the statute. The building of strong materials in which
the rice-cleaning machinery was installed by the "Compañia Agricola Filipina" was
real property, 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 follows that neither the original registry in the chattel mortgage of the
building and the machinery installed therein, not the annotation in that registry of
the sale of the mortgaged property, had any effect whatever so far as the building
was concerned.
We conclude that the ruling in favor of the machinery company cannot be sustained
on the ground assigned by the trial judge. We are of opinion, however, that the
judgment must be sustained on the ground that the agreed statement of facts in the
court below discloses that neither the purchase of the building by the plaintiff nor his
inscription of the sheriff's certificate of sale in his favor was made in good faith, 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, it appearing that the company
first took possession of the property; and further, 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.
It has been suggested that since the provisions of article 1473 of the Civil Code
require "good faith," in express terms, in relation to "possession" and "title," but
contain no express requirement as to "good faith" in relation to the "inscription" of
the property on the registry, it must be presumed that good faith is not an essential
requisite of registration in order that it may have the effect contemplated in this
article. We cannot agree with this contention. It could not have been the intention of
the legislator to base the preferential right secured under this article of the code
upon an inscription of title in bad faith. Such an interpretation placed upon the
language of this section would open wide the door to fraud and collusion. The public
records cannot be converted into instruments of fraud and oppression by one who
secures an inscription therein in bad faith. The force and effect given by law to an
inscription in a public record presupposes the good faith of him who enters such
inscription; and rights created by statute, which are predicated upon an inscription in
a public registry, do not and cannot accrue under an inscription "in bad faith," to the
benefit of the person who thus makes the inscription.
Construing the second paragraph of this article of the code, the supreme court of
Spain held in its sentencia of the 13th of May, 1908, that:
This rule is always to be understood on the basis of the good faith mentioned in the
first paragraph; therefore, it having been found that the second purchasers who
record their purchase had knowledge of the previous sale, the question is to be
decided in accordance with the following paragraph. (Note 2, art. 1473, Civ. Code,
Medina and Maranon [1911] edition.)
Although article 1473, in its second paragraph, provides that the title of conveyance
of ownership of the real property that is first recorded in the registry shall have

preference, this provision must always be understood on the basis of the good faith
mentioned in the first paragraph; the legislator could not have wished to strike it out
and to sanction bad faith, just to comply with a mere formality which, in given cases,
does not obtain even in real disputes between third persons. (Note 2, art. 1473, Civ.
Code, issued by the publishers of the La Revista de los Tribunales, 13th edition.)
The agreed statement of facts clearly discloses that the plaintiff, when he bought the
building at the sheriff's sale and inscribed his title in the land registry, was duly
notified that the machinery company had bought the building from plaintiff's
judgment debtor; that it had gone into possession long prior to the sheriff's sale; and
that it was in possession at the time when the sheriff executed his levy. The
execution of an indemnity bond by the plaintiff in favor of the sheriff, after the
machinery company had filed its sworn claim of ownership, leaves no room for doubt
in this regard. Having bought in the building at the sheriff's sale with full knowledge
that at the time of the levy and sale the building had already been sold to the
machinery company by the judgment debtor, the plaintiff cannot be said to have
been a purchaser in good faith; and of course, the subsequent inscription of the
sheriff's certificate of title must be held to have been tainted with the same defect.
Perhaps we should make it clear that in holding that the inscription of the sheriff's
certificate of sale to the plaintiff was not made in good faith, we should not be
understood as questioning, in any way, the good faith and genuineness of the
plaintiff's claim against the "Compañia Agricola Filipina." The truth is that both the
plaintiff and the defendant company appear to have had just and righteous claims
against their common debtor. No criticism can properly be made of the exercise of
the utmost diligence by the plaintiff in asserting and exercising his right to recover
the amount of his claim from the estate of the common debtor. We are strongly
inclined to believe that in procuring the levy of execution upon the factory building
and in buying it at the sheriff's sale, he considered that he was doing no more than
he had a right to do under all the circumstances, and it is highly possible and even
probable that he thought at that time that he would be able to maintain his position
in a contest with the machinery company. There was no collusion on his part with the
common debtor, and no thought of the perpetration of a fraud upon the rights of
another, in the ordinary sense of the word. He may have hoped, and doubtless he
did hope, that the title of the machinery company would not stand the test of an
action in a court of law; and if later developments had confirmed his unfounded
hopes, no one could question the legality of the propriety of the course he adopted.
But it appearing that he had full knowledge of the machinery company's claim of
ownership when he executed the indemnity bond and bought in the property at the
sheriff's sale, and it appearing further that the machinery company's claim of
ownership was well founded, he cannot be said to have been an innocent purchaser
for value. He took the risk and must stand by the consequences; and it is in this
sense that we find that he was not a purchaser in good faith.
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; 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. A purchaser cannot close his eyes to facts which should put a reasonable
man upon his guard, and then claim that he acted in good faith under the belief that
there was no defect in the title of the vendor. His mere refusal to believe that such
defect exists, or his willful closing of his eyes to the possibility of the existence of a
defect in his vendor's title, will not make him an innocent purchaser for value, if
afterwards develops that the title was in fact defective, and it appears that he had
such notice of the defects as would have led to its discovery had he acted with that
measure of precaution which may reasonably be acquired of a prudent man in a like

situation. Good faith, or lack of it, is in its analysis a question of intention; but in
ascertaining the intention by which one is actuated on a given occasion, we are
necessarily controlled by the evidence as to the conduct and outward acts by which
alone the inward motive may, with safety, be determined. So it is that "the honesty
of intention," "the honest lawful intent," which constitutes good faith implies a
"freedom from knowledge and circumstances which ought to put a person on
inquiry," 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.
"Good faith, or the want of it, is not a visible, tangible fact that can be seen or
touched, but rather a state or condition of mind which can only be judged of by
actual or fancied tokens or signs." (Wilder vs.
 Gilman, 55 Vt., 504, 505; Cf. Cardenas
Lumber Co. vs.
 Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co. vs.
 Bromley, 119
Mich., 8, 10, 17.)
We conclude that upon the grounds herein set forth the disposing part of the
decision and judgment entered in the court below should be affirmed with costs of
this instance against the appellant. So ordered.
G.R. No. L-55729 March 28, 1983
ANTONIO PUNSALAN, JR., petitioner,
vs.
REMEDIOS VDA. DE LACSAMANA and THE HONORABLE JUDGE RODOLFO A.
ORTIZ, respondents.
Benjamin S. Benito & Associates for petitioner.
Expedito Yummul for private respondent.
MELENCIO-HERRERA, J.
:
The sole issue presented by petitioner for resolution is whether or not respondent
Court erred in denying the Motion to Set Case for Pre-trial with respect to respondent
Remedios Vda. de Lacsamana as the case had been dismissed on the ground of
improper venue upon motion of co-respondent Philippine National Bank (PNB).
It appears that petitioner, Antonio Punsalan, Jr., was the former registered owner of a
parcel of land consisting of 340 square meters situated in Bamban, Tarlac. In 1963,
petitioner mortgaged said land to respondent PNB (Tarlac Branch) in the amount of
P10,000.00, but for failure to pay said amount, the property was foreclosed on
December 16, 1970. Respondent PNB (Tarlac Branch) was the highest bidder in said
foreclosure proceedings. However, the bank secured title thereto only on December
14, 1977.
In the meantime, in 1974, while the properly was still in the alleged possession of
petitioner and with the alleged acquiescence of respondent PNB (Tarlac Branch), and
upon securing a permit from the Municipal Mayor, petitioner constructed a
warehouse on said property. Petitioner declared said warehouse for tax purposes for
which he was issued Tax Declaration No. 5619. Petitioner then leased the warehouse
to one Hermogenes Sibal for a period of 10 years starting January 1975.
On July 26, 1978, a Deed of Sale was executed between respondent PNB (Tarlac
Branch) and respondent Lacsamana over the property. This contract was amended
on July 31, 1978, particularly to include in the sale, the building and improvement
thereon. By virtue of said instruments, respondent - Lacsamana secured title over
the property in her name (TCT No. 173744) as well as separate tax declarations for
the land and building. 1
On November 22, 1979, petitioner commenced suit for "Annulment of Deed of Sale
with Damages" against herein respondents PNB and Lacsamana before respondent
Court of First Instance of Rizal, Branch XXXI, Quezon City, essentially impugning the
validity of the sale of the building as embodied in the Amended Deed of Sale. In this
connection, petitioner alleged:
xxx xxx xxx

was the lessee of a parcel of land situated in the City of Manila and owner of the house of strong materials built thereon. 1922. petitioner. be awarded to him. Respondent PNB is an indispensable party as the validity of the Amended Contract of Sale between the former and respondent Lacsamana is in issue. vs. The clauses in said document describing the property intended to be thus mortgage are expressed in the following words: . petitioner contended that the action for annulment of deed of sale with damages is in the nature of a personal action. Petitioner prayed that the Deed of Sale of the building in favor of respondent Lacsamana be declared null and void and that damages in the total sum of P230. Rule 4) 10.respondent Court denied reconsideration for lack of merit. On September 1. notwithstanding the fact that said building is not owned by the bank either by virtue of the public auction sale conducted by the Sheriff and sold to the Philippine National Bank or by virtue of the Deed of Sale executed by the bank itself in its favor on September 21. 23.. the recovery of which is petitioner's primary objective. this Court resolves to DISMISS the plaintiff's complaint for improper venue considering that the plaintiff's complaint which seeks for the declaration as null and void. 1980. executed a document dated July 31. which is not an action affecting title to real property. 1978. Rule 4 of the New Rules of Court. It would.
 STREET. by virtue of the request of defendant . in the proper forum. under the law. they have violated the principle against 'pactum commisorium'. 5 In his Motion for Reconsideration of the aforestated Order. respondent PNB filed a Motion to Dismiss on the ground that venue was improperly laid considering that the building was real property under article 415 (1) of the New Civil Code and therefore section 2(a) of Rule 4 should apply. 9 Respondent Court. Philippine National Bank. considered against the plaintiff's opposition thereto dated April 1. 5619. 1980. hence. register of deeds of the City of Manila.. respondent. including the reply therewith of said defendant.. We affirm respondent Court's Order denying the setting for pre-trial. only limited the sale to the land. Costs against petitioner. 1980. as register of deeds of the City of Manila. 2 In her Answer filed on March 4.. respondent Court granted respondent PNB's Motion to Dismiss as follows: Acting upon the 'Motion to Dismiss' of the defendant Philippine National Bank dated March 13. G. Province of Tarlac.22. in favor of the Standard Oil Company of New York. Petitioner's other contention that the case should proceed in so far as respondent Lacsamana is concerned as she had already filed an Answer. SO ORDERED. 3 On March 14. It appears from the petition that on November 27. 1980 and September 1.. 1977 . In the Order of November 10. Rule 16) 11.. that the sale in its favor should likewise have included the building.R. de Vera. the petition is hereby denied without prejudice to the refiling of the case by petitioner Antonio Punsalan. and.. be futile to proceed with the case against respondent Lacsamana alone. Jr. That defendant. 1 of the New Civil Code. No..000. purporting to convey to the petitioner by way of mortgage both the leasehold interest in said lot and the building which stands thereon. is considered immovable property. L-20329 March 16. indeed. It is a real action. therefore. must be tried in the province where the property or any part thereof lies. 4 Opposing said Motion to Dismiss. as such the action of the plaintiff is a real action affecting title to real property which. in so far as respondent Lacsamana was concerned. 7 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. wherein said defendant bank as Vendor sold to defendant Lacsamana the building owned by the plaintiff under Tax Declaration No. Petitioner then filed a Motion to Set Case for Pre-trial.. therefore. That said defendant bank fraudulently mentioned . Hence.. by selling the building which never became the property of defendant. 8 While it is true that petitioner does not directly seek the recovery of title or possession of the property in question.
City Fiscal Revilla and Assistant City Fiscal Rodas for respondent. through its Branch Manager . 1923 THE STANDARD OIL COMPANY OF NEW YORK. No. 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. 1980. did not err in dismissing the case on the ground of improper venue (Section 2. entitled Amendment to Deed of Absolute Sale . 1980 respondent Court denied said Motion to Set Case for Pre-trial as the case was already dismissed in the previous Orders of April 25. J. on July 31. Vda.. which warehouse is an immovable property pursuant to Article 415. 1980. is likewise untenable. his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which. Vda.: This cause is before us upon demurrer interposed by the respondent. 6 Buildings are always immovable under the Code. Joaquin Jaramillo. Ross. under Section 2. WHEREFORE. issues had already been joined. de Vera.. seeking a peremptory mandamus to compel the respondent to record in the proper register a document purporting to be a chattel mortgage executed in the City of Manila by Gervasia de la Rosa. involves a warehouse allegedly owned and constructed by the plaintiff on the land of the defendant Philippine National Bank situated in the Municipality of Bamban. 1980. The warehouse claimed to be owned by petitioner is an immovable or real property as provided in article 415(l) of the Civil Code. to an original petition of the Standard Oil Company of New York. de Lacsamana. upon which date she executed a document in the form of a chattel mortgage. the amendment to Deed of Absolute Sale executed by the defendant Philippine National Bank in favor of the defendant Remedios T. petitioner reiterated the argument that the action to annul does not involve ownership or title to property but is limited to the validity of the deed of sale and emphasized that the case should proceed with or without respondent PNB as respondent Lacsamana had already filed her Answer to the Complaint and no issue on venue had been raised by the latter. which is to recover said real property.. notwithstanding no legal basis for the same and despite full knowledge that the Certificate of Sale executed by the sheriff in its favor . Gervasia de la Rosa.00. Lawrence and Selph for petitioner. which was timely raised (Section 1. more or less. 1980. as the issues had already been joined with the filing of respondent Lacsamana's Answer. to which we gave due course. this Petition for Certiorari. which did not allege improper venue and. On April 25..-respondent Lacsamana averred the affirmative defense of lack of cause of action in that she was a purchaser for value and invoked the principle in Civil Law that the "accessory follows the principal". 1978. Vda. which seeks to recover not the title nor possession of the property but to compel payment of damages. JOAQUIN JARAMILLO.

However. are law in this jurisdiction. and affects nobody's rights except as a specifies of notice.
J. Other situations are constantly arising. situated on the aforesaid leased premises. No. Arsenio Suazo and Jose L. 1935 DAVAO SAW MILL CO.R. The demurrer is overruled. but acting at that time in the capacity of Judge of the fourth branch of the Court of First Instance of the Ninth Judicial District.. and no provision of law can be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage. after quoting section 5 of the Chattel Mortgage Law (Act No. considered as a source of title. is the holder of a lumber concession from the Government of the Philippine Islands. in the City of Manila. in the event the party of . INC. title. the petitioner caused the same to be presented to the respondent. and it is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. and it is his duty to accept the proper fee and place the instrument on record. After said document had been duly acknowledge and delivered. Joaquin Jaramillo. and unless within the period of five days from the date of the notification hereof. Those articles state rules which. for the purpose of having the same recorded in the book of record of chattel mortgages. The original provisions touching this matter are contained in section 15 of the Chattel Mortgage Law (Act No. In the contract of lease between the sawmill company and the owner of the land there appeared the following provision: That on the expiration of the period agreed upon. APRONIANO G. The efficacy of the act of recording a chattel mortgage consists in the fact that it operates as constructive notice of the existence of the contract. for the reason that the interest therein mortgaged did not appear to be personal property. It has operated a sawmill in the sitio of Maa. therefore. plaintiff-appellant. but that decision is not decisive of the question now before us. where they are now found. CASTILLO and DAVAO LIGHT & POWER CO. (2) The building. and from time to time are presented to this court.
 Ferrier for appellees. Some of the implements thus used were clearly personal property. all the improvements and buildings introduced and erected by the party of the second part shall pass to the exclusive ownership of the party of the first part without any obligation on its part to pay any amount for said improvements and buildings. this court held that where the interest conveyed is of the nature of real.
W. The duties of a register of deeds in respect to the registration of chattel mortgage are of a purely ministerial character. Registration adds nothing to the instrument. the mortgagor hereby conveys and transfer to the mortgage. of chattel mortgage. and now in possession of the mortgagor. The point submitted to us in this case was determined on September 8. L-40411 August 7. We accordingly quote therefrom as follows: It is unnecessary here to determine whether or not the property described in the document in question is real or personal. His duties in respect to such instruments are ministerial only. G. now a Justice of this Court. and as a consequence absolved the defendants from the complaint. 1914. vs. but this is a question to be determined by the courts of justice and not by the register of deeds. property of the mortgagor. in which the proper classification of one thing or another as real or personal property may be said to be doubtful.. 1508). within the meaning of the Chattel Mortgage Law. to wit: (1) All of the right." as the term is used in Spanish law. involves the determination of the nature of the properties described in the complaint. with costs against the plaintiff. Upon examination of the instrument. 644).
 and Williamson (37 Phil. his Honor continued: Based principally upon the provisions of section quoted the Attorney-General of the Philippine Islands. which has reference to the function of the register of deeds in placing the document on record. the placing of the document on record in the chattel mortgage register is a futile act. as announced in the opening sentence of the decision in the trial court and as set forth by counsel for the parties on appeal.. We are of the opinion that the position taken by the respondent is untenable.
 Palma Gil and Pablo Lorenzo and Delfin Joven for appellant. and we declare it to be the duty of the register of deeds to accept the estimate placed upon the document by the petitioner and to register it. On the land the sawmill company erected a building which housed the machinery used by it. 2496.
 Strong Machinery Co. by way of mortgage. Inc. but it must not be forgotten that under given conditions property may have character different from that imputed to it in said articles. in an administrative ruling promulgated by the Honorable James A. It is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. The Davao Saw Mill Co. Then. and in and to the premises the subject of the said lease.: The issue in this case... and the legal effects of the contract must be discovered in the instrument itself in relation with the fact of notice. Ostrand. There is nothing in any of these provisions conferring upon the register of deeds any authority whatever in respect to the "qualification. Of course. but without costs.. property. The trial judge found that those properties were personal in nature. INC. held that a register of deeds has no authority to pass upon the capacity of the parties to a chattel mortgage which is presented to him for record. Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating between real property and personal property for purpose of the application of the Chattel Mortgage Law. barrio of Tigatu.. municipality of Davao. defendantsappellees. In Leung Yee vs. In the light of what has been said it becomes unnecessary for us to pass upon the point whether the interests conveyed in the instrument now in question are real or personal. the discussion may be confined to the point as to whether a register of deeds has authority to deny the registration of a document purporting to be a chattel mortgage and executed in the manner and form prescribed by the Chattel Mortgage Law.Now. the following described personal property. and registration was refused on this ground only. Province of Davao. the respondent was of the opinion that it was not a chattel mortgage. the land upon which the business was conducted belonged to another person. in an opinion dated August 11. situated in the City of Manila. and little of value can be here added to the observations contained in said ruling. and interest of the mortgagor in and to the contract of lease hereinabove referred to. the respondent shall interpose a sufficient answer to the petition. as prayed. but these have been transferred to section 198 of the Administrative Code.
 MALCOLM. J. upon payment of the proper fee. considered as a general doctrine. So ordered. A fortiori a register of deeds can have no authority to pass upon the character of the property sought to be encumbered by a chattel mortgage. as amended by Act No. the conflict concerning machines which were placed and mounted on foundations of cement. 1909. 1508). the writ of mandamus will be issued.
 Frank L. if the mortgaged property is real instead of personal the chattel mortgage would no doubt be held ineffective as against third parties. as register of deeds of the City of Manila. also.

and the properties now in question were levied upon as personalty by the sheriff. Code Napoleon under articles 522 et seq. . 2. it was held that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant. Laurent. 12. and the defendant herein having consummated the sale. CITY ASSESSOR and CITY TREASURER OF QUEZON CITY. the judgment appealed from will be affirmed. proceeded to take possession of the machinery and other properties described in the corresponding certificates of sale executed in its favor by the sheriff of Davao. since as to him the property was a part of the realty which. p. Appellant emphasizes the first paragraph. but intended by a lessee for use in a building erected on the land by the latter to be returned to the lessee on the expiration or abandonment of the lease. the costs of this instance to be paid by the appellant. instruments or implements intended by the owner of the tenements for the industrial or works that they may carry on in any building or upon any land and which tend directly to meet the needs of the said industry or works. personal property. It is machinery which is involved. however not necessary to spend overly must time in the resolution of this appeal on side issues.) The distinction rests. (Demolombe. though in themselves movable. It is. paragraphs 1 and 5. Central Altagracia [192]. the characterization of the property as chattels by the appellant is indicative of intention and impresses upon the property the character determined by the parties. that is. 1964 BOARD OF ASSESSMENT APPEALS. moreover. No. Following the Code Napoleon.. that is. and it was expressly stipulated that the machinery so put in should become a part of the plant belonging to the owner without compensation to the lessee. 630). is in point. But in the concrete immobilization took place because of the express provisions of the lease under which the Altagracia held. Article 334. Mill Co. that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant. both under the provisions of the Porto Rican Law and of the Code Napoleon. A similar question arose in Puerto Rico. may be immobilized.. which was the plaintiff in that action. movable property. whether obiter dicta or not. was the plaintiff and the Davao. Under such conditions the tenant in putting in the machinery was acting but as the agent of the owner in compliance with the obligations resting upon him. Land. Section 164. Machinery. it was in part said: To determine this question involves fixing the nature and character of the property from the point of view of the rights of Valdes and its nature and character from the point of view of Nevers & Callaghan as a judgment creditor of the Altagracia Company and the rights derived by them from the execution levied on the machinery placed by the corporation in the plant. as the result of his obligations under the lease. unless such person acted as the agent of the owner. Tit. the improvements and buildings shall likewise pass to the ownership of the party of the first part as though the time agreed upon had expired: Provided. 518 et seq. As connecting up with the facts. it follows that they had the right to levy on it under the execution upon the judgment in their favor. We entertain no doubt that the trial judge and appellees are right in their appreciation of the legal doctrines flowing from the facts." says section 334 of the Porto Rican Code. "may be immovable either by their own nature or by their destination or the object to which they are applicable. "Things. as regards Nevers & Callaghan. but not when so placed by a tenant.. No. Tit. It follows that abstractly speaking the machinery put by the Altagracia Company in the plant belonging to Sanchez did not lose its character of movable property and become immovable by destination.R. No. Inc. the Porto Rican Code treats as immovable (real) property. however. as pointed out by Demolombe. G. Inc..) Finding no reversible error in the record. In the first place. real property consists of — 1. a judgment was rendered in favor of the plaintiff in that action against the defendant in that action. proceed separately against. and decisions quoted in Fuzier-Herman ed. Tit. deprived the tenant of any right to charge against the lessor the cost such machinery. a usufructuary. L-15334 January 31. was the defendant. and the exercise of that right did not in a legal sense conflict with the claim of Valdes. to and inclusive of article 534. 44 Phil. a writ of execution issued thereon. petitioners. whose knowledge of the Civil Law is well known. Such result would not be accomplished. 58. and appellees the last mentioned paragraph. 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. roads and constructions of all kinds adhering to the soil. 9. Indeed the bidder. According to the Code. 5. Jaramillo ( [1923]. furnishes the key to such a situation. being. which is as follows: "Machinery. articles 516... therefore. wherein the Davao Light & Power Co.. MANILA ELECTRIC COMPANY. he could not. Aubry et Rau. it should further be explained that the Davao Saw Mill Co. recapitulating the things which. vs. it must again be pointed out that the appellant should have registered its protest before or at the time of the sale of this property. 447. respondent. No third party claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein. 203. xxx xxx xxx The machinery levied upon by Nevers & Callaghan. because of the destination to which it is applied. that which was placed in the plant by the Altagracia Company. not only land and buildings. since the lease in substance required the putting in of improved machinery. but also attributes immovability in some cases to property of a movable nature. vessels. for the purpose of collecting his debt." (See also Code Nap. has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons.) So far as the subject-matter with which we are dealing — machinery placed in the plant — it is plain. upon the fact that one only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to deprive him of it by causing it by an act of immobilization to become the property of another. It must further be pointed out that while not conclusive. In another action. That the machineries and accessories are not included in the improvements which will pass to the party of the first part on the expiration or abandonment of the land leased. In the opinion written by Chief Justice White. by the placing of machinery in a plant by a tenant or a usufructuary or any person having only a temporary right. Saw.the second part should leave or abandon the land leased before the time herein stipulated.. machinery not intended by the owner of any building or land for use in connection therewith. Inc.. In this connection the decision of this court in the case of Standard Oil Co. (Valdes vs. 225 U. buildings. of New York vs. and the immobilization of the machinery which resulted arose in legal effect from the act of the owner in giving by contract a permanent destination to the machinery.S. One of such persons is the appellee by assignment from the original mortgages." Numerous illustrations are given in the fifth subdivision of section 335. or any person having only a temporary right. and on appeal being taken to the United States Supreme Court. liquid containers. xxx xxx xxx 5. of the Civil Code.

with an opening of about one (1) meter in diameter. These are assigned as errors by the petitioner in the brief. specifically a vessel's master (Webster's New International Dictionary 2nd Ed. and insulators). which. an appeal was taken by respondent to the Board of Assessment Appeals of Quezon City. and poles of the PLDT Co. (Meralco for short). earnings. and filed a petition for review in the Court of Tax Appeals (CTA for short) which rendered a decision on December 29. The findings were as follows: the ground around one of the four posts was excavated to a depth of about eight (8) feet. on land owned by the petitioner approximate more than one kilometer from the first tower. In accordance with the definitions. (Par. Like the two previous ones. as electric poles. and insulators of the grantee from which taxes and assessments the grantee is hereby expressly exempted. the instant petition for review was filed. Quezon City. 1955. Several courts of last resort in the United States have called these steel supports "steel towers". franchise. In upholding the cause of respondents. España Extension. As in the first two towers given above. The tax exemption privilege of the petitioner is quoted hereunder: PAR 9. Act No.86. so that by unscrewing the bolts. It was also found that the square metal frame supporting the legs were not attached to any material or foundation. nor the material or form of which it is made. on land belonging to it. After denying respondent's petition to cancel these declarations. The third tower examined is located along Kamias Road. Laguna and is transmitted to the City of Manila by means of electric transmission wires. in the City of Manila. machinery and personal property as other persons are or may be hereafter required by law to pay . . J. and the necessary carrying of numerous wires and the distance between . 1958. emphasis supplied. These electric transmission wires which carry high voltage current. transformers. buildings.) The word "pole" means "a long. Three steel towers were inspected by the lower court and parties and the following were the descriptions given there of by said court: The first steel tower is located in South Tatalon. wires. plant (not including poles. became the transferee and owner of the franchise.. and shall be in lieu of all taxes and assessments of whatsoever nature and by whatsoever authority upon the privileges. the ground around one of the four legs was excavate from seven to eight (8) feet deep and one and a half (1-½) meters wide. running from the province of Laguna to the said City. the CTA held that: (1) the steel towers come within the term "poles" which are declared exempt from taxes under part II paragraph 9 of respondent's franchise. it could not be determined with certainty to whether said adobe stone was placed purposely or not.. in which the law provided that wires shall be constructed upon suitable poles. Like the first one. decreased to about a quarter of a meter as it we deeper until it reached the bottom of the post. may be seen cylindrical metal poles. and poles. that the concept of the "poles" for which exemption is granted. this term was construed to mean either wood or metal poles and in view of the land being subject to overflow. there was no concrete foundation but there was adobe stone underneath. it was seen that there was no concrete foundation. on April 22. telegraph poles. Quezon City. the bottom arrangement of the legs thereof were found to be resting on soft adobe. heat and power system in the City of Manila and its suburbs to the person or persons making the most favorable bid. wires. p. the ground around the two legs of the third tower was excavated to a depth about two or three inches beyond the outside level of the steel bar foundation. and the tower carried five high voltage wires without cover or any insulating materials. the tower proper was attached to the leg three bolts. as typically the stem of a small tree stripped of its branches. Respondent Manila Electric Co. 1907. and (3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid.
Ross. as the bottom of the excavation was covered with water about three inches high. Swift was awarded the said franchise on March 1903. the Philippine Commission enacted Act No. Said percentage shall be due and payable at the time stated in paragraph nineteen of Part One hereof. There being very little water at the bottom. a similar typically cylindrical piece or object of metal or the like". but includes "upright standards to the top of which something is affixed or by which something is supported. probably due to high humidity. 1903.. also by extension. As heretofore described. The term also refers to "an upright standard to the top of which something is affixed or by which something is supported. but there soft adobe beneath. respondent's steel supports consists of a framework of four steel bars or strips which are bound by steel cross-arms atop of which are cross-arms supporting five high voltage transmission wires (See Annex A) and their sole function is to support or carry such wires. Quezon City. The grantee shall be liable to pay the same taxes upon its real estate. are fastened to insulators attached on steel towers constructed by respondent at intervals. from its hydro-electric plant in the province of Laguna to the City of Manila. the terms and conditions of which were embodied in Ordinance No. The motion for reconsideration having been denied.Assistant City Attorney Jaime R. 31992 and 15549. above quoted.86 as real property tax on the said steel towers for the years 1952 to 1956. It was found that there was no concrete foundation. 1959.: From the stipulation of facts and evidence adduced during the hearing. petitioner City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax declaration Nos. Charles M. looks like mud or clay. at the bottom of the post were two parallel steel bars attached to the leg means of bolts.651. The leg was likewise provided with two parallel steel bars bolted to a square metal frame also bolted to each corner. as a dovecote set on a pole. K-F. maintain and operate an electric street railway and electric light. It must be noted from paragraph 9.) Along the streets.
 PAREDES. with two cross metals to prevent mobility. the tower could be dismantled and reassembled. sometimes. 1902. Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls. In a proceeding to condemn land for the use of electric power wires. As in the first tower. They are called "poles" notwithstanding the fact that they are no made of wood. The conclusion of the CTA that the steel supports in question are embraced in the term "poles" is not a novelty. which required respondent to pay the amount of P11. transformers. On November 15. 9. The second tower inspected was located in Kamuning Road.651. comparatively slender usually cylindrical piece of wood or timber. The respondent Meralco has constructed 40 of these steel towers within Quezon City. pole is not restricted to a long cylindrical piece of wood or metal. Respondent paid the amount under protest.. marked Annex A. nor by the character of the electric current it carries. cubical concrete poles. as the place abounds with this kind of stone. (2) the steel towers are personal properties and are not subject to real property tax. the second tower is made up of metal rods joined together by means of bolts. Part Two. which are made of two steel bars joined together by an interlacing metal rod. the following appear: On October 20. a tent pole. but the use to which they are dedicated.
 Agloro for petitioners.. 44 approved on March 24. In their decisions the words "towers" and "poles" were used interchangeably. A photograph of one of these steel towers is attached to the petition for review. ordering the cancellation of the said tax declarations and the petitioner City Treasurer of Quezon City to refund to the respondent the sum of P11. and they denominated these supports or towers. income. 484 which authorized the Municipal Board of Manila to grant a franchise to construct. is not determined by their place or location. Selph and Carrascoso for respondent. and it is well understood in that jurisdiction that a transmission tower or pole means the same thing. 484 Respondent's Franchise.

Oxford. should be understood and taken as a part of the electric power system of the respondent Meralco.
 (collaborating counsel) for petitioner. It was held that in defining the word pole. receptacles. setting aside certain Orders later specified herein.
 Jose V. then one should admit that the Philippines is one century behind the age of space. they are like the steel towers in question. it was he (City Treasurer) whom had insisted that respondent herein pay the real estate taxes. To secure the collection of the receivables assigned. xxx xxx xxx (3) Everything attached to an immovable in a fixed manner. instruments or implements. Loreto C. do not come within the objects mentioned in paragraph 1.R. they are removable and merely attached to a square metal frame by means of bolts. as they are not attached to an immovable in a fixed manner. for factually. the top of which extends above the surface of the soil in the tower of Oxford. No. any continuous series of structures intended and used solely or primarily for the purpose of supporting wires carrying electric currents is a pole line (Inspiration Consolidation Cooper Co.
 Mancella for respondent. 1981 in CA-G. and. despite the fact that Quezon City is not a party to the case. v. vs. but Quezon City. but Article 415 of the Civil Code does. can better effectuate the purpose for which the respondent's franchise was granted. and constructions of all kinds adhered to the soil. J. If the respondent would be required to employ "wooden poles". private respondent executed a Chattel Mortgage over certain raw . notwithstanding its capacity to sue and be sued. 383. and other equipment capable of carrying wires for the transmission of electric power (Connecticut Light and Power Co. receptacles. p. 224. that the word "poles". it cannot be properly raised for the first time on appeal. which can be disassembled by unscrewing the bolts and reassembled by screwing the same. therefore. arms. one should not be governed by the wire or material of the support used.651. These steel towers or supports do not also fall under paragraph 5. 484 and incorporated in the petitioner's franchise. In form and structure. 36040. and they can be separated without breaking the material or causing deterioration upon the object to which they are attached.R. SP12731. Having acted in his official capacity as City Treasurer of Quezon City. No. and that regardless of the size or material wire of its individual members. but was considering the danger from any elevated wire carrying electric current. The steel supports or towers were made of iron or other metals consisting of two pieces running from the ground up some thirty feet high. 8 P. with costs against the petitioners. and which tends directly to meet the needs of the said industry or works. The tax law does not provide for a definition of real property. L-58469 May 16. denying petitioner's motion for reconsideration. v. in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object. for obvious reasons. 1). It appears that in order to obtain financial accommodations from herein petitioner Makati Leasing and Finance Corporation. WEAREVER TEXTILE MILLS. constructed for the purpose of fastening high voltage and dangerous electric wires alongside public highways. 126 Atl. 1016).86. 222. of Judge Ricardo J. and are embedded in the cement foundations sunk in the earth. They can not be included under paragraph 3.) The term "poles" was used to denote the steel towers of an electric company engaged in the generation of hydro-electric power generated from its plant to the Tower of Oxford and City of Waterbury. (Stemmons and Dallas Light Co. Inc. joined together by means of bolts.poles. It is evident. In a case. (Tex) 212 S. and even if they were. discounted and assigned several receivables with the former under a Receivable Purchase Agreement.) The term "poles" was also used to denominate the steel supports or towers used by an association used to convey its electric power furnished to subscribers and members. which respondent paid under protest. or "rounded poles" as it used to do fifty years back. under the circumstances. being wider at the bottom than at the top. as to defeat the very object for which the franchise was granted.. which when unscrewed could easily be dismantled and moved from place to place.
 Ramon D. respondents. for the conveyance of electric current from the source thereof to its consumers. 101 Conn. xxx xxx xxx The steel towers or supports in question. and HONORABLE COURT OF APPEALS. p. so that they can be subject to a real property tax.
 DE CASTRO. but claimed that the steel towers on which it is carried were so large that their wire took their structure out of the definition of a pole line. 1981 of the said appellate court. by stating the following are immovable property: (1) Land.
 Bagatsing & Assoc. INC. Compton. 32-A Words and Phrases. they are not intended for industry or works on the land. instruments or implements intended by the owner of the tenement for an industry or works which may be carried in a building or on a piece of land. The poles as contemplated thereon. This question has not been raised in the court below. They are not construction analogous to buildings nor adhering to the soil. the private respondent Wearever Textile Mills. It is argued that as the City Treasurer is not the real party in interest. (Salt River Valley Users' Ass'n v. These steel towers are about 15 feet square at the base and extended to a height of about 35 feet to a point. as wen as the resolution dated September 22. G. Francisco. should not be given a restrictive and narrow interpretation.: Petition for review on certiorari of the decision of the Court of Appeals (now Intermediate Appellate Court) promulgated on August 27. as used in Act No. Bryan 252 P. the statute was interpreted to include towers or poles. It should also be conceded by now that steel towers. which was not a party to the suit. 249-250. It is finally contended that the CTA erred in ordering the City Treasurer of Quezon City to refund the sum of P11. IN VIEW HEREOF. the defendant admitted that the structure on which a certain person met his death was built for the purpose of supporting a transmission wire used for carrying high-tension electric power. Petitioner is not engaged in an industry or works in the land in which the steel supports or towers are constructed. roads. because they do not constitute buildings or constructions adhered to the soil.W. he should not be ordered to effect the refund. given by the lower court. he would surely know what to do. issued in Civil Case No. 2nd. therefore. The herein petitioner is indulging in legal technicalities and niceties which do not help him any. 365. for they are not machineries. like the ones in question. Each of these steel towers or supports consists of steel bars or metal strips. xxx xxx xxx (5) Machinery.. and to the towers are attached insulators. Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles. as Presiding Judge of the Court of First instance of Rizal Branch VI. petitioner. buildings. the logical question posited is whether they constitute real properties. 1983 MAKATI LEASING and FINANCE CORPORATION. the decision appealed from is hereby affirmed. the said two metal pieces being connected with criss-cross iron running from the bottom to the top. constructed like ladders and loaded with high voltage electricity.
 Baduan for petitioner. As per description.

Reyes. and was sustained by the appellate court. or annullable pursuant to Article 1390 of the new Civil Code. even granting that the charge is true. Jr. Inc. As stated in Standard Oil Co. Acting on petitioner's application for replevin. unlike in the Iya cases. much less of a chattel mortgage. such fact alone does not render a contract void ab initio. as pointed out by petitioner and again not refuted by respondent. the contention of private respondent that this petition has been mooted by such return may not be sustained. Moreover.
 F. wherein third persons assailed the validity of the chattel mortgage. It must be pointed out that the characterization of the subject machinery as chattel by the private respondent is indicative of intention and impresses upon the property the character determined by the parties. the sheriff enforcing the seizure order. or at least. In rejecting petitioner's assertion on the applicability of the Tumalad doctrine. On the other hand. the subject house stood on a rented lot to which defendants-appellants merely had a temporary right as lessee. there is absolutely no reason why a machinery. be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom. like what was involved in the above Tumalad case.
 CA. As aptly pointed out by petitioner and not denied by the respondent. set aside the Orders of the lower court and ordered the return of the drive motor seized by the sheriff pursuant to said Orders. with petitioner arguing that it is a personality. When petitioner returned the subject motor drive.
 v. and although this can not in itself alone determine the status of the property. Lopez vs. having treated the subject house as personality. Inc. Petitioner thereafter filed a complaint for judicial foreclosure with the Court of First Instance of Rizal. repaired to the premises of private respondent and removed the main drive motor of the subject machinery. the same being attached to the ground by means of bolts and the only way to remove it from respondent's plant would be to drill out or destroy the concrete floor. 630. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. the reason why all that the sheriff could do to enfore the writ was to take the main drive motor of said machinery. while the respondent claiming the contrary. It is contended by private respondent. After several incidents. petitioner filed a petition for extrajudicial foreclosure of the properties mortgage to it. the present case from the application of the abovequoted pronouncement. the error of the appellate court in ruling that the questioned machinery is real. however. 1981. as contended by said respondent. yet by ceding. The appellate court rejected petitioner's argument that private respondent is estopped from claiming that the machine is real property by constituting a chattel mortgage thereon. Finally. it made itself unequivocably clear that said action was without prejudice to a motion for reconsideration of the Court of Appeals decision. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. 96 Phil. as shown by the receipt duly signed by respondent's representative. who are attacking the validity of the chattel mortgage in this case. the Court of Appeals lays stress on the fact that the house involved therein was built on a land that did not belong to the owner of such house. Equity dictates that one should not benefit at the expense of another. that the instant petition was rendered moot and academic by petitioner's act of returning the subject motor drive of respondent's machinery after the Court of Appeals' decision was promulgated. the Deputy Sheriff assigned to implement the foreclosure failed to gain entry into private respondent's premises and was not able to effect the seizure of the aforedescribed machinery. particularly the mortgagors. becomes very apparent. it does so when combined with other factors to sustain the interpretation that the parties. the lower court issued a writ of seizure. Neither is it disclosed that steps were taken to nullify the same.
L. docketed as Civil Case No.
 of New York v. Examining the records of the instant case. 44 Phil. On July 13.
 & Plaza Theatre. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. the latter has indubitably benefited from said contract.materials inventory as well as a machinery described as an Artos Aero Dryer Stentering Range. as debtors-mortgagors. We find no logical justification to exclude the rule out. 1 Considering that petitioner has reserved its right to question the propriety of the Court of Appeals' decision. Upon private respondent's default. the case of Machinery and Engineering Supplies. ruled: Although there is no specific statement referring to the subject house as personal property. which is movable in its nature and becomes immobilized only by destination or purpose.
 Orosa. the lower court finally issued on February 11. it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property. 36040. speaking through Justice J. The doctrine of estoppel therefore applies to the herein defendants-appellants. But the law makes no distinction with respect to the ownership of the land on which the house is built and We should not lay down distinctions not contemplated by law. by a proper action in court. and they were not the subject of a Chattel Mortgage. in certiorari and prohibition proceedings subsequently filed by herein private respondent. If a house of strong materials. The next and the more crucial question to be resolved in this Petition is whether the machinery in suit is real or personal property from the point of view of the parties. . Private respondent could not now therefore. 1981. However. because it is a real property pursuant to Article 415 of the new Civil Code.
 Vicencio. 70. the nature of the machinery and equipment involved therein as real properties never having been disputed nor in issue. as the appellate court did. The contention of private respondent is without merit. A motion for reconsideration of this decision of the Court of Appeals having been denied. This contention lacks persuasiveness. The lower court reaffirmed its stand upon private respondent's filing of a further motion for reconsideration. the enforcement of which was however subsequently restrained upon private respondent's filing of a motion for reconsideration. petitioner has brought the case to this Court for review by writ of certiorari. Moreover. Private respondent contends that estoppel cannot apply against it because it had never represented nor agreed that the machinery in suit be considered as personal property but was merely required and dictated on by herein petitioner to sign a printed form of chattel mortgage which was in a blank form at the time of signing. intended to treat the same as such. if not Identical issue was raised in Tumalad v. There is nothing on record to show that the mortgage has been annulled. which accordingly held that the chattel mortgage constituted thereon is null and void. it is the defendants-appellants themselves. A similar.L. as long as no interest of third parties would be prejudiced thereby. the case before the lower court.
 & Leung Yee vs. not personal property. 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. but can only be a ground for rendering said contract voidable.B. intended to treat the house as personality. heavily relied upon by said court is not applicable to the case at bar.
 Strong Machinery & Williamson. The Court of Appeals. From what has been said above. an order lifting the restraining order for the enforcement of the writ of seizure and an order to break open the premises of private respondent to enforce said writ. Moreover. Branch VI. 41 SCRA 143 where this Court. the status of the subject machinery as movable or immovable was never placed in issue before the lower court and the Court of Appeals except in a supplemental memorandum in support of the petition filed in the appellate court.
 Jaramillo. may not be likewise treated as such. after ruling that the machinery in suit cannot be the subject of replevin.

marked Annex "G". a repair shop. and 4. nor to repair machineries. the questioned decision and resolution of the Court of Appeals are hereby reversed and set aside. petitioner brought the case to this Court assigning the following errors: 1. 521. J. 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 or industry. vs. marked Annex "C". It maintains Branch Offices and/or stations at Iligan City. The Tax Court erred in denying petitioner's motion for reconsideration. and same are repaired in a condition to be serviceable in the TPU land transportation business it operates. Davao City and Kibawe. converted them into real property by reason of their purpose. without them the sugar central would be unable to function or carry on the industrial purpose for which it was established.
 Sabellina for respondents. 415. the Tumalad case bears more nearly perfect parity with the instant case to be the more controlling jurisprudential authority. marked Annex "B". 2. That these machineries are sitting on cement or wooden platforms as may be seen in the attached photographs which form part of this agreed stipulation of facts. those movable which become immobilized by destination because they are essential and principal elements in the industry for those which may not be so considered immobilized because they are merely incidental. parts and the like offered to the general public indiscriminately for business or commercial purposes for which petitioner has never engaged in. appearing in the attached photograph. to date. 3. 5. marked Annex "E". body constructed. SO ORDERED. are immobilized by destination. In the Court of Tax Appeals the parties submitted the following stipulation of facts: Petitioner and respondents. respondents. Lanao. (Emphasis ours. the necessary machinery and equipment installed for carrying on the sugar industry for which it has been established must necessarily be permanent. appearing in the attached photograph. 415). tho movable. The Honorable Court of Tax Appeals erred in upholding respondents' contention that the questioned assessments are valid. (b) Storm Boring Machine. appearing in the attached photograph. over its authorized lines in the Island of Mindanao. liquid containers.) So that 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. Binamira. Respondents contend that said equipments. 4. marked Annex "D". by reason of their being intended or destined for use in an industry. THE CITY ASSESSOR & TREASURER and the BOARD OF TAX APPEALS of Cagayan de Oro City. — The following are immovable properties: xxx xxx xxx (5) Machinery. (f) Battery charger (Tungar charge machine) appearing in the attached photograph. gives the character of real property to "machinery. (Emphasis ours.T. Case No. . WHEREFORE. Zamboanga del Sur. That these machineries have never been or were never used as industrial equipments to produce finished products for sale. and that said tools. therefore. In the case of B. Thus.: This is a petition for the review of the decision of the Court of Tax Appeals in C. 3. That petitioner has its main office and shop at Cagayan de Oro City.A.. in accordance with paragraph 5 of Article 415 of the New Civil Code which provides: Art.
 LABRADOR. 61 Phil.Undoubtedly. appearing in the attached photograph.1awphîl. Inasmuch as the central is permanent in character. and which tend directly to meet the needs of the said industry or works. That the machineries sought to be assessed by the respondent as real properties are the following: (a) Hobart Electric Welder Machine. 710 holding that the petitioner Mindanao Bus Company is liable to the payment of the realty tax on its maintenance and repair equipment hereunder referred to. Bukidnon Province.
 Berkenkotter vs. paragraph (c) of Republic Act No. appearing in the attached photograph. 1962 MINDANAO BUS COMPANY.
 Cu Unjieng. Pagadian. The Court of Tax Appeals erred in denying petitioner's contention that the respondent City Assessor's power to assess and levy real estate taxes on machineries is further restricted by section 31. The Board of Tax Appeals of the City sustained the city assessor. collecting rates approved by the Public Service Commission. The Tax Court erred in its interpretation of paragraph 5 of Article 415 of the New Civil Code." If the installation of the machinery and equipment in question in the central of the Mabalacat Sugar Co. with costs against the private respondent. That petitioner is a public utility solely engaged in transporting passengers and cargoes by motor trucks.) Note that the stipulation expressly states that the equipment are placed on wooden or cement platforms. as essential and principle elements of a sugar central. thru their respective counsels agreed to the following stipulation of facts: 1. 2. 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.400 petitioner's above-mentioned equipment. (d) Black and Decker Grinder. appearing in the attached photograph. it cannot be said that their incorporation therewith was not permanent in character because. so petitioner herein filed with the Court of Tax Appeals a petition for the review of the assessment. petitioner. for its sugar and industry. and having denied a motion for reconsideration.. Petitioner appealed the assessment to the respondent Board of Tax Appeals on the ground that the same are not realty. and the Orders of the lower court are hereby reinstated. (e) PEMCO Hydraulic Press. Respondent City Assessor of Cagayan de Oro City assessed at P4.
Vicente E. They can be moved around and about in petitioner's repair shop. the Supreme Court said: Article 344 (Now Art. receptacles. marked Annex "A".
 H. 663. L-17870 September 29. in lieu of the other of less capacity existing therein. its TPU trucks are made. Inc. 6. not essential and principal.R. and (g) D-Engine Waukesha-M-Fuel. Barria and Irabagon for petitioner. blacksmith and carpentry shops. paragraph (5) of the Civil Code.
nèt The Court of Tax Appeals having sustained the respondent city assessor's ruling. marked Annex "F". G." We may here distinguish. No. (c) Lathe machine with motor. and holding that pursuant thereto the movable equipments are taxable realties. That petitioner is the owner of the land where it maintains and operates a garage for its TPU motor trucks. equipments or machineries are immovable taxable real properties. and with these machineries which are placed therein.

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. are merely incidentals and are not and should not be considered immobilized by destination. gasoline pumps. is dug deep about six feet more or less. car washer. This is done to prevent conflagration because gasoline and other combustible oil are very inflammable. 58-60. IBM machines. The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. and petitioner's business is not carried on in a building. its business may be carried on. not essential and principle municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks. L-50466 May 31.R. and to consider only the building as the service station is grossly erroneous. The footing of the pump is a cement pad and this cement pad is imbedded in the pavement under the shed. receptacles. an air compressor is attached in the wall of the shed or at the concrete wall fence. 52. The lessor of the land. This underground tank is connected with a steel pipe to the gasoline pump and the gasoline pump is commonly placed or constructed under the shed. the underground gasoline tank. G. elevated water tanks. so said equipment may not be considered real estate within the meaning of Article 415 (c) of the Civil Code. WHEREFORE. concrete fence and pavement and the lot where they are all placed or erected. and which tend directly to meet the needs of the said industry or works. and evidence that the gasoline underground tank is attached and connected to the shed or building through the pipe to the pump and the pump is attached and affixed to the cement pad and pavement covered by the roof of the building or shed. But in the case at bar the equipments in question are destined only to repair or service the transportation business. truck hoists. it is clear they are. which are incidentals. are immobilized because they are essential to said industries.. 1982 CALTEX (PHILIPPINES) INC. elevated tank. Airline companies use forklifts. etc. Acting Secretary of Justice Catalino Macaraig. jeepwagons. etc. (pp. therefore. for the tenement we consider in this particular case are (is) the pavement covering the entire lot which was constructed by the owner of the gasoline station and the improvement which holds all the properties under question. The following are immovable property: xxx xxx xxx (5) Machinery. theaters. The controversial underground tank. The city assessor described the said equipment and machinery in this manner: A gasoline service station is a piece of lot where a building or shed is erected. depository of gasoline or crude oil.cash registers. The underground gasoline tank is attached to the shed by the steel pipe to the pump. The pavement covering the entire lot of the gasoline service station. J. car hoists. upon demand. air compressors and tireflators. It is stipulated in the lease contract that the operators. The Board. Rollo). the "machinery.. which was composed of Secretary of Finance Cesar Virata as chairman. The building or shed. we hold that the equipments in question are not absolutely essential to the petitioner's transportation business. The machines and equipment consists of underground tanks. neon lights signboard. Resuming what we have set forth above. ordinary wear and tear excepted. without such equipments. in its gas stations located on leased land. though movable in nature. so with the water tank it is connected also by a steel pipe to the pavement.. Similarly. 464. a water tank if there is any is placed in one corner of the lot. where the gas station is located. 415. The realty tax on said equipment amounts to P4. The city board of tax appeals ruled that they are personalty. they are attached and affixed to the pavement and to the improvement. shall return to Caltex the machines and equipment in good condition as when received. and Secretary of Local Government and Community Development Jose Roño. then to the electric motor which electric motor is placed under the shed. tenement or on a specified land. Without costs. all of them used in the pursuance of the gasoline service station business formed the entire gasoline service-station. 1977 that the said machines and equipment are real property within the meaning of sections 3(k) & (m) and 38 of the Real Property Tax Code. not essentials.: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. typewriters. which took . pressure pumps.10 annually (p. the air compressor. A sawmill would also be installed in a building on land more or less permanently. as petitioner has carried on. and the sawing is conducted in the land or building. liquid containers. as demanded by the law. restaurants. Even without such tools and equipments. Rollo). The assessor appealed to the Central Board of Assessment Appeals. CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY. the elevated water tank. So ordered. which is not carried on in a building or permanently on a piece of land. They are merely incidentals — acquired as movables and used only for expediency to facilitate and/or improve its service. usually found and used in hotels. water pumps and underground tanks are outside of the service station. Said equipments may not.) Aside from the element of essentiality the above-quoted provision also requires that the industry or works be carried on in a building or on a piece of land. The said machines and equipment are loaned by Caltex to gas station operators under an appropriate lease agreement or receipt. the car hoist under a separate shed. The law that governs the determination of the question at issue is as follows: Art. but the delivery trucks and adding machines which they usually own and use and are found within their industrial compounds are merely incidental and retain their movable nature. As to whether the subject properties are attached and affixed to the tenement. Presidential Decree No. equipments and apparatus are allowed by Caltex (Philippines) Inc. machines. petitioner. AQUINO. held in its decision of June 3. as well as all the improvements. On the other hand. supra. for these businesses can continue or carry on their functions without these equity comments. and instruments or implements" are found in a building constructed on the land. vs. the tools and equipments in question in this instant case are.. Caltex retains the ownership thereof during the term of the lease. Thus in the case of Berkenkotter vs. by their nature. (Civil Code of the Phil. car hoists are placed in an adjacent shed. be deemed real property. does not become the owner of the machines and equipment installed therein. computing pumps. So to say that the gasoline pumps. respondents.
 Cu Unjieng. water pumps. a few meters away from the shed. before the war. and thus retain their movable nature. machineries of breweries used in the manufacture of liquor and soft drinks. No. Jr. etc. the decision subject of the petition for review is hereby set aside and the equipment in question declared not subject to assessment as real estate for the purposes of the real estate tax. 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. .541. water tanks.

