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8 )Overseas Bank of Manila vs. Cordero
Private respondent opened a 1-year time deposit with petitioner bank amounting to P80,000, with
interest of 6% p.a. