PUNSALAN, JR. V. VDA. DE LACSAMANA G.R. No.

L-55729 March 28, 1983

FACTS:
Punsalan was the owner of a piece of land, which he mortgaged in favor of PNB. Due to his failure
to pay, the mortgage was foreclosed and the land was sold in a public auction to which PNB was
the highest bidder.
On a relevant date, while Punsalan was still the possessor of the land, it secured a permit for the
construction of a warehouse.
A deed of sale was executed between PNB and Punsalan. This contract was amended to include
the warehouse and the improvement thereon. By virtue of these instruments, respondent
Lacsamana secured title over the property in her name.
Petitioner then sought for the annulment of the deed of sale. Among his allegations was that the
bank did not own the building and thus, it should not be included in the said deed.
Petitioners complaint was dismissed for improper venue. The trial court held that the action
being filed in actuality by petitioner is a real action involving his right over a real property.
ISSUE:
W/N the trial court erred in dismissing the case on the ground of improper venue.
W/N the warehouse is an immovable and must be tried in the province where the property lies.
HELD:
Warehouse claimed to be owned by petitioner is an immovable or real property. Buildings are
always immovable under the Code. A building treated separately from the land on which it is
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.
PRUDENTIAL BANK V. PANIS 153 SCRA 390
FACTS:
Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their house,
which was being rented by Madrigal and company. This was executed to guarantee a loan,
payable in one year with a 12% per annum interest. The mortgage was extrajudicially foreclosed
upon failure to pay the loan. The house was sold at a public auction and the plaintiffs were the
highest bidder. A corresponding certificate of sale was issued. Thereafter, the plaintiffs filed an
action for ejectment against the defendants, praying that the latter vacate the house as they
were the proper owners.
ISSUE:
WHETHER OR NOT THE SUBJECT MATTER OF THE MORTGAGE, AHOUSE OF STRONG MATERIALS,
BE THE OBKECT OF A CHATTELMORTGAGE?
HELD:
Certain deviations have been allowed from the general doctrine that buildings are immovable
property such as when through stipulation, parties may agree to treat as personal property those
by their nature would be real property. This is partly based on the principle of estoppel wherein
the principle is predicated on statements by the owner declaring his house as chattel, a conduct
that may conceivably stop him from subsequently claiming otherwise. In the case at bar, though
there be no specific statement referring to the subject house as personal property, yet by ceding,
selling or transferring a property through chattel mortgage could only have meant that
defendant conveys the house as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by claiming otherwise.
Leung Yee v Strong Machinery Co., 37 Phil 644
FACTS:

The "Compania Agricola Filipina" purchased from "Strong Machinery Co." rice-cleaning machines
which the former installed in one of its buildings. As security for the purchase price, the buyer
executed a CHATTEL MORTGAGE on the machines and the building on which they had been
installed. Upon buyer's failure to pay, the registered mortgage was foreclosed, and the building
was purchased by the seller, the "Strong Machinery Co." This sale was annotated in the Chattel
Mortgage Registry. Later, the "Agricola" also sold to "Strong Machinery" the lot on which the
building had been constructed. This sale was not registered in the Registry of Property but the
Machinery Co. took possession of the building and the lot.
Previously however, the same building has been purchases at a sheriff's sale by Leung Yee, a
creditor of Agricola, although Leung Yee knew all the time of the prior sale in favor of "Strong
Machinery." The sale in favor of Leung Yee was recorded in the Registry. Leung Yee now sues to
recover the property from "Strong Machinery."
ISSUE:
Who has a better right to the property?
HELD:
The building is real property, therefore, its sale as annotated in the Chattel Mortgage Registry
cannot be given the legal effect of registration in the Registry of Real Property. The mere fact that
the parties decided to deal with the building as personal property does not change its character
as real property. Thus, neither the original registry in the chattel mortgage registry, nor the
annotation in said registry of the sale of the mortgaged property had any effect on the building.
However, since the land and the building had first been purchased by "Strong Machinery" (ahead
of Leung Yee), and this fact was known to Leung Yee, it follows that Leung Yee was not a
purchaser in good faith, and should therefore not be entitled to the property. "Strong Machinery"
thus has a better right to the property.
Standard Oil Co. v. Jaranillo 44 Phil. 631
FACTS:
De la Rosa, who was renting a parcel of land in Manila, constructed a building of strong materials
thereon, which she conveyed to plaintiff Standard Oil Co. by way of chattel mortgage. When the
mortgagee was presenting the deed to the Register of Deeds of Manila for registration in the
Chattel Mortgage Registry, the Registrar refused to allow the registration on the ground that the
building was a real property, not personal property, and therefore could not be the subject of a
valid chattel mortgage.
ISSUE:
May the deed be registered in the chattel mortgage registry?
HELD:
Yes, because the Registrar's duty is MINISTERIAL in character. There is no legal provision
conferring upon him any judicial or quasi-judicial power to determine the nature of the document
presented before him. He should therefore accept the legal fees being tendered, and place the
document on record.
Navarro vs Pineda
Facts:
Defendant-appellants, Rufino Penida and his mother Juana Gonzales, borrowed a sum of money
payable on or before June 14, 1960 to the plaintiff Conrado Navarro. As a security, Rufino
executed a Deed of Real Estate and Chattel Mortgage. In the said mortgage his mother, by way
of Real Estate Mortgage pledge a parcel of land belonging to her. Rufino, on the other hand,
executed a Chattel mortgage of his two storey residential house made of G.I. sheet roofing,

sawali walls and wooden posts, and a truck. The said mortgages are contained in one
document, and were duly registered. However, the house was erected on the land of Attorney
Vicente Castro. After two extensions they failed to pay their obligation.

Issue:
Whether or Not, a house erected on a land that belongs to a third person may be the subject of a
chattel mortgage.
Ruling:
That the property subject of the controversy is a chattel since it was built on a rented land that
belongs to another. As such, it does not become immobilized by attachment, so as to make it a
real property. Moreover, the stipulation of the parties expressly states in the document that it is a
chattel. By express declaration of the parties in the contract, appellants are estopped from
claiming otherwise. However, this is good only insofar as the contracting parties are concerned.
With respect to third persons who are not parties to the contract, the house is considered as
immovable property.
LOPEZ v OROSA, JR., PLAZA THEATRE, INC.
The Building is an immovable by itself, separate and distinct from the land from which it is
attached.
FACTS:
Orosa invited Lopez to invest with him in building a theatre. Lopez supplied wood for the
construction of the said theatre. The materials totaled 62k but Orosa was only able to pay 20k
thus leaving a balance of almost 42k. Later on respondents acquired a bank loan of 30k, wherein
Luzon Surety Company as their surety and the land and buildings as mortgages. Petitioner sued
to collect the unpaid materials and was able to get a judgment against the respondents making
them jointly liable to pay the remaining amount. Also, he was able to obtain a material mans lien
on the building of the theatre. The stocks amounting to 42k shall be sold in public auction in case
the respondents default. Petitioner wasnt happy because he also wanted a lien on the land,
urging that the judgment lien should include it since the building and the land are inseparable.
ISSUE:
Whether or not the building and the land are inseparable and W/N petitioner can obtain a lien on
the land as well?
RULING:
NO to both! The contention that the lien executed in favor of the furnisher of the materials used
for the construction, repair or refection of a building is also extended to land on which the
construction was made is without merit, because while it is true that generally, real estate
connotes the land and the building constructed thereon, it is obvious that the inclusion of the
building, separate and distinct from the land in the enumeration (in the CC) of what may
constitute real properties could mean only one thing- that a building is by itself an immovable
property.
The preference to unregistered lien is only with respect to the real estate upon which the
refection or work was made. The material mans lien could be charged only to the building for
which the credit was made or which received the benefit of refection.
SIBAL v. VALDEZ
FACTS:

The deputy sheriff of Tarlac attached and sold to Valdez the sugarcane planted by the plaintiff.
The plaintiff asked for the redemption of the sugarcane. Valdez said that it cannot be subject to
redemption because it is a personal property.
ISSUE:
WON the sugarcane in question is a personal or real property.
HELD:
Sugarcane is under real property as ungathered products. The Supreme Court of Louisiana
provided that standing crops are considered as part of the land to which they are attached but
the immovability provided for is only one in abstract. The existence of a right on the growing
crop is mobilization by anticipation, a gathering as it were in advance, rendering the crop
movable quoad the right acquired therein.
-A crop raised on leased premises in no sense forms part of the immovable. It belongs to the
lessee and may be sold by him.
-Act 1508 (Chattel Mortgage Law) recognize growing crops as personal property.
Crops whether growing or ready to be harvested, when produced by annual cultivation, is not
part of realty.
Paragraph 2 of Art. 334 of the Civil Code has been modified by Sec. 450 of Code of Civil
Procedure and Act no. 1508 in the sense that for purposes of attachment and execution and
Chattel Mortgage Law, ungathered products have the nature of personal property.
Davao Sawmill Co. v. Castillo, 61 Phil. 709
Facts:
Davao Saw Mill Co., Inc., a holder of a lumber concession, has operated sawmill in a land which it
does not own. The company erected a building therein which housed the machinery used by it. In
the lease contract between the sawmill company and the owner of the land, it has been agreed
that after the lease period or in case the company should leave or abandon the land leased
before the said period, ownership of all the improvements and buildings except machineries and
accessories, made by the company shall pass to the owner of the land without any obligation on
its part to pay any amount for said improvements and buildings. In another action, A writ of
execution was issued against the company and the properties in question were levied upon. The
company assailed the said writ contending that the machineries and accessories were personal
in nature, hence, not subject to writ of execution. The trial judge ruled in favour of the company.
Issue:
Whether or not the subject properties are personal in nature.
Held:
The subject properties are personal in nature. Article 334, paragraph 5, of the [Old] Civil Code
provides that real property consists of (5) Machinery, liquid containers, instruments or
implements intended by the owner of any building or land for use in connection with any industry
or trade being carried on therein and which are expressly adapted to meet the requirements of
such trade of industry. Machinery which is movable in nature only becomes immovable when
placed in a land by the owner of the property or land but not when so placed by a tenant or any
person having only a temporary right, unless such person acted as the agent of the owner. In the
case at bar, the machinery is intended not by the owner of the land but by the saw mill company
for use in connection with its trade. In this sense, the machinery is not a real property.
Mindanao Bus Co. v. City Assessor Digest
Facts:
Petitioner is a public utility company engaged in the transport of passengers and cargo by motor
vehicles in Mindanao with main offices in Cagayan de Oro (CDO). Petitioner likewise owned a land
where it maintains a garage, a repair shop and blacksmith or carpentry shops. The machineries
are placed thereon in wooden and cement platforms. The City Assessor of CDO then assessed a

P4,400 realty tax on said machineries and repair equipment. Petitioner appealed to the Board of
Tax Appeals but it sustained the City Assessor's decision, while the Court of Tax Appeals (CTA)
sustained the same.
Note: This is merely a case digest to aid in remembering the important points of a case. It is still
advisable for any student of law to read the full text of assigned cases.
Issue:
Whether or not the machineries and equipments are considered immobilized and thus subject to
a realty tax
Held: The Supreme Court decided otherwise and held that said machineries and equipments are
not subject to the assessment of real estate tax.
Said equipments are not considered immobilized as they are merely incidental, not essential and
principal to the business of the petitioner. The transportation business could be carried on
without repair or service shops of its rolling equipment as they can be repaired or services in
another shop belonging to another.

US V. CARLOS
FACTS:
Mr. Carlos stole about 2273 kilowatts of electricity worth 909 pesos from Meralco. The court
issued warrant for arrest. Mr. Carlos demurred and refused to enter a plea. He claimed that what
he did failed to constitute an offense. His counsel further asserted that the crime of larceny
applied only to tangibles, chattels and objects that can be taken into possession and spirited
away.
Deliberation quickly followed at the court which subsequently sentenced him to over a year in
jail. Mr. Carlos contested saying that electrical energy cant be stolen (how can one steal an
incorporeal thing?). He filed an appeal on such grounds and the court of first instance affirmed
the decision. The case reached the Supreme Court.
ISSUE:
Whether or not larceny can be committed against an intangible such as electricity.
HELD:
Yes, larceny of incorporeal objects is possible. The right of ownership of electrical current was
secured by
Art 517 and 518 of the Penal Code which applies to gas.
Analogically, electricity can be considered as gas which can be stolen. However, the true test of
what constitutes the proper subject of larceny is not whether the subject is corporeal or
incorporeal, but whether it is capable of appropriation by another other than the owner. It is a
valuable article of merchandise, a force of nature brought under the control of science. Mr. Carlos
secretly and with intent to deprive the company of its rightful property, used jumper cables to
appropriate the same for his own use. This constitutes larceny.
HEIRS OF MARIO MALABANAN vs. REPUBLIC OF THE PHILIPPINES GR No. 179987 April
29, 2009
FACTS:
On 20 February 1998, Mario Malabanan filed an application for land registration before the RTC of
Cavite-Tagaytay, covering a parcel of land situated in Silang Cavite, consisting of 71,324 square
meters. Malabanan claimed that he had purchased the property from Eduardo Velazco, and that
he and his predecessors-in-interest had been in open, notorious, and continuous adverse and
peaceful possession of the land for more than thirty (30) years. Velazco testified that the
property was originally belonged to a twenty-two hectare property owned by his great-

grandfather, Lino Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe
fourth being Aristedess grandfather. Upon Linos death, his four sons inherited the property and
divided it among themselves. But by 1966, Estebans wife,Magdalena, had become the
administrator of all the properties inherited by the Velazco sons from their father, Lino. After the
death of Esteban and Magdalena, their son Virgilio succeeded them in administering the
properties, includingLot9864-A, which originally belonged to his uncle, Eduardo Velazco. It was
this property that was sold by Eduardo Velazco to Malabanan.
Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001,
issued by the Community Environment & Natural Resources Office, Department of Environment
and Natural Resources (CENRO-DENR), which stated that the subject property was verified to be
within the Alienable or Disposable land per Land Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982. On 3 December
2002, the RTC approved the application for registration.
The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to
prove that the property belonged to the alienable and disposable land of the public domain, and
that the RTC had erred in finding that he had been in possession of the property in the manner
and for the length of time required by law for confirmation of imperfect title. On 23 February
2007, the Court of Appeals reversed the RTC ruling and dismissed the appliocation of Malabanan.
ISSUES:
1. In order that an alienable and disposable land of the public domain may be registered under
Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration
Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it
sufficient that such classification occur at any time prior to the filing of the applicant for
registration provided that it is established that the applicant has been in open, continuous,
exclusive and notorious possession of the land under a bona fide claim of ownership since June
12, 1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of land
classified as alienable and disposable be deemed private land and therefore susceptible to
acquisition by prescription in accordance with the Civil Code?
3. May a parcel of land established as agricultural in character either because of its use or
because its slope is below that of forest lands be registrable under Section 14(2) of the Property
Registration Decree in relation to the provisions of the Civil Code on acquisitive prescription?
4. Are petitioners entitled to the registration of the subject land in their names under Section
14(1) or Section 14(2) of the Property Registration Decree or both?
HELD:
The Petition is denied.
(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the
Public Land Act recognizes and confirms that those who by themselves or through their
predecessors in interest have been in open, continuous, exclusive, and notorious possession and
occupation of alienable and disposable lands of the public domain, under a bona fide claim of
acquisition of ownership, since June 12, 1945 have acquired ownership of, and registrable title
to, such lands based on the length and quality of their possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not require that
the lands should have been alienable and disposable during the entire period of possession, the
possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared
alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land Act.
(b) The right to register granted under Section 48(b) of the Public Land Act is further confirmed
by Section 14(1) of the Property Registration Decree.

(2) In complying with Section 14(2) of the Property Registration Decree, consider that under the
Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial property.
However, public domain lands become only patrimonial property not only with a declaration that
these are alienable or disposable. There must also be an express government manifestation that
the property is already patrimonial or no longer retained for public service or the development of
national wealth, under Article 422 of the Civil Code. And only when the property has become
patrimonial can the prescriptive period for the acquisition of property of the public dominion
begin to run.
(a) Patrimonial property is private property of the government. The person acquires ownership of
patrimonial property by prescription under the Civil Code is entitled to secure registration thereof
under Section 14(2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be acquired, one
ordinary and other extraordinary. Under ordinary acquisitive prescription, a person acquires
ownership of a patrimonial property through possession for at least ten (10) years, in good faith
and with just title. Under extraordinary acquisitive prescription, a persons uninterrupted adverse
possession of patrimonial property for at least thirty (30) years, regardless of good faith or just
title, ripens into ownership.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired
ownership over the subject property under Section 48(b) of the Public Land Act. There is no
substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest
have been in possession of the property since 12 June 1945 or earlier. The earliest that
petitioners can date back their possession, according to their own evidencethe Tax
Declarations they presented in particularis to the year 1948. Thus, they cannot avail
themselves of registration under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject
property was declared as alienable or disposable in 1982, there is no competent evidence that is
no longer intended for public use service or for the development of the national evidence,
conformably with Article 422 of the Civil Code. The classification of the subject property as
alienable and disposable land of the public domain does not change its status as property of the
public dominion under Article 420(2) of the Civil Code. Thus, it is insusceptible to acquisition by
prescription.