The issue is whether the pieces of gas station equipment and machinery already enumerated are subject to realty tax. machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. In the Davao Saw Mills case the question was whether the machinery mounted on foundations of cement and installed by the lessee on leased land should be regarded as real property for purposes of execution of a judgment against the lessee. including land. assessed and collected in all provinces. Court of Appeals. This Court sustained the sheriff's action. 137705 August 22. Rollo). PCI LEASING AND FINANCE. instruments. No costs. 1978. We hold that the said equipment and machinery. are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. The decision was reiterated by the Board (Minister Vicente Abad Santos took Macaraig's place) in its resolution of January 12. The Central Board of Assessment Appeals did not commit a grave abuse of discretion in upholding the city assessor's is imposition of the realty tax on Caltex's gas station and equipment. Inc. The petition for certiorari is dismissed for lack of merit. vs. and SERGIO T. therefore. This provision is reproduced with some modification in the Real Property Tax Code which provides: SEC. INC. vs. 16. Caltex invokes the rule that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant but not when so placed by a tenant.: After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable. Manila Electric Co. cities and municipalities an annual ad valorem tax on real property. mechanical contrivances. On May 2. DECISION PANGANIBAN. machinery. 70. unless such person acted as the agent of the owner (Davao Saw Mill Co. This issue has to be resolved primarily under the provisions of the Assessment Law and the Real Property Tax Code. 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. as well as the installations and appurtenant service facilities. the only remedy available for seeking a review by this Court of the decision of the Central Board of Assessment Appeals is the special civil action of certiorari. Consequently.R. When Republic act No. G. together with all other equipment designed for or essential to its manufacturing. J. 1974. beauty or utility or to adapt it for new or further purposes. the questioned decision and resolution of the Central Board of Assessment Appeals are affirmed. This case is also easily distinguishable from Board of Assessment Appeals vs. No. respondent. vs. Jaramillo. Within that fifteen-day period. The steel towers were considered personalty because they were attached to square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled. petitioners. This question is different from the issue raised in the Davao Saw Mill case. Incidence of Real Property Tax. buildings. INC. 633).
 The sheriff treated the machinery as personal property. the recourse resorted to herein by Caltex (Philippines). of New York vs. a copy of which was received by its lawyer on April 2. "It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property" (Standard Oil Co. there was as yet no Central Board of Assessment Appeals. costing labor or capital and intended to enhance its value. Nor are Caltex's gas station equipment and machinery the same as tools and equipment in the repair shop of a bus company which were held to be personal property not subject to realty tax (Mindanao Bus Co. the question is whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement (which are indubitably taxable realty) should be subject to the realty tax. 181-2. 96 Phil. such as land. WHEREFORE. m) Machinery — shall embrace machines. City Assessor.effect on June 1. or any person having only a temporary right. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty (84 C. GOQUIOLAY. 44 Phil. industrial or agricultural purposes (See sec. and other improvements" not specifically exempted in section 3 thereof. 1125 created the Tax Court in 1954. vs. Section 36 of the Real Property Tax Code provides that the decision of the Central Board of Assessment Appeals shall become final and executory after the lapse of fifteen days from the receipt of its decision by the appellant. Castillo. in the same category as the Tax Court. Here. (Compare with Machinery & Engineering Supplies. It includes the physical facilities available for production. a petition for reconsideration may be filed. buildings. where Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which exempts its poles from taxation. Section 7(3) of that law in providing that the Tax Court had jurisdiction to review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is. 2000 SERG'S PRODUCTS. 3[f]. and that the definitions of real property and personal property in articles 415 and 416 of the Civil Code are not applicable to this case. denying Caltex's motion for reconsideration. for without them the gas station would be useless. The Solicitor General's contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this case is not correct. where in a replevin case machinery was treated as realty). 119 Phil. 328. 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's decision and for a declaration that t he said machines and equipment are personal property not subject to realty tax (p.
— There shall be levied. 630. and which have been attached or affixed permanently to the gas station site or embedded therein. a usufructuary. a party is estopped from subsequently claiming .S. 1979. SO ORDERED.J. The Code contains the following definitions in its section 3: k) Improvements — is a valuable addition made to property or an amelioration in its condition. amounting to more than mere repairs or replacement of waste.. That ruling is an interpretation of paragraph 5 of article 415 of the Civil Code regarding machinery that becomes real property by destination. 38. Inc. The Code does not provide for the review of the Board's decision by this Court.. 61 Phil 709). appliances and apparatus attached to the real estate.. Notes 40 and 41). 501). 116 Phil. Section 2 of the Assessment Law provides that the realty tax is due "on real property. Assessment Law).

on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin. respondent judge issued a writ of replevin (Annex ‘B’) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. 3. The Court’s Ruling The Petition is not meritorious. Rizal and to return to their original place whatever immobilized machineries or equipments he may have removed. Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization. petitioners filed a motion for special protective order (Annex ‘C’). "On March 24. The following are immovable property: xxx xxx xxx (5) Machinery. There is no question that the present recourse is under Rule 45. In this light. motu proprio. because they were in fact real property. Article 415 of the Civil Code enumerates immovable or real property as follows: "ART. ("PCI Leasing" for short) filed with the RTC-QC a complaint for [a] sum of money (Annex ‘E’). xxx xxx x x x" In the present case. petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code. Preliminary Matter: Procedural Questions Respondent contends that the Petition failed to indicate expressly whether it was being filed under Rule 45 or Rule 65 of the Rules of Court. It also ruled that the "words of the contract are clear and leave no doubt upon the true intention of the contracting parties. invoking the power of the court to control the conduct of its officers and amend and control its processes. 14 substantial justice requires that such lapse by itself should not warrant the dismissal of the present Petition. seized one machinery with [the] word that he [would] return for the other machineries. The Case Before us is a Petition for Review on Certiorari assailing the January 6." 9 The Facts The undisputed facts are summarized by the Court of Appeals as follows: 10 "On February 13. 11 The Issues In their Memorandum. 1998. they argue. "This motion was opposed by PCI Leasing (Annex ‘F’). 7 The March 18. It further alleges that the Petition erroneously impleaded Judge Hilario Laqui as respondent. Main Issue: Nature of the Subject Machinery Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC. He was able to take two more. with an application for a writ of replevin docketed as Civil Case No. 1998 Order. 1998. "On March 6. to accord merit to this petition would be to preempt the trial court in ruling upon the case below." Observing that Petitioner Goquiolay was an experienced businessman who was "not unfamiliar with the ways of the trade. 1999 Decision1 of the Court of Appeals (CA) 2 in CA-GR SP No.15 Section 3 thereof reads: "SEC. militate against a contrary characterization. Q-98-33500.Upon the filing of such affidavit and approval of the bond. all of them have become . the appellate court held that the subject machines were personal property. they went to [the CA] via an original action for certiorari. "On April 7. praying that the deputy sheriff be enjoined "from seizing immobilized or other real properties in (petitioners’) factory in Cainta. not immovable. The contract is being enforced by one. the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land. the Court will resolve whether the said machines are personal. 1998. necessitating presentation of evidence by both parties. Hence. "12 In the main. The writ of preliminary injunction issued on June 15. The decretal portion of the CA Decision reads as follows: "WHEREFORE. property which may be a proper subject of a writ of replevin. not owned. "In their Reply." it ruled that he "should have realized the import of the document he signed. 1998 Resolution 8 denied petitioners’ Motion for Special Protective Order. such property is a proper subject of a writ of replevin obtained by the other contracting party." Ruling of the Court of Appeals Citing the Agreement of the parties. "On March 25. 1998 in Civil Case No. 1998. "On April 6. 1998. receptacles. the name of Judge Laqui from the caption of the present case. -. They argued that to give effect to the agreement would be prejudicial to innocent third parties. the assailed Order dated February 18. and [its] validity is attacked by the other – a matter x x x which respondent court is in the best position to determine. 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. respondent PCI Leasing and Finance. praying for a directive for the sheriff to defer enforcement of the writ of replevin. 415. but was prevented by the workers from taking the rest. by petitioners. the sheriff proceeded to petitioner’s factory. 1998 and Resolution dated March 31." 13 While Judge Laqui should not have been impleaded as a respondent. Q-98-33500 are hereby AFFIRMED. they were essential and principal elements of their chocolate-making industry. upon an ex-parte application of PCI Leasing. The issues raised herein are proper subjects of a full-blown trial. Order. although each of them was movable or personal property on its own. the Court deems it proper to remove. Inc. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical. and which tend directly to meet the needs of the said industry or works." On the other hand. this Petition. petitioners submit the following issues for our consideration: "A. B. since the merits of the whole matter are laid down before us via a petition whose sole purpose is to inquire upon the existence of a grave abuse of discretion on the part of the [RTC] in issuing the assailed Order and Resolution. This conclusion finds support in the very title of the Petition."4 In its February 18. the court shall issue an order and the corresponding writ of replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into his custody. 1998 is hereby LIFTED." Hence. Hence. Indisputably. which is "Petition for Review on Certiorari.otherwise. the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. the parties’ agreement to the contrary notwithstanding. and that they had only been leased. Serious policy considerations. 47332 and its February 26. 5 the Regional Trial Court (RTC) of Quezon City (Branch 218)6 issued a Writ of Seizure. 1998. Whether or not the contract between the parties is a loan or a lease. 1999 Resolution3 denying reconsideration. As a preliminary matter." The CA further held: "Furthermore. the Court will also address briefly the procedural points raised by respondent. in implementation of said writ. premises considered. Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.

1 of the Agreement reads as follows:21 "12.24 Submitting documents supposedly showing that they own the subject machines. or annullable pursuant to Article 1390 of the new Civil Code. Indeed. third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. ruling as follows: "x x x. 17 Be that as it may. however. yet by ceding. or at least. he may. and thereby put at issue the matter of the title or right of possession over the specific chattel being replevied. but if he does not so object." The Court rejected the argument and relied on the Deed.
 Vicencio. it must be presumed valid and binding as the law between the parties. they should be threshed out in the trial. the Lease Agreement clearly provides that the machines in question are to be considered as personal property. the Court noted that the remedy of defendants under Rule 60 was either to post a counter-bond or to question the sufficiency of the plaintiff’s bond. then its workers would be out of work and thrown into the streets. at any time before the delivery of the property to the applicant. in double the value of the property as stated in the applicant’s affidavit for the delivery thereof . Although there is no specific statement referring to the subject house as personal property. or hereafter become. by a proper action in court. The Court ruled: "In other words. not in the proceedings involving the issuance of the Writ of Seizure. not personal. Under the principle of estoppel. however." 28 Besides. Section 12. The Court ruled: "x x x. and shall at all times be and remain.1âwphi1 As earlier discussed.1 The PROPERTY is. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on ground of insufficiency of the complaint or of the grounds relied upon therefor. the policy apparently being that said matter should be ventilated and determined only at the trial on the merits. a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. in La Tondeña Distillers v. 23 In any event. the Deed of Chattel Mortgage. Makati Leasing and Finance Corporation30 is also instructive on this point. while the parties are bound by the Agreement.19 the Court upheld the intention of the parties to treat a house as a personal property because it had been made the subject of a chattel mortgage.18 After agreeing to such stipulation. A resolution of these questions. as in the present case. which had ironically been instituted by respondent." Clearly then. law and jurisprudence support its propriety. In that case. The provision states: "SEC. petitioners are estopped from denying the characterization of the subject machines as personal property." 25 In their Reply to respondent’s Comment. Under the circumstances.
 CA. or attached in any manner to what is permanent. They were not allowed. Accordingly.29 Reliance on the Lease Agreement It should be pointed out that the Court in this case may rely on the Lease Agreement. Pertinent portions of the Court’s ruling are reproduced hereunder: "x x x. x x x" Alleged Injustice Committed on the Part of Petitioners Petitioners contend that "if the Court allows these machineries to be seized. we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure. if they come true." In the present case. intended to treat the same as such. Return of property. Moreover. petitioners are correct in arguing that the said machines are real. such fact alone does not render a contract void ab initio. There is nothing on record to show that the mortgage has been annulled. therefore. to invoke the title to the subject property. 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."immobilized by destination because they are essential and principal elements in the industry. personal property notwithstanding that the PROPERTY or any part thereof may now be. there is no showing that any specific third party would be adversely affected. by filing with the court where the action is pending a bond executed to the applicant. Hence. or of the surety or sureties thereon. The validity and the nature of the contract are the lis mota of the civil action pending before the RTC.If the adverse party objects to the sufficiency of the applicant’s bond. which characterized the subject machinery as personal property. Hence. 26 These arguments are unconvincing. the abovementioned consequences. or permanently resting upon. which is movable in its nature and becomes immobilized only by destination or purpose. he cannot immediately require the return of the property. should not be blamed on this Court. they are consequently estopped from claiming otherwise. the Court in Makati Leasing and Finance Corp. In that case. but on the petitioners for failing to avail themselves of the remedy under Section 5 of Rule 60. may not be likewise treated as such. Specifically. which allows the filing of a counter-bond. even granting that the charge is true. Neither is it disclosed that steps were taken to nullify the same. like what was involved in the above Tumalad case. as in proceedings on preliminary attachment or injunction." 31 They also allege that the seizure would nullify all efforts to rehabilitate the corporation. in any manner affixed or attached to or embedded in. property pursuant to Article 415 (5) of the Civil Code.
 v. It should be stressed. Verily. Validity of the Lease Agreement In their Memorandum. they are proper subjects of the Writ of Seizure.27 the Court explained that the policy under Rule 60 was that questions involving title to the subject property – questions which petitioners are now raising -. both of which have no place in a petition for certiorari in the CA under Rule 65 or in a petition for review in this Court under Rule 45.should be determined in the trial."16 In that sense. petitioners also argue in their Petition that the Agreement suffers from "intrinsic ambiguity which places in serious doubt the intention of the parties and the validity of the lease agreement itself. 5. 22 Hence. In fact. petitioners assailed it first only in the RTC proceedings. for nothing on record shows that it has been nullified or annulled. was a proper subject of a writ of replevin because it was treated as personal property in a contract." Applying Tumalad. The Court has held that contracting parties may validly stipulate that a real property be considered as personal. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. -. that our holding -. is effectively a resolution of the merits of the case. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage. If a house of strong materials. they further allege that the Agreement is invalid. there is absolutely no reason why a machinery. in Tumalad v. Petitioners’ arguments do not preclude the implementation of the Writ.that the machines should be deemed personal property pursuant to the Lease Agreement – is good only insofar as the contracting parties are concerned. but can only be a ground for rendering said contract voidable. these questions require a determination of facts and a presentation of evidence. petitioners contend that the Agreement is a loan and not a lease. real property or any building thereon. was also assailed because respondent had allegedly been required "to sign a printed form of chattel mortgage which was in a blank form at the time of signing.
 Wearever Textile Mills20 also held that the machinery used in a factory and essential to the industry. require the return thereof.

vs. 1998 Resolution 8 denied petitioners’ Motion for Special Protective Order."4 In its February 18. 11 The Issues In their Memorandum. 1998. "This motion was opposed by PCI Leasing (Annex ‘F’). which is "Petition for Review on Certiorari. 1998 Order. Q-98-33500. "12 In the main. seized one machinery with [the] word that he [would] return for the other machineries. in implementation of said writ. the Court deems it proper to remove. 47332 and its February 26." Ruling of the Court of Appeals Citing the Agreement of the parties. 7 The March 18." 9 The Facts The undisputed facts are summarized by the Court of Appeals as follows: 10 "On February 13. 1998. There is no question that the present recourse is under Rule 45. not owned. motu proprio. since the merits of the whole matter are laid down before us via a petition whose sole purpose is to inquire upon the existence of a grave abuse of discretion on the part of the [RTC] in issuing the assailed Order and Resolution. 1998 in Civil Case No. He was able to take two more. by petitioners. Preliminary Matter: Procedural Questions Respondent contends that the Petition failed to indicate expressly whether it was being filed under Rule 45 or Rule 65 of the Rules of Court. DECISION PANGANIBAN. This conclusion finds support in the very title of the Petition. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical. No. As a preliminary matter. to accord merit to this petition would be to preempt the trial court in ruling upon the case below. "On March 6. 1998. Whether or not the contract between the parties is a loan or a lease. They argued that to give effect to the agreement would be prejudicial to innocent third parties. 1998. respondent PCI Leasing and Finance. "On March 24. "On April 7. SO ORDERED. Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization. J. if such delivery be adjudged. Main Issue: Nature of the Subject Machinery Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC. and SERGIO T. Costs against petitioners. invoking the power of the court to control the conduct of its officers and amend and control its processes. The Court’s Ruling The Petition is not meritorious. The contract is being enforced by one. 1998 is hereby LIFTED.to the applicant. petitioners filed a motion for special protective order (Annex ‘C’). "In their Reply. premises considered. with an application for a writ of replevin docketed as Civil Case No." Observing that Petitioner Goquiolay was an experienced businessman who was "not unfamiliar with the ways of the trade. and that they had only been leased. the name of Judge Laqui from the caption of the present case. Hence. 1998." 13 While Judge Laqui should not have been impleaded as a respondent. 137705 August 22. on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin. petitioners.. Inc. petitioners submit the following issues for our consideration: "A. "On March 25. GOQUIOLAY. PCI LEASING AND FINANCE. the parties’ agreement to the contrary notwithstanding. In this light. praying that the deputy sheriff be enjoined "from seizing immobilized or other real properties in (petitioners’) factory in Cainta. 1999 Decision1 of the Court of Appeals (CA) 2 in CA-GR SP No. the assailed Order dated February 18. they went to [the CA] via an original action for certiorari. "On April 6. INC. respondent. 5 the Regional Trial Court (RTC) of Quezon City (Branch 218)6 issued a Writ of Seizure. not immovable. It further alleges that the Petition erroneously impleaded Judge Hilario Laqui as respondent. the sheriff proceeded to petitioner’s factory. Rizal and to return to their original place whatever immobilized machineries or equipments he may have removed.: After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable. because they were in fact real property. petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code. The decretal portion of the CA Decision reads as follows: "WHEREFORE. B. The issues raised herein are proper subjects of a full-blown trial. property which may be a proper subject of a writ of replevin." it ruled that he "should have realized the import of the document he signed. 1999 Resolution3 denying reconsideration. but was prevented by the workers from taking the rest. a party is estopped from subsequently claiming otherwise. such property is a proper subject of a writ of replevin obtained by the other contracting party. upon an ex-parte application of PCI Leasing. and by serving a copy bond on the applicant. respondent judge issued a writ of replevin (Annex ‘B’) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. 1998. the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. The Case Before us is a Petition for Review on Certiorari assailing the January 6. the Court will resolve whether the said machines are personal. 1998 and Resolution dated March 31." WHEREFORE.R. 2000 SERG'S PRODUCTS. INC. the appellate court held that the subject machines were personal property. the Court will also address briefly the procedural points raised by respondent. It also ruled that the "words of the contract are clear and leave no doubt upon the true intention of the contracting parties." The CA further held: "Furthermore. Q-98-33500 are hereby AFFIRMED.." Hence. and [its] validity is attacked by the other – a matter x x x which respondent court is in the best position to determine. ("PCI Leasing" for short) filed with the RTC-QC a complaint for [a] sum of money (Annex ‘E’). 14 substantial justice requires that such lapse by itself should not warrant the dismissal of the present Petition. and for the payment of such sum to him as may be recovered against the adverse party. The writ of preliminary injunction issued on June 15. this Petition. praying for a directive for the sheriff to defer enforcement of the writ of replevin. necessitating presentation of evidence by both parties. . G.

Validity of the Lease Agreement In their Memorandum. The validity and the nature of the contract are the lis mota of the civil action pending before the RTC. third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. If a house of strong materials.
 Vicencio. they argue. is effectively a resolution of the merits of the case. Hence. they further allege that the Agreement is invalid. It should be stressed. In that case. the court shall issue an order and the corresponding writ of replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into his custody. it must be presumed valid and binding as the law between the parties. 22 Hence. or at least. Specifically. may not be likewise treated as such. both of which have no place in a petition for certiorari in the CA under Rule 65 or in a petition for review in this Court under Rule 45. property pursuant to Article 415 (5) of the Civil Code. 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. The Court ruled: "x x x. petitioners contend that the Agreement is a loan and not a lease. receptacles. Indeed. 415. 3. They were not allowed. 15 Section 3 thereof reads: "SEC. they are proper subjects of the Writ of Seizure. like what was involved in the above Tumalad case. -. or attached in any manner to what is permanent.Upon the filing of such affidavit and approval of the bond.27 the Court explained that the policy under Rule 60 was that questions involving title to the subject property – questions which petitioners are now raising -. yet by ceding. 26 These arguments are unconvincing. real property or any building thereon. or hereafter become. as in the present case. all of them have become "immobilized by destination because they are essential and principal elements in the industry.should be determined in the trial. petitioners assailed it first only in the RTC proceedings."16 In that sense. Hence. Under the circumstances. the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land.1 of the Agreement reads as follows:21 "12." 25 In their Reply to respondent’s Comment. while the parties are bound by the Agreement. and shall at all times be and remain. in Tumalad v. which characterized the subject machinery as personal property. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. not personal. petitioners are estopped from denying the characterization of the subject machines as personal property. and which tend directly to meet the needs of the said industry or works. however. they should be threshed out in the trial.18 After agreeing to such stipulation. personal property notwithstanding that the PROPERTY or any part thereof may now be. Makati Leasing and Finance Corporation30 is also instructive on this point. intended to treat the same as such. was a proper subject of a writ of replevin because it was treated as personal property in a contract. although each of them was movable or personal property on its own.29 Reliance on the Lease Agreement It should be pointed out that the Court in this case may rely on the Lease Agreement. in any manner affixed or attached to or embedded in. Article 415 of the Civil Code enumerates immovable or real property as follows: "ART." In the present case. petitioners also argue in their Petition that the Agreement suffers from "intrinsic ambiguity which places in serious doubt the intention of the parties and the validity of the lease agreement itself. however. which had ironically been instituted by respondent. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. they were essential and principal elements of their chocolate-making industry. the Court noted that the remedy of defendants under Rule 60 was either to post a counter-bond or to question the sufficiency of the plaintiff’s bond. was also assailed because respondent had allegedly been required "to sign a printed form of chattel mortgage which was in a blank form at the . xxx xxx x x x" In the present case. and thereby put at issue the matter of the title or right of possession over the specific chattel being replevied. as in proceedings on preliminary attachment or injunction. these questions require a determination of facts and a presentation of evidence. Pertinent portions of the Court’s ruling are reproduced hereunder: "x x x. that our holding -. in La Tondeña Distillers v. A resolution of these questions. In fact. 23 In any event. to invoke the title to the subject property. Hence. The following are immovable property: xxx xxx xxx (5) Machinery. or permanently resting upon.Serious policy considerations. a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. the Deed of Chattel Mortgage. The Court has held that contracting parties may validly stipulate that a real property be considered as personal." On the other hand. Indisputably." Applying Tumalad. which is movable in its nature and becomes immobilized only by destination or purpose.24 Submitting documents supposedly showing that they own the subject machines. militate against a contrary characterization. Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only. Although there is no specific statement referring to the subject house as personal property. we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage.
 Wearever Textile Mills20 also held that the machinery used in a factory and essential to the industry. for nothing on record shows that it has been nullified or annulled. Order. Section 12.
 v. the Lease Agreement clearly provides that the machines in question are to be considered as personal property. the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on ground of insufficiency of the complaint or of the grounds relied upon therefor. there is no showing that any specific third party would be adversely affected.1 The PROPERTY is. they are consequently estopped from claiming otherwise." 28 Besides. therefore. petitioners are correct in arguing that the said machines are real. The Court ruled: "In other words. the policy apparently being that said matter should be ventilated and determined only at the trial on the merits. 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. not in the proceedings involving the issuance of the Writ of Seizure. there is absolutely no reason why a machinery.
 CA. the Court in Makati Leasing and Finance Corp. Under the principle of estoppel.19 the Court upheld the intention of the parties to treat a house as a personal property because it had been made the subject of a chattel mortgage. In that case. 17 Be that as it may.that the machines should be deemed personal property pursuant to the Lease Agreement – is good only insofar as the contracting parties are concerned. Accordingly." Clearly then.

ordering the defendants to vacate the premises described in the complaint.: Case certified to this Court by the Court of Appeals (CA-G. starting September. claiming that they are still the owners of the house. ruling as follows: "x x x. Petitioners’ arguments do not preclude the implementation of the Writ. the court granted plaintiffs-appellees' motion for execution.L. the house was sold at public auction pursuant to the said contract. 2554. 7 On 7 October 1957. and for the payment of such sum to him as may be recovered against the adverse party. The motion of plaintiffs for dismissal of the appeal. praying. 43073. vs. or annullable pursuant to Article 1390 of the new Civil Code. It appears on the records that on 1 September 1955 defendants-appellants executed a chattel mortgage in favor of plaintiffs-appellees over their house of strong materials located at No. Rule 72. 1956. The mode of payment was P150. the Sheriff of the City of Manila or any of his deputies is hereby empowered and authorized to sell all the Mortgagor's property after the necessary publication in order to settle the financial debts of P4. 3 Thereafter." WHEREFORE. and for defendants-appellants to pay rent of P200. ordering further to pay monthly the amount of P200. the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. certified the appeal to this Court. or of the surety or sureties thereon.800. defendantsappellants failed to deposit the rent for November. No. over Lot Nos. 3. in double the value of the property as stated in the applicant’s affidavit for the delivery thereof to the applicant. 30993) which also rendered a decision against them. 4 On 21 September 1956. defendantsappellants appealed to the court a quo (Civil Case No.00 and the costs of the suit. 2 When defendants-appellants defaulted in paying.00 received from plaintiffs-appellees. payable within one year at 12% per annum.00 monthly.. the mortgage was extrajudicially foreclosed. As a result. even granting that the charge is true. 1956. 6 During the pendency of the appeal to the Court of First Instance. Block No. is ownership. and by serving a copy bond on the applicant. law and jurisprudence support its propriety. 550 Int. but on the petitioners for failing to avail themselves of the remedy under Section 5 of Rule 60. 6-B and 7-B. Instead. 5 Defendants-appellants. ALBERTA VICENCIO and EMILIANO SIMEON. at any time before the delivery of the property to the applicant. with interest at the legal rate from April 18. Castillo & Suck for plaintiffs-appellees.00 monthly from 27 March 1956 up to the time the possession is surrendered. the dispositive portion of which follows: WHEREFORE. execution of the supersedeas bond and withdrawal of deposited rentals was denied for the reason that the liability therefor was disclaimed and was still being litigated. plaintiffs-appellant commenced Civil Case No. However.time of signing. 1967.. the municipal court rendered its decision — . J. but if he does not so object. but they waived the right to introduce evidence. and (2) there was no allegation of prior possession.00. No. they relied on their memoranda in support of their motion to dismiss. G. the court hereby renders judgment in favor of the plaintiffs and against the defendants. rentals deposited had to be held until final disposition of the appeal. Moreover. he may. and on 27 March 1956. 1956 as ordered in the decision of the municipal court. ordering the latter to pay jointly and severally the former a monthly rent of P200.If the adverse party objects to the sufficiency of the applicant’s bond. the filing of the complaint. among other things. from March 27. and the lump sum of P3.800.. The herein mortgage was executed to guarantee a loan of P4. -. until such (time that) the premises is (sic) completely vacated. subject-matter of this action. Rule 72. J. oral or documentary. which allows the filing of a counter-bond.B.
 Calingo for defendants-appellants. 1955.
 REYES. Verily. 3135. Neither is it disclosed that steps were taken to nullify the same. and attorney's fees. . should not be blamed on this Court.00 from March 27. predicated mainly on the grounds that: (a) the municipal court did not have jurisdiction to try and decide the case because (1) the issue involved. 1956 within the first 10 days of December. There is nothing on record to show that the mortgage has been annulled. which were being rented from Madrigal & Company. plus attorney's fees in the sum of P300. The mortgage was registered in the Registry of Deeds of Manila on 2 September 1955. 27824-R) for the reason that only questions of law are involved. defendants-appellants. 1956. and under Section 8. the appellate court of First Instance rendered its decision. on 18 April 1956.. the dispositive portion of which is quoted earlier. Costs against petitioners.. but can only be a ground for rendering said contract voidable. TUMALAD and GENEROSA R. plus attorney's fees of P100. of the Rules of Court. L-30173 September 30. This case was originally commenced by defendants-appellants in the municipal court of Manila in Civil Case No. if such delivery be adjudged. Quezon Boulevard. for ejectment. if they come true. by a proper action in court. and it was actually issued on 24 January 1957. and for this purpose. plaintiffs-appellees. TUMALAD. Quiapo. in their answers in both the municipal court and court a quo impugned the legality of the chattel mortgage. the judgment regarding the surrender of possession to plaintiffs-appellees could not be executed because the subject house had been already demolished on 14 January 1957 pursuant to the order of the court in a separate civil case (No." 31 They also allege that the seizure would nullify all efforts to rehabilitate the corporation. The provision states: "SEC. to January 14. 1971 GAVINO A. until fully paid. require the return thereof. Inc. then its workers would be out of work and thrown into the streets. x x x" Alleged Injustice Committed on the Part of Petitioners Petitioners contend that "if the Court allows these machineries to be seized. The said decision was appealed by defendants to the Court of Appeals which. 25816) for ejectment against the present defendants for non-payment of rentals on the land on which the house was constructed. such fact alone does not render a contract void ab initio. Return of property." The Court rejected the argument and relied on the Deed. 1956.R. plus 12% yearly interest. SO ORDERED. he cannot immediately require the return of the property.150 was payable on or before August. Manila. by filing with the court where the action is pending a bond executed to the applicant. the abovementioned consequences.
 Jose Q. would cause the remaining unpaid balance to becomeimmediately due and Payable and — the Chattel Mortgage will be enforceable in accordance with the provisions of Special Act No. Having lost therein. in turn. up to July 1956. that the house be vacated and its possession surrendered to them.00 and to pay the costs. 43073 in the municipal court of Manila. As highest bidder. and (b) failure to prove prior demand pursuant to Section 2.1âwphi1 As earlier discussed. It was also agreed that default in the payment of any of the amortizations.00 on the house.R. 5. plaintiffs-appellees were issued the corresponding certificate of sale.

On the charge of fraud. Central Altagracia. and this Court hold therein that it was a valid Chattel mortgage because it was so expressly designated and specifically that the property given as security "is a house of mixed materials. it is obvious that the inclusion of the building. partly. The rule about the status of buildings as immovable property is stated in Lopez vs. [CA]. Alto Surety. New Civil Code) could only mean one thing — that a building is by itself an immovable property irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner. and although this can not in itself alone determine the status of the property. and Plaza Theatre Inc.. In the case of Sy vs. in the case of Luna vs. but also because it did not form part of the land (Evangelists vs. . a conduct that may conceivably estop him from subsequently claiming otherwise.Plaintiffs-appellees failed to file a brief and this appeal was submitted for decision without it. C. intended to treat the same as such. (a) Defendants-appellants mortgagors question the jurisdiction of the municipal court from which the case originated. [CA] 48 O. 27 it is the defendantsappellants themselves. (b) Whether the defendants are. Neither is it disclosed that steps were taken to nullify the same. or trickery. it does so when combined with other factors to sustain the interpretation that the parties.. The doctrine of estoppel therefore applies to the herein defendants-appellants. Supra. (Evangelista vs.G.
 Iya. which by its very nature is considered personal property. it was likewise held by this Court that in detainer cases the aim of ownership "is a matter of defense and raises an issue of fact which should be determined from the evidence at the trial." In the later case of Navarro vs. and consequently. the chattel mortgage was still null and void ab initio because only personal properties can be subject of a chattel mortgage. Inc. "is good only insofar as the contracting parties are concerned.
 and Plaza Theatre. and. Again.. legally bound to pay rentals to the plaintiffs during the period of one (1) year provided by law for the redemption of the extrajudicially foreclosed house. 25 and Leung Yee vs. Hence.
 L. the ownership of the house still remained with defendants-appellants who are entitled to possession and not plaintiffs-appellees.
 Dalman. and (b) that the subject matter of the mortgage is a house of strong materials. have been allowed for various reasons.N. In the case of Manarang and Manarang vs. deceit or trickery. Castillo." 9 It has been held in Supia and Batiaco vs. the house on rented land is not only expressly designated as Chattel Mortgage.. deceit. Thus. 36 O. Inc. that when the question to be determined is one of title. particularly the mortgagors.
 F. on the theory that the chattel mortgage is void ab initio. 23 April 1958).
 Orosa. does not become immobilized by attachment (Valdez vs.. voluntarily CEDES. vs. however.. et al. 17 this Court stated that "it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property". 58. 18 In the latter case." What determines jurisdiction are the allegations or averments in the complaint and the relief asked for. yet by ceding.
 Ofilada. It is claimed in the alternative by defendants-appellants that even if there was no fraud. the appellate jurisdiction of the Court of First Instance a quo. namely: . having treated the subject house as personalty.) It should be noted. but it is not evidence. who are attacking the validity of the chattel mortgage in this case.
 vs. a mortgaged house built on a rented land was held to be a personal property. citing Standard Oil Company of New York vs. whence it would follow that the extrajudicial foreclosure. it specifically provides that "the mortgagor . L-11139. 2913). even granting that the charge is true. their signatures on the chattel mortgage were obtained through fraud. Inc. the Court of First Instance found defendants-appellants' contentions as not supported by evidence and accordingly dismissed the charge. the Court is given the authority to proceed with the hearing of the cause until this fact is clearly established. Abad. SELLS and TRANSFERS by way of Chattel Mortgage 23 the property together with its leasehold rights over the lot on which it is constructed and participation . Abad. et al." 24 Although there is no specific statement referring to the subject house as personal property. deceit or trickery." 19 The "personal property" consisted of leasehold rights and a building. Defendants-appellants submitted numerous assignments of error which can be condensed into two questions. being an immovable.
 Strong Machinery and Williamson. Therefore. or at least. in the enumeration of what may constitute real properties (art. 13 Moreover. the subject house stood on a rented lot to which defendats-appellants merely had a temporary right as lessee. by a proper action in court. it may be mortgaged as a personal property as so stipulated in the document of mortgage. it is argued by defendants-appellants. defendantsappellants' claim of ownership on the basis of a voidable contract which has not been voided fails. Certain deviations.
 Quintero and Ayala 10 that "the answer is a mere statement of the facts which the party filing it expects to prove.
.S.. which are: (a) that.
 Pineda. It is based. Hodges.. and can only be a ground for rendering the contract voidable or annullable pursuant to Article 1390 of the New Civil Code. not only because the deed of mortgage considered it as such.. lt is contended further that ownership being in issue.
 Encarnacion. separate and distinct from the land. 16 to the effect that — .G. Lopez vs. (Ladera vs. are mere allegations.. fraud or deceit does not render a contract void ab initio. In a case. 14 There is nothing on record to show that the mortgage has been annulled. upon the principle of estoppel" (Evangelista vs.. 26 wherein third persons assailed the validity of the chattel mortgage.
 Jaramillo. if a house belonging to a person stands on a rented land belonging to another person. 11 and further. as debtors-mortgagors. 21 this Court stated that — 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. 12 wherein the defendant was also a successful bidder in an auction sale. We will consider these questions seriatim. (a) Whether the municipal court from which the case originated had jurisdiction to adjudicate the same. Jr. 61 Phil. the issue of ownership will have to be adjudicated first in order to determine possession. intended to treat the house as personalty. such as the lessee or usufructuary. Jr. 222 U. are also void. 709). 20 the subject of the contract designated as Chattel Mortgage was a house of mixed materials. Hence. the mortgagor conveyed and transferred to the mortgagee by way of mortgage "the following described personal property. No. Finally unlike in the Iya cases. under the law. and necessarily the consequent auction sale.
 Orosa. selling or transferring a property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel. Defendants-appellants predicate their theory of nullity of the chattel mortgage on two grounds. for it is now settled that an object placed on land by one who had only a temporary right to the same. it is the Court of First Instance which has jurisdiction and not the municipal court. so that they should not now be allowed to make an inconsistent stand by claiming otherwise. 8 confirming the earlier finding of the municipal court that "the defense of ownership as well as the allegations of fraud and deceit . 5374): 22 In the contract now before Us. however that the principle is predicated on statements by the owner declaring his house to be a chattel. 415. 15 cited in Associated Insurance Surety Co. it can only be the subject of a real estate mortgage and not a chattel mortgage. cited in Davao Sawmill Co. Moreover.

Lapena vs.R. G. accountable to the judgment-debtor or mortgagor as the case may be. 1959.R. supra) IN VIEW THEREOF. 75 Phil.. J. The Provincial Sheriff of Surigao. We must rule for the appellants. (Emphasis supplied) The Hamada case reiterates the previous ruling in Chan vs..R. and to collect the rents or profits during the said period. On this issue. In such a case. 81 Phil. unless a motion is filed on the ground fraud. For this reason. In other words. This alone is a substantial compliance as to notice.
 Luison for petitioner. as well as attorney's fees. 1508.00 attorney's fees. at any time within one year from and after the date of the auction sale. or his counsel. respondents. Since plaintiffsappellees' right to possess was not yet born at the filing of the complaint. upon petition. Petitioner's motion for reconsideration dated October 12." 30 (Emphasis supplied). ORTIZ. Act No." which in part reads: In this case for certiorari and prohibition with preliminary injunction. On August 15. Petitioner now contends that the respondent Judge exceeded in his jurisdiction in rendering the execution without valid and formal notice of the decision.: Appeal by certiorari to review the decision of respondent Court of Appeals in CA-G. May 22. which is the law selected by the parties to govern the extrajudicial foreclosure of the chattel mortgage. it appears from the records that the respondent Judge of the Court of First Instance of Agusan rendered judgment (Annex "A") in open court on January 28. this Court stated in the aforestated case of Reyes vs. 35 Construing the said section. The rationale for the Rule. for the amount so received and the same will be duly credited against the redemption price when the said debtor or mortgagor effects the redemption. For this reason. as a matter of right. was given in open court. The judgment on the compromise agreement rendered by the court below dated January 28. May 21. It is only upon filing of the proper motion and the approval of the corresponding bond that the order for a writ of possession issues as a matter of course. G. even if there was no assignment of error to that effect. petitioner. G. Gonzales G. the date of the auction sale. Thus. the rentals receivable from tenants. IT IS SO ORDERED. et al. No. until 27 March 1957.
 Hamada. It is a general rule in this jurisdiction that a judgment based on a compromise agreement is not appealable and is immediately executory. Martin. plus P300. No. No. Inc. dismissing the complaint. AGO. INC. although they may be collected by the purchaser during the redemption period. i. 33 In the absence of such a compliance. July 31. Differently stated.. as amended by Act No. FOR THE FOREGOING REASONS. Jose M. vs. mistake or duress. he is.R.R. there could be no violation or breach thereof. provided that the requirements of the law relative to notice and registration are complied with. 3135.
 3135 . 28 Section 14 of this Act allows the mortgagee to have the property mortgaged sold at public auction through a public officer in almost the same manner as that allowed by Act No.. Martin vs. 1962 PASTOR D. they are entitled to remain in possession during the period of redemption or within one year from and after 27 March 1956. No. redeem the property sold at the extra judicial foreclosure sale. THE PROVINCIAL SHERIFF OF SURIGAO and GRACE PARK ENGINEERING. . the payment of the redemption amount and the consequent return to him of his properties sold at public auction.(b) Turning to the question of possession and rentals of the premises in question. COURT OF APPEALS. the purchaser can not claim possession during the period of redemption as a matter of right. the said court limited itself to sentencing the erstwhile mortgagors to pay plaintiffs a monthly rent of P200.
 Espe. while it is true that the Rules of Court allow the purchaser to receive the rentals if the purchased property is occupied by tenants. 1959 alleges that he. the Court of First Instance issued a writ of execution. the decision appealed from is reversed and another one entered. Neither was there an allegation to that effect. Rule 39. THE HON. 1957) Petitioner's claim that he was not notified or served notice of the decision is untenable. The petition for certiorari is hereby dismissed and the writ of preliminary injunction heretofore dissolved. the purchaser thereof is not entitled. Section 7 of the same Act 32 allows the purchaser of the property to obtain from the court the possession during the period of redemption: but the same provision expressly requires the filing of a petition with the proper Court of First Instance and the furnishing of a bond. MONTANO A. L-12439. (Gonzales vs. It will be noted further that in the case at bar the period of redemption had not yet expired when action was instituted in the court of origin. claiming that they were entitled to remain in possession without any obligation to pay rent during the one year redemption period after the foreclosure sale. the governing provision is Section 34. Judge of the Court of First Instance of Agusan. before the expiration of the 1-year period within which the judgmentdebtor or mortgagor may redeem the property. do not belong to the latter but still pertain to the debtor of mortgagor. basing said judgment on a compromise agreement between the parties. With costs against plaintiffs-appellees. 37 It follows that the court below erred in requiring the mortgagors to pay rents for the year following the foreclosure sale. to possession of the same. L-10089. 38.e. Ugarte. and that plaintiffs-appellees did not choose to take possession under Section 7. the same should be ordered dismissed. (De los Reyes vs. 29 In the instant case. No.
 LABRABOR. 1959. 4118. as in the instant case. the original complaint stated no cause of action and was prematurely filed. Morfe. The Supreme Court is clothed with ample authority to review palpable errors not assigned as such if it finds that their consideration is necessary in arriving at a just decision of the cases. it seems. L-17898 October 31. Act No. No discretion is left to the court. HON. did not receive a formal and valid notice of said decision. Appellants mortgagors question this award. as amended. The Court of First Instance noted in its decision that nearly a year after the foreclosure sale the mortgaged house had been demolished on 14 and 15 January 1957 by virtue of a decision obtained by the lessor of the land on which the house stood. (De los Reyes vs. 36 Since the defendants-appellants were occupying the house at the time of the auction sale. Section 6 of the Act referred to 31 provides that the debtor-mortgagor (defendantsappellants herein) may.00 from 27 March 1956 (when the chattel mortgage was foreclosed and the house sold) until 14 January 1957 (when it was torn down by the Sheriff). Wherefore. is to secure for the benefit of the debtor or mortgagor. Ago vs. with costs against the petitioner. the parties specifically stipulated that "the chattel mortgage will be enforceable in accordance with the provisions of Special Act No. of the Revised Rules of Court 34 which also applies to properties purchased in extrajudicial foreclosure proceedings. 3135. nevertheless. 1959) . Chattel mortgages are covered and regulated by the Chattel Mortgage Law. 505. we believe that the lower court did not exceed nor abuse its jurisdiction in ordering the execution of the judgment.
The Provincial Fiscal of Surigao for respondent Sheriff of Surigao. which motion for reconsideration was denied by the court below in the order of November 14. 26723-R entitled "Pastor D.
 Quisumbing for respondent Grace Park Engineering. Ugarte. 1948. . A compromise agreement is binding between the parties and becomes the law between them.
Norberto J. L-1254. 1959. 1959.

Inc. filed the petition for certiorari and prohibition with preliminary injunction with respondent Court of Appeals. How judgment rendered. dated September 23. 1959. 1959. Section 1 of Rule 35 describes the manner in which judgment shall be rendered. This raises the following legal question: Is the order dictated in open court of the judgment of the court. petitioner. petitioner Pastor D. signed by Pastor D. Inc. acting upon the writ of execution issued by the lower court. personally or by registered mail. although the certificate sale was not yet executed. The herein respondent. later followed. Surigao del Sur. and is about to proceed in selling the same without prior publication of the notice of sale thereof in some newspaper of general circulation as required by the Rules of Court. therefore. Inc. The notice. whether they are movables or immovables. For all the foregoing. Inc. he had sold them on February 16. And even if the order or judgment has already been put into writing and signed. said judgment could not be effective upon him (petitioner) who had not received it. the fact that the petitioner herein heard the trial judge dictating the judgment in open court. stating clearly and distinctly the facts and the law on which it is based. . 1959 (a date after the decision of the lower court but before levy by the Sheriff). is not sufficient to constitute the service of judgement as required by the above-quoted section 7 of Rule 2 the signed judgment not having been served upon the petitioner. Montano A. It follows as a consequence that the issuance of the writ of execution null and void. Ortiz. while it has not yet been delivered to the clerk for filing it is still subject to amendment or change by the judge. must not only be in writing.00. the parties may be considered as having been notified of said judgment and this fact constitutes due notice of said judgment. 1959 (writ of execution is dated September 23. levied upon and ordered the sale of the sawmill machineries and equipments in question.. — All judgments determining the merits of cases shall be in writing personally and directly prepared by the judge. No judgment can be notified to the parties unless it has previously been rendered.The facts of the case may be briefly stated as follows: In 1957. The mere pronouncement of the judgment in open court with the stenographer taking note thereof does not. If rendition thereof is constituted by the filing with the clerk of court of a signed copy (of the judgment). and signed by him. Having been advised by the sheriff that the public auction sale was set for December 4. executing a chattel mortgage over said machineries and equipments to secure the payment of balance of the price remaining unpaid of P32. It is only when the judgment signed by the judge is actually filed with the clerk of court that it becomes a valid and binding judgment. was the only bidder for P15. To enjoin said foreclosure. — Final orders or judgments shall be served either personally or by registered mail. issued a writ of preliminary injunction against the sheriff but it turned out that the latter had already sold at public auction the machineries in question. is not a valid notice of said judgment. It is the filing of the signed decision with the clerk of court that constitutes rendition. On November 9. that a party has of a judgment that was being dictated is of no effect because at the time no judgment has as yet been signed by the judge and filed with the clerk. instituted extra-judicial foreclosure proceedings of the mortgage. then presiding. These machineries and equipments had been taken to and installed in a sawmill building located in Lianga. Before this Court. petitioner alleges. it is evident that the fact that a party or an attorney heard the order or judgment being dictated in court cannot be considered as notice of the real judgment. therefore. Provincial Sheriff of Surigao. namely. Besides. which petitioner agreed to pay on installment basis. in order that a judgment may be considered as rendered. filed with the lower court a motion for execution. and is the fact the petitioner herein was present in open court was the judgment was dictated. but it must also be filed with the clerk of court. its resultant last order that the "sheriff may now proceed with the sale of the properties levied constituted a grave abuse of discretion and was in excess of its jurisdiction. the mere fact that a party heard the judge dictating the judgment in open court. alleging that a copy of the aforementioned judgment given in open court on January 28. petitioner alleges that the Court of Appeals erred (1) in holding that the rendition of judgment on compromise in open court on January 1959 was a sufficient notice. Service of final orders or judgments. 1960 the Court of Appeals rendered the aforequoted decision. 1959).. constitute the real judgment of the court. 7. 1959. which was granted by the court on August 15. The Court of Appeals held that as a judgment was entered by the court below in open court upon the submission of the compromise agreement. which has been passed upon by the Court of Appeals. so Grace Park Engineering. Inc. on December 8. Ago bought sawmill machineries and equipments from respondent Grace Park Engineer domineering. 1959. Judge of the Court of First Instance of Agusan.000. Regarding the notice of judgment. on December 1. constitute a rendition of the judgment. (a) the legality of the public auction sale made by the sheriff. a copy of the decision. a party is not considered as having been served with the judgment merely because he heard the judgment dictating the said judgment in open court. 53 in the Court of First Instance of Agusan. Petitioner Ago defaulted in his payment and so. 1959. and owned by the Golden Pacific Sawmill. The parties to the case arrived at a compromise agreement and submitted the same in court in writing. Section 7 of Rule 27 provides as follows: SEC. 1959. 1959 until the final decision of the case. it could still be subject to amendment and change and may not. it is necessary that he be served with a copy of the signed judgment that has been filed with the clerk in order that he may legally be considered as having been served with the judgment. Prior thereto. concerns the validity of the proceedings of the sheriff in selling the sawmill machineries and equipments at public auction with a notice of the sale having been previously published. The Court of Appeals. dictated a decision in open court on January 28. Petitioner continued to default in his payments as provided in the judgment by compromise. The Court of Appeals constructed the sheriff to suspend the issuance of a certificate of sale of the said sawmill machineries and equipment sold by him on December 4. the court may still modify said order as the same is being put into writing. 1959 was served upon counsel for petitioner only on September 25. Inc. 1959. that the order and writ of execution having been issued by the lower court before counsel for petitioner received a copy of the judgment. A writ of execution. The respondent Grace Park Engineering. The court of first instance being a court of record. signed by the judge. filed with the clerk of the court. having been issued before petitioner her was served. the Rules expressly require that final orders or judgments be served personally or by registered mail. to whom. While it is to be presumed that the judgment that was dictated in open court will be the judgment of the court. Ago and the Grace Park Engineering. and that the respondent Provincial Sheriff of Surigao was acting illegally upon the allegedly void writ of execution by levying the same upon the sawmill machineries and equipments which have become real properties of the Golden Pacific sawmill. as scheduled. sufficient notice thereof? The provisions of the Rules of Court decree otherwise. on December 4. Inc. The Hon.00. thus: SECTION 1. therefore. and (b) the nature of the machineries in question.000.. The second question raised in this appeal. in 1958 respondent Grace Park Engineering. In accordance with this provision. petitioner herein instituted Special Civil Case No. and (2) in not resolving the other issues raised before it.

R.
 Subscribed and sworn to before me this 4th day of March. Costs shall be against the respondent Grace Park Engineering. (Sgd) L. (Sgd. equal to and equivalent of 4. Southworth. Philippine Islands.The record shows that after petitioner herein Pastor D. (Sgd. by posting a similar notice particularly describing the property for twenty days in three public places in the municipality or city where the property is situated. prosecuting attorney for the city of Manila.. held that the installation of the machine and equipment in the central of the Mabalacat Sugar Co. unlawfully. First Instance. 1911 THE UNITED STATES. The demurrer was overruled on the same day and the defendant having refused to plead.) CHARLES S. 16. SOUTHWORTH. to indemnify the offended party. 1910. in payment of his subscription to the shares of stock of said corporation.. M. of the value of nine hundred and nine (909) pesos and twenty (20) cents Philippine currency. in the sum of P865.000. No. plaintiff-appellee. Inc. LOBINGIER. as well as the sale of the same by the Sheriff of Surigao. the same became a necessary and permanent part of the building or real estate on which the same was constructed.
 PER CURIAM: The information filed in this case is as follows: The undersigned accuses Ignacio Carlos of the crime of theft. by L. and the 3d day of March. The sheriff's return shows that the defendant gave bond for his appearance. . instruments or implements tended 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.
 Cu Unjieng e Hijos. for the same period. The following are immovable property: xxx xxx xxx (5) Machinery. This Court in interpreting a similar question raised before it in the case of Berkenkotter vs. notice thereof must be given as follows: xxx xxx xxx (c) In case of real property. All contrary to law. by L. the decision of the Court of Appeals sought to be reviewed is hereby set aside and We declare that the issuance of the writ of execution in this case against the sawmill machineries and equipments purchased by petitioner Pastor D. and in one published in the Spanish language. After due consideration of all the proofs presented and the arguments of counsel the trial court found the defendant guilty of the crime charged and sentenced him to one year eight months and twenty-one days' presidio correccional. Paraphrasing language of said decision we hold that by the installment of the sawmill machineries in the building of the Gold Pacific Sawmill. Inc. in the city of Manila. 16 of Rule 39 of the Rules of Court. or that this defendant has committed any crime. and. Ago had purchased the sawmill machineries and equipments he assigned the same to the Golden Pacific Sawmill. to the damage and prejudice of the said Manila Electric Railroad and Light Company in the said sum of nine hundred and nine (909) pesos and twenty (20) cents Philippine currency. thus: ART. First Instance. Philippine Islands. 183 of the Philippine Commission. without the consent of the owner thereof. — Before the sale of property on execution.
 Acting Attorney-General Harvey for appellee. Jenkins on the 4th of March and placed in the hands of the sheriff. as amended by section 2 of Act No. IGNACIO CARLOS. Considering that the machineries and equipments in question valued at more than P15. WHEREFORE. SOUTWORTH. From this judgment the defendant appealed and makes the following assignments of error: I. a corporation doing business in the Philippine Islands. as required in Sec. 683. by publishing a copy of the notice once a week. Judge. Southworth. prosecuting attorney for the city of Manila. and carry away two thousand two hundred and seventy-three (2. Inc. did then and there.26. the property of the Manila Electric Railroad and Light Company. 1910. 415. take. having examined the witness under oath. 612 of the Philippine Commission. 6295 September 1. and between the 13th day of February. On the 14th of the same month counsel for the defendant demurrer to the complaint on the following grounds: 1 That the court has no jurisdiction over the person of the accused nor of the offense charged because the accused has not been accorded a preliminary investigation or examination as required by law and no court. the said sawmill machineries and equipment became real estate properties in accordance with the provision of Art.
 A warrant for the arrest of the defendant was issued by the Honorable J. converting the said machineries and equipments into real estate within the meaning of Article 415(5) above-quoted of the Civil Code of the Philippines. M. are null and void. if there be one. Inc.
 D.546 pesetas Philippine currency. for use in connection with the industry carried by the company. G. 1910. if the assessed value of the property exceeds four hundred pesos. in some newspaper published or having general circulation in the province. 415 (5) of the Civil Code.. (Sgd. willfully. M. and which tend directly to meet the needs of the said industry or works. under my direction.
 Gibbs for appellant. and feloniously. steal . the sale made by the sheriff must be declared null and void. in the city of Manila.273) kilowatts of electric current. in the city of Manila. the said Ignacio Carlos. 2 That the facts charged do not constitute a public offense. By reason of such installment in a building. a plea of not guilty was entered by direction of the court for him and the trial proceeded. Judge. magistrate.00 appear to have been sold without the necessary advertisement of sale by publication in a newspaper. converted the said machinery and equipment into real estate by reason of their purpose. Ago from the Grace Park Engineering. in accordance with the provisions of section 39 of Act No. vs.
 Subscribed and sworn to before me this 4th day of March. defendant-appellant.) L. If there are newspapers published in the province in both the English and Spanish languages. M. and also where the property is to be sold. to the corresponding subsidiary imprisonment in case of insolvency and to the payment of the costs. committed as follows: That on. which is as follows: SEC. 1909. Prosecuting Attorney. receptacles. for use in the sawing of logs carried on in said building. Philippine Islands.) CHARLES LOBINGIER. C. Thereafter the sawmill machinery and equipments were installed in a building and permanently attached to the ground. or other competent authority has determined from a sworn complaint or evidence adduced that there is probable cause to believe that a crime has been committed.
 A preliminary investigation has heretofore been conducted in this case. during. 61 Phil. Notice of sale of property on execution. then a like publication for a like period shall be made in one newspaper published in the English language. The Manila Electric Railroad and Light Company. Prosecuting Attorney. A. with intent of gain and without violence or intimidation against the person or force against the thing. Inc.

and which was equipped. . for while the electrician called by the defense (Lanusa) testifies to the possibility of a difference between two such meters. We must also agree with the prosecuting attorney that the attending circumstances do not strengthen the story told by the boy. The court erred in not declaring that the plaintiff consented to the taking of the current. has no interest in the matter whatsoever. 968. approached the cabinet in which the "jumper" was found. Is there any other "satisfactory explanation" of the "jumper's" presence? The only one sought to be offered is the statement by the son of the accused. 122). an employee of the Light Company. to accept the boy's story we must believe that this company or its representatives deliberately conspired not merely to lure the defendant into the commission of a crime but to fasten upon him a crime which he did not commit and thus convict an innocent man by perjured evidence. that the latter would have been likely to call out at the time he saw the "jumper" being placed in the drawer. as we have seen. Where the only two witnesses who are supposed to know anything of the matter thus contradict each other this item of testimony by the officer is of more than ordinary significance." The result of this registration therefore is that while the outsider meter (Exhibit A) showed a consumption in defendant's building of 2. It is undisputed that the current which supplied the house passed through both meters and the city electrician testifies that each meter was tested on the date of the last reading and was "in good condition. Rep. Upon this point the trial court said: For considerably more than a year previous to the filing of this complaint the accused had been a consumer of electricity furnished by the Manila Electric Railroad and Light Company for a building containing the residence of the accused and three other residences. and the accused fails to explain why he should have had thirty lights installed if he needed but four or five. the representatives of the company. The court erred in declaring the accused to be guilty. the difference is more than 900 per cent. There is. Exhibit B. We are. according to the defendant's electrician. with thirty electric lights. vs. and such possession. unable to consider as satisfactory defendant's explanation of the "jumper's" presence. accordingly. There is a further evidence that the consumption of 223 kilowatt hours. installed an additional meter (Exhibit A) on a pole outside of defendant's house.718 kilowatt hours and Exhibit B. The boy is the only witness who so testifies and Porter himself squarely denies it. including the accused. was after a through examination and due consideration. according to the outside meter. that he saw the "jumper" placed there by the witness Porter. Besides. and perhaps one or two others. Here. Exhibit A read 218 kilowatt hours. We do not think that the officer's declination to wait until defendant should secure a notary public shows bias. as he says. V. S. the officer's attention was called to the defendant's appearance and the former noticed that the latter was becoming nervous. VI. the outside meter should normally run faster. The presence of such an official was neither required nor authorized by law and the very efficacy of a search depends upon its swiftness. No sufficient reason is presented why we should not follow the doctrine enunciated in that case. This is officer Hartpence. would be merely pecuniary. was more than ten times as great as that registered by the one inside. IV. and there is other testimony that there were marks on the insulation of the meter Exhibit B which showed the use of such a device. raises the presumption that the accused was the owner of a device whose only use was to deflect the current from the meter. The court erred in declaring that electrical energy may be stolen. believing that more light was being used than their meter showed. who executed the search warrant. decided adversely to appellant's contention in the case of U. 1910 each was read again. and both it and the meter (Exhibit B) which had been previously installed in the house were read on said date. under the Code of Civil Procedure. section 334 (10). All agree that the "jumper" (Exhibit C) was found in a drawer of a small cabinet in the room of defendant's house where the meter was installed and not more than 20 feet therefrom. Obviously this difference could not be due to normal causes. and in overruling his demurrer for the same reason. It seems to us that his natural desire to shield his father would far outweight any interest such an employee like Porter would have and which. Exhibit A showing 2. II. This is a much more serious charge than that contained in the complaint and should be supported by very strong corroborating circumstances which we do not find here. On March 3. at most. for if. until the latter was called by the officer. his wife and son. a boy of twelve years.. according to the defendant's testimony. 745 kilowatt hours. III. On the strength of this showing a search warrant was issued for the examination of defendant's premises and was duly served by a police officer (Hartpence). The question raised in the second assignment of error is purely one fact. In the absence of a satisfactory explanation this constituted possession on defendant's part. He was accompanied at the time by three employees of the Manila Electric Railroad and Light Company. The court erred in finding the accused guilty of more than one offense. 1909. On March 15. while according to the test made in this case the inside meter (Exhibit B) ran the faster. he places the extreme limit of such difference between them 5 per cent.500 kilowatt hours of electricity. however. He testifies that after inspecting other articles and places in the building as he and the other spectators. Finally. this inside meter (Exhibit B) showed but 223 kilowatt hours. The court erred in condemning the accused to pay P865. Exactly the same question as that raised in the first assignment of error. the "jumper" was placed in the cabinet for the first time by Porter there would be no occasion for any change of demeanor on the part of the accused.The court erred in overruling the objection of the accused to the jurisdiction of the court. The city electrician also testifies that the electric current could have been deflected from the inside meter by placing thereon a device known as a "jumper" connecting the two outside wires.26 to the electric company as damages. one witness whom so far as appears. and he found there the accused. in view of the evidence submitted. There is a sharp conflict between the several spectators on some points but on one there is no dispute. as the accused claims. or at least directed his father's attention to it immediately instead of waiting. registered by the inside meter would not be a reasonable amount for the number of lights installed in defendant's building during the period in question. In other words the actual consumption. We can not agree with counsel for the defense that the boy's interest in the outcome of this case is less than that of the witness for the prosecution. because he was not given a preliminary investigation as required by law. The only alternative is the conclusion that the "jumper" was placed there by the accused or by some one acting for him and that it was the instrument by which the current was deflected from the matter Exhibit B and the Light Company deprived of its lawful compensation.
 Grant and Kennedy (18 Phil.

Both meters were again read on March 3. All this being proved to have been done by her secretly and with intent to deprive the company of their property and to appropriate it to her own use. and April 1. The fourth assignment of error is. 34 Minn. clearly constitutes the crime of larceny. that the defendant is criminally responsible for the taking of the whole amount. is a valuable article of merchandise. even in the absence of a statute so providing. 308.
 Shaw. The taking of this current continued over a period of one year. note 10. a fluid used for lighting. It is true that electricity is no longer. Article 517 of the Penal Code above referred to reads as follows: The following are guilty of larceny: (1) Those who with intent of gain and without violence or intimidation against the person. shall take another's personal property without the owner's consent. and no mutual understanding between the company and the defendant. C. susceptible of being severed from a mass or larger quantity. 3 C. L. 1909. There is no pretense that the accused was solicited by the company or any one else to commit the acts charged. He appealed to the Court of First Instance. may be seen and felt. C. is confirmed by the rule laid down in the decisions of the supreme court of Spain January 20. Rep. instead of making one revolution in every four seconds. movable. A. supra.
 Genato (15 Phi. Genato was charged in the municipal court with a violation of a certain ordinance of the city of Manila. bought and sold like other personal property and is capable of appropriation by another.After a careful examination of the entire record we are satisfied beyond peradventure of a doubt that the proofs presented fully support the facts as set forth in the foregoing finding. Manila. An appeal was taken from the judgment of the Court of First Instance to the Supreme Court on the ground that the ordinance in question was null and void. and no measures of inducement of any kind were employed by the company for the purpose of leading the defendant into temptation. Queen vs. and April 1. was using a contrivance known as a "jumper" on the electric meter installed by the Manila Electric Railroad and the Light Company. January 20. there are numerous cases holding that such acts do not constitute such consent as would relieve the taker of criminal responsibility. or force against things. It could not stop the misappropriation without cutting off the current entirely. like those of gas. the difference in consumption during this time being 2. at any time the defendant desired to use them. and also to show that electricity is an unknown force and can not be a subject of larceny. thereby giving the defendant an opportunity to continue the misppropriation. It is true. less twelve days. that larceny is not committed when the property is taken with the consent of its owner. 172. It is also contended that since the "jumper" was not used continuously. such "consent. and read 218 kilowatt hours. or five lights. said: There is nothing in the nature of gas used for illuminating purposes which renders it incapable of being feloniously taken and carried away. We have been unable to find a well considered case holding contrary opinion under similar facts. and which had some..
 Shaw. knew of this misappropriation and consented thereto. if not daily. S. and no knowledge by the defendant that the company wished him to take the current. The outside meter was installed on March 15. after holding that said ordinance was valid. construing and enforcing the provisions of articles 530 and 531 of the penal code of that country. In the present case it appears that it was the property of the Boston Gas Light Company. Commonwealth vs. as formerly.
 White. 2. 154 Escolta. p. So no error was committed by the trial court in holding that electricity is a subject of larceny. that it was in their possession by being confined in conduits and tubes which belonged to them. chattels. (Decisions of supreme court of Spain. not well founded. as a general proposition. regarded by electricians as a fluid. 221.718 kilowatt hours while the one on the inside only showed 968. the owner of the store situated at No. 170) the defendant.. although trifling. the Manila Electric Road and Light Company. 213. 1897. It is a valuable article of merchandise. the right of ownership of electric current is secured by articles 517 and 518 of the Penal Code. speaking through Chief Justice Bigelow. Counsel for the appellant insists that the only corporeal property can be the subject of the crime of larceny. registered one in seventy-seven seconds. the application of these articles in case of subtraction of gas. The true test of what is a proper subject of larceny seems to be not whether the subject is corporeal. articles identical with articles 517 and 518 of the code in force in these Islands. In the U. 12.) In the case of Commonwealth vs. no doubt. 222 III. as claimed by the defendant that he used during the most of this time. and the outside one showed 2. 234. 1 C. It is." But under the facts in the case at bar it is not difficult to reach a conclusion that the acts performed by the plaintiff company did not constitute a consent on its part the defendant take its property. & K. State vs. It is well-settled that illuminating gas may be the subject of larceny. 7 L. On the same day the inside meter was read and showed 745 kilowatt hours. in law. Woods vs. was again tried and sentenced to pay the same fine. Rep. true that the defendant did not allow the "jumper" to remain in place continuously for any number of days as the company inspected monthly the inside meter. N. 520. It is true that the only question directly presented was of the validity of the city ordinance. As a result of the use of this "jumper" the meter. It could not reduce the current so as to just furnish sufficient for the lighting of two. the defendant committed not a single offense but a series of offenses. and that the defendant severed a portion of that which was in the pipes of the company by taking it into her house and there consuming it. Assuming that the company read both meters at the end of each month. 1910. 1887..
 Wellman. said: Even without them (ordinances). The original design to misappropriate this current was formed by the defendant absolutely independent of any acts on the part of the company or its agents. and that t continued to furnish the current. supra.. 11 Cox C. W. for the reason that the complaining party. At most there was a mere passive submission on the part of the company that the current should be taken and no indication that it wished it to be taken. 1897.277 kilowatt hours. intrinsic value. after the first month. and was sentenced to pay a fine of P200. no doubt. still. 385. thereby reducing the current approximately 95 per cent. therefore.. 1887. So the "jumper" was put on and taken off at least monthly. vs. also (England) Queen vs. The company had a contract with the defendant to furnish him with current for lighting purposes. something which could be taken in possession and carried away. three. 363. but...
 People. 4 Allen (Mass). we think.. in order to avoid detection.277 kilowatt hours. the same as gas. that it knew the defendant was misappropriating the current to that extent.
 Firth. 6 Cox C. and in some respects resembling electricity. but the current must always be sufficiently strong to furnish current for the thirty lights. and 25 Cyc. 293. C.. R. And article 518 fixes the penalty for larceny in proportion to the value of the personal property stolen. Electricity. bought and sold like other personal property.. and in the support of this proposition cites several authorities for the purpose of showing that the only subjects of larceny are tangible. but its manifestation and effects. and no preconcert whatever between him and company. The court. and of being transported from place to place. but whether it is capable of appropriation by another than the owner. R. It is urged in support of the fourth assignment of error that if it be true that the appellant did appropriate to his own use the electricity as charged he can not be held guilty of larceny for any part of the electricity thus appropriated. It may be difficult in some instances to determine whether certain acts constitute. and while the "jumper" was off the defendant was not misappropriating . the court.

HON. L. The covering of the entire period by one charge has been beneficial. 758 of Wharton's Criminal Law. 234.651. one for each month.
 Macaspac (12 Phil. The defendant called upon Marcelina. according to the provisions of section 10 of General Orders. and between the 13th day of February. and turned off at night. 58. committed as follows: On or about September 10-19.2 Petitioner filed a "Motion to Quash (with Motion to Defer Arraignment). which in any case would only affect form of the complaint. steal. which is a method of routing and completing international long distance calls using lines. The Government had no opportunity to amend or correct this error. 1 C. In the case of U. that if the pipe always remained full. Thus. and the accused ought to have raised the point before the trial began. In the above-quoted Decision. filed with the Regional Trial Court of Makati City. The Regional Trial Court is directed to issue an order granting the motion of the petitioner to quash the Amended Information. as it was substantially all one transaction. The Amended Information charged the accused with theft under Article 308 of the Revised Penal Code. vs. petitioner filed the instant petition for review with this Court. effectively stealing this business from PLDT while using its facilities in the estimated amount of P20. The defendant was moved by one impulse to appropriate to his own use the current. Cited on p. with costs against the appellant. No. 1999. It maintains that the Amended Information charging petitioner with theft is valid and . if error at all. (Regina vs. vol. in the said amount. Respondent Philippine Long Distance Telephone Company (PLDT) filed a Motion for Reconsideration with Motion to Refer the Case to the Supreme Court En Banc. ZEUS C. can not justify a reversal of the judgment appealed from. unlawfully. Apart from the fact that the defense does not pretend that any of the essential rights of the accused have been injured. again.. the defendant received from one Joquina Punu the sum of P31. . and is not now entitled to raise for the first time any question in reference thereto when submitting to this court her assignment of errors. it must be understood that has waived such objection. believing that Joaquina had sent for it. The gas from this pipe was burnt every day. which drew off the gas from the main without allowing it to pass through the meter. and within the jurisdiction of this Honorable Court. The prosecuting attorney elected to cover the entire period with one charge and the accused having been convicted for this offense. because it is merely a defect of form easily remedied. if anything. Branch 150. . Counsel for the defendant insisted that the complaint charged his client with two different crimes of estafa in violation of section 11 of General Orders. this Court’s First Division rendered judgment in this case as follows: IN LIGHT OF ALL THE FOREGOING. the taking would have been continuous. willfully. In the case at bar it is not pointed out wherein any of the essential rights of the defendant have been prejudiced by reason of the fact that the complaint covered the entire period. and the 3d of March. 155076 January 13. and feloniously take. and the means adopted by him for the taking of the current were in the execution of a general fraudulent plan. the sum total of the penalties imposed might have been very much greater than that imposed by the court in this case. ABROGAR.50. RESOLUTION YNARES-SANTIAGO. Had this been done.. No. 11 Cox C. a continuous taking of the gas and not a series of separate talkings. there was. and in the same place. C. or prior thereto in Makati City. S. the allegation of the defect above alluded to. Branch 150. The complaint alleged that the defendant did on. 10th ed. SO ORDERED. Petitioner’s special civil action for certiorari was dismissed by the Court of Appeals.: On February 27. It was substantially one continuous act. In disposing of this question this court said: The said defect constitutes one of the dilatory pleas indicated by section 21. The trial court denied the Motion to Quash the Amended Information. R. 1910. Petitioner. cables. in the same manner. this Court held that the Amended Information does not contain material allegations charging petitioner with theft of personal property since international long distance calls and the business of providing telecommunication or telephone services are not personal properties under Article 308 of the Revised Penal Code. 26).370. 1.. Inasmuch as in the first instance the accused did not make the corresponding dilatory plea to the irregularity of the complaint. J. No demurrer was presented against this complaint on the ground that more than one crime was charged. The pipe was never closed at this junction with the main. G. 1909. did then and there willfully. same is hereby affirmed. Then. petitioner is one of the accused in Criminal Case No. he can not again be prosecuted for the stealing of the current at any time within that period. It was held also that even if the pipe had not been kept full. No. as well petitioner’s subsequent Motion for Reconsideration. steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR). although the "jumper" might have been removed and replaced daily or monthly. .1 By way of brief background. and carry away 2. It was held. and not prejudicial to the rights of the defendant. but instead of delivering the said amount she asked Marcelina for P30 in the name of Joaquina who had in no way authorized her to do so. The assailed Orders of the Regional Trial Court and the Decision of the Court of Appeals are REVERSED and SET ASIDE.277 kilowatts of electric current of the value of P909. vs.
 Firth. PEOPLE OF THE PHILIPPINES & PHILIPPINE LONG DISTANCE TELEPHONE COMPANY Respondents.92 to the damage and prejudice of PLDT. during. 992425. with intent to gain and without the knowledge and consent of the Philippine Long Distance Telephone (PLDT). If twelve distinct and separate complaints had been filed against the defendant.the current..) The value of the electricity taken by the defendant was found by the trial court to be P865. 58. 172. we are of the opinion that the charge was properly laid. 2009 LUIS MARCOS P. So no error was committed in sentencing the defendant to indemnify the company in this amount. in fact. The electricity was stolen from the same person. the accused. CONTRARY TO LAW. Makati City." on the ground that the factual allegations in the Amended Information do not constitute the felony of theft. 2006. the petition is GRANTED. and consequently always remained full of gas.R. or to suffer the corresponding subsidiary imprisonment in case of insolvency. and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined. This finding is fully in accordance with the evidence presented. Marcelina gave her P30. Presiding Judge of the Regional Trial Court. C. conspiring and confederating together and all of them mutually helping and aiding one another.26. Rep. with the request to deliver it to Marcelina Dy-Oco. the complaint might have been amended in time. The judgment being strictly in accordance with the law and the merits of the case. A person stole gas for the use of a manufactory by means of pipe. LAUREL. unlawfully and feloniously take. antenae.

capable of appropriation can be the object of theft. hence." the same may not be subject of theft. The charge of theft as alleged in the Information should be taken in relation to RA 8484 because it is the elements. are personal property. the definition of the term "personal property" in the penal code provision on theft had been established in Philippine jurisprudence. for personal profit or gain. In Article 335 of the Civil Code of Spain. corporeal or incorporeal. and not the designation of the crime. 8484 or the Access Device Regulations Act of 1998 and RA 8792 or the Electronic Commerce Act of 2000 does not preclude prosecution under the Revised Penal Code for the crime of theft. He also insists that "business" is not personal property. service and business. It is not synonymous to electric current or impulses. since the passage of the Revised Penal Code on December 8. This Court. Tambunting. Considering the gravity and complexity of the novel questions of law involved in this case. The enumeration of real properties in Article 415 of the Civil Code is exclusive such that all those not included therein are personal properties. which means to deprive the lawful owner of the thing. and (5) that the taking be accomplished without the use of violence against or intimidation of persons or force upon things. The latter embraces unauthorized appropriation or use of PLDT’s international calls. Moreover. Since Article 308 of the Revised Penal Code used the words "personal property" without qualification. 6 In fact. shall take personal property of another without the latter’s consent. There must be intent to appropriate. (2) that said property belongs to another. the theft provision in the Revised Penal Code was deliberately couched in broad terms precisely to be all-encompassing and embracing even such scenario that could not have been easily anticipated. tangible or intangible." the sole requisite being that the object should be capable of "appropriation. and United States v. and have been adopted by the legislature as having a certain meaning prior to a particular statute. 308. Even assuming that the correct indictment should have been under RA 8484. – Theft is committed by any person who. with intent to gain but without violence against. Neither did it provide a restrictive definition or an exclusive enumeration .
 Tambunting. It is not the "business" that is protected but the "right to carry on a business. The elements of theft under Article 308 of the Revised Penal Code are as follows: (1) that there be taking of personal property. We resolve to grant the Motion for Reconsideration but remand the case to the trial court for proper clarification of the Amended Information. the Special First Division resolved to refer the same to the Banc. According to the OSG. the quashal of the information would still not be proper. Who are liable for theft." of withholding it with the character of permanency.
 Genato. United States v. Thus. Carlos. it may not be considered as personal property susceptible of appropriation. the special laws punish the surreptitious and advanced technical means employed to illegally obtain the subject service and business. the term "personal property" has had a generally accepted definition in civil law.5 which recognized intangible properties like gas and electricity as personal properties. international telephone calls were in existence. Prior to the passage of the Revised Penal Code on December 8. Article 416(3) of the Civil Code deems "forces of nature" (which includes electricity) which are brought under the control by science. Hence. It only provides the facilities or services for the transmission and switching of the calls.3 United States v. in United States v. that it identifies the international calls and business of providing telecommunication or telephone service of PLDT as the personal properties which were unlawfully taken by the accused. Petitioner claims that the analogy between generated electricity and telephone calls is misplaced. the words used in such statute should be construed according to the sense in which they have been previously used. Genato. the "international phone calls" which are "electric currents or sets of electric impulses transmitted through a medium.
 Carlos4 and United States v. that control. According to respondent. may be the subject of theft under Article 308 of the Revised Penal Code. that it states the names of all the accused who were specifically charged with the crime of theft of PLDT’s international calls and business of providing telecommunication or telephone service on or about September 10 to 19. it follows that all "personal properties" as understood in the context of the Civil Code." This right is what is considered as property. On the other hand. there is no basis for this Court’s finding that the Legislature could not have contemplated the theft of international telephone calls and the unlawful transmission and routing of electronic voice signals or impulses emanating from such calls by unlawfully tampering with the telephone device as within the coverage of the Revised Penal Code. and carry a pattern representing the human voice to a receiver. PLDT also argues that "taking" in relation to theft under the Revised Penal Code does not require "asportation. PLDT further insists that the Revised Penal Code should be interpreted in the context of the Civil Code’s definition of real and personal property. PLDT does not produce or generate telephone calls. Cognizant of the definition given by jurisprudence and the Civil Code of Spain to the term "personal property" at the time the old Penal Code was being revised. or intimidation of persons nor force upon things. Article 308 of the Revised Penal Code provides: Art. PLDT alleges that the international calls and business of providing telecommunication or telephone service are personal properties capable of appropriation and can be objects of theft. (3) that the taking be done with intent to gain. (4) that the taking be done without the consent of the owner. Carlos. petitioner Laurel claims that a telephone call is a conversation on the phone or a communication carried out using the telephone. 1930. the term "personal properties" under Article 308 of the Revised Penal Code is not limited to only personal properties which are "susceptible of being severed from a mass or larger quantity and of being transported from place to place. and that it satisfies the test of sufficiency as it enabled a person of common understanding to know the charge against him and the court to render judgment properly. Since the services of PLDT cannot be considered as "property." are personal properties which may be subject of theft. this Court used the Civil Code definition of "personal property" in interpreting the theft provision of the penal code in United States v. are deemed incorporated in our penal laws. "personal property" is defined as "anything susceptible of appropriation and not included in the foregoing chapter (not real property). prosecution under Republic Act (RA) No. 1930.sufficient. in which they are used. may be proper subjects of theft. In his Comment to PLDT’s motion for reconsideration." The element of "taking" referred to in Article 308 of the Revised Penal Code means the act of depriving another of the possession and dominion of a movable coupled with the intention. at the time of the "taking. still the legislature did not limit or qualify the definition of "personal property" in the Revised Penal Code. consistently ruled that any personal property." Thus. It noted that the cases of United States v." PLDT likewise alleges that as early as the 1930s. to the prejudice of PLDT as owner thereof. The Office of the Solicitor General (OSG) agrees with respondent PLDT that "international phone calls and the business or service of providing international phone calls" are subsumed in the enumeration and definition of personal property under the Civil Code hence. the term "personal property" in the Revised Penal Code should be interpreted in the context of the Civil Code provisions in accordance with the rule on statutory construction that where words have been long used in a technical sense and have been judicially construed to have a certain meaning. Moreover. 1999 in Makati City by conducting ISR or International Simple Resale.

or assignor. for any purpose whatsoever. mortgagor. it may be appropriated. In Strochecker v. and the existence in any building premises of any such device shall. the act of conducting ISR operations by illegally connecting various equipment or apparatus to private respondent PLDT’s telephone system. deface. Yet. mortgage. the right of the ownership of electric current is secured by articles 517 and 518 of the Penal Code. or substantially all. nor tap or otherwise wrongfully deflect or take any electric current from such wire. is confirmed by the rule laid down in the decisions of the supreme court of Spain of January 20. business should also be classified as personal property. 9 The word "take" in the Revised Penal Code includes any act intended to transfer possession which. containing. as held in United States v. wrongfully redirecting such forces of nature from such apparatus. of the business or trade theretofore conducted by the vendor. and April 1. x x x.of "personal property" in the Revised Penal Code. 10 use of a device to fraudulently obtain gas." 7 Jurisprudence is settled that to "take" under the theft provision of the penal code does not require asportation or carrying away." 14 In discussing the issue of ownership. articles 517 and 518 of the code in force in these islands. antennae. interest in business was declared to be personal property since it is capable of appropriation and not included in the enumeration of real properties. 1897. thereby showing its intent to retain for the term an extensive and unqualified interpretation. Business may be appropriated under Section 2 of Act No. or other apparatus installed or used for generating. as held in the cases of United States v. petitioner and respondent PLDT gave their respective explanations on how a telephone call is generated. and in some respects resembling electricity. 1887. In this regard.8 To appropriate means to deprive the lawful owner of the thing. It was further ruled that even without the above ordinance the acts of subtraction punished therein are covered by the provisions on theft of the Penal Code then in force. or measuring electricity. and United States v. No person shall. This is evident from its Comment where it defined the issue of this case as whether or not "the unauthorized use or appropriation of PLDT international telephone calls. could be object of theft: Section 2. or any sale." which is defined as "carrying away. Genato. The only requirement for a personal property to be the object of theft under the penal code is that it be capable of appropriation. telegraph or telephone service. reads as follows: Injury to electric apparatus. thus: Even without them (ordinance). 13 As can be clearly gleaned from the above disquisitions. Tambunting. or assignor. mutilate. or measuring electricity. As early as 1910. use or enjoy the benefits of any device by means of which he may fraudulently obtain any current of electricity or any telegraph or telephone service. or assignment of all. meter. is protected by the provisions on theft of the Penal Code. Any sale. respondent PLDT explains the process of generating a telephone call as follows: . a fluid used for lighting. In the instant case. wares. Following the ruling in Strochecker v. or other apparatus. The prosecution has taken the position that said telephone calls belong to respondent PLDT. may be committed through the use of the offenders’ own hands. and/or air wave frequency and connecting these calls directly to the local or domestic exchange facilities of the country where destined. as well as any mechanical device. 15 For its part. provisions. transfer. or substantially all. conducting.
zw+ Consequently. constitutes theft. Ramirez. for the purpose of generating personal profit or gain that should have otherwise belonged to PLDT. In the instant case. and (c) using or enjoying the benefits of any device by means of which one may fraudulently obtain any current of electricity or any telegraph or telephone service. or using any device to fraudulently obtain such forces of nature. meter. transferor. the application of these articles in cases of subtraction of gas. service and facilities.11 As illustrated in the above cases. meter. petitioner was charged with engaging in International Simple Resale (ISR) or the unauthorized routing and completing of international long distance calls using lines. committed by means of the unlawful use of the latter’s facilities. or all. mortgagor. the Court declared in Genato that ownership over electricity (which an international long distance call consists of). United States v. construing and enforcing the provisions of articles 530 and 531 of the Penal Code of that country.12 this Court stated: With regard to the nature of the property thus mortgaged which is one-half interest in the business above described. which was involved in the said case. transferor. A perusal of the records of this case readily reveals that petitioner and respondent PLDT extensively discussed the issue of ownership of telephone calls. or other apparatus installed or used for generating. any property which is not included in the enumeration of real properties under the Civil Code and capable of appropriation can be the subject of theft under the Revised Penal Code. such as an access device or card as in the instant case. the Amended Information inaccurately describes the offense by making it appear that what petitioner took were the international long distance telephone calls. hence. Ramirez. such interest is a personal property capable of appropriation and not included in the enumeration of real properties in article 335 of the Civil Code. – No person shall destroy. The acts of "subtraction" include: (a) tampering with any wire. (b) tapping or otherwise wrongfully deflecting or taking any electric current from such wire. mortgagor. transferor or assignor. Carlos. transfer. it is therefore personal property. mortgage. shall be deemed to be a sale and transfer in bulk. be deemed sufficient evidence of such use by the persons benefiting thereby. through which petitioner is able to resell or re-route international long distance calls using respondent PLDT’s facilities constitutes all three acts of subtraction mentioned above. of the fixtures and equipment used in and about the business of the vendor. in contemplation of the Act. The pertinent provision of the Revised Ordinance of the City of Manila. or materials otherwise than in the ordinary course of trade and the regular prosecution of the business of the vendor.1avvphi1. conducting. Since it is not included in the exclusive enumeration of real properties under Article 415. Menagas. Tapping current. cables. appropriation of forces of nature which are brought under control by science such as electrical energy can be achieved by tampering with any apparatus used for generating or measuring such forces of nature. This includes controlling the destination of the property stolen to deprive the owner of the property. in the absence of satisfactory explanation. or otherwise injure or tamper with any wire. Court of Appeals. Article 414 of the Civil Code provides that all things which are or may be the object of appropriation are considered either real property or personal property. The business of providing telecommunication or telephone service is likewise personal property which can be the object of theft under Article 308 of the Revised Penal Code. merchandise. and the use of a jumper to divert electricity. or assignment of a stock of goods. and may be the subject of mortgage. petitioner’s acts constitute theft of respondent PLDT’s business and service. as well as telephone service. containing. such as the use of a meter tampering. Interest in business was not specifically enumerated as personal property in the Civil Code in force at the time the above decision was rendered. or other apparatus. It need not be capable of "asportation. Just like interest in business. Business is likewise not enumerated as personal property under the Civil Code. rather than respondent PLDT’s business. meter. as held in the assailed Decision. telegraph or telephone service. as held in Natividad v. Evidence. 3952 (Bulk Sales Law). however.

take the form of electrical energy. The purpose of the amendment is simply to ensure that the accused is fully and sufficiently apprised of the nature and cause of the charge against him. using its facilities. enhances. decodes and transmits said calls using its complex communications infrastructure and facilities. this case must be remanded to the trial court and the prosecution directed to amend the Amended Information. Japan) reaches private respondent PLDT’s network. the human voice is converted into electrical impulses or electric current which are transmitted to the party called. To be sure. augments. and thus guaranteed of his rights under the Constitution. which would have called for the dismissal of the information under Rule 110. which denied the Motion to Quash (With Motion to Defer Arraignment) in Criminal Case No. this amendment is not necessitated by a mistake in charging the proper offense. again. The role of telecommunication companies is not limited to merely providing the medium (i. once the electronic impulses or electric current originating from a foreign telecommunication company (i. the Amended Information describes the thing taken as. Section 14 and Rule 119. it is not true that the foreign telecommunication company provides (1) the electric current which transmits the human voice/voice signal of the caller and (2) the electric current for the called party to receive said human voice/voice signal. ACCORDINGLY. "international long distance calls. Only after such process of conversion will the resulting electronic impulses be transmitted by a telecommunication company. Electricity is personal property under Article 416 (3) of the Civil Code." 17 Indeed. 68841 affirming the Order issued by Judge Zeus C. the motion for reconsideration is GRANTED. private respondent PLDT). PLDT not being the owner of said telephone calls. Before the human voice/voice signal can be so transmitted.e. it is the latter which decodes. 99-2425 for theft. the human voice/voice signal of the calling party will never reach the called party. is electrical energy." the matter alleged to be stolen in the instant case. through the use of its facilities. which enumerates "forces of nature which are brought under control by science. Section 19 of the Revised Rules on Criminal Procedure. SO ORDERED. must first break down or decode the human voice/voice signal into electronic impulses and subject the same to further augmentation and enhancements. Japan) reaches the Philippines through a local telecommunication company (i.38. Abrogar of the Regional Trial Court of Makati City. Parenthetically. a telecommunication company. PLDT merely encodes. It was also held in the assailed Decision that intangible property such as electrical energy is capable of appropriation because it may be taken and carried away. therefore. Upon reaching the destination of the call. it is private respondent PLDT which decodes. and the act of engaging in ISR is an act of "subtraction" penalized under said article. augments and enhances the electronic impulses back to the human voice/voice signal and provides the medium (i. once the electronic impulses originating from a foreign telecommunication company country (i. It is the use of these communications facilities without the consent of PLDT that constitutes the crime of theft. which is the unlawful taking of the telephone services and business. the business of providing telecommunication and the telephone service are personal property under Article 308 of the Revised Penal Code. 40.e. Thus. The case is remanded to the trial court and the Public Prosecutor of Makati City is hereby DIRECTED to amend the Amended Information to show that the property subject of the theft were services and business of the private offended party. Moreover.e. 16 In the assailed Decision. However. The Decision of the Court of Appeals in CA-G. the electric current) through which the human voice/voice signal of the caller is transmitted. Without private respondent PLDT’s network.R. In other words. The assailed Decision dated February 27. a telecommunication company both converts/reconverts the human voice/voice signal and provides the medium for transmitting the same. to clearly state that the property subject of the theft are the services and business of respondent PLDT. it was conceded that in making the international phone calls. in the case of an international telephone call. electric current) to enable the called party to receive the call. Thus. 39. A telephone call. is AFFIRMED.e." and only later mentions "stealing the business from PLDT" as the manner by which the gain was derived by the accused. Branch 150.e. the crime is properly designated as one of theft. it cannot be said that such international long distance calls were personal properties belonging to PLDT since the latter could not have acquired ownership over such calls. SP No. while it may be conceded that "international long distance calls. the telecommunication company will again break down or decode the electronic impulses back to human voice/voice signal before the called party receives the same. . augments and enhances the electronic impulses back to the human voice/voice signal and provides the medium (i. then it could not validly claim that such telephone calls were taken without its consent. electric current) to enable the called party to receive the call.e. Therefore. 2006 is RECONSIDERED and SET ASIDE. In order to correct this inaccuracy of description. contrary to petitioner Laurel’s assertion.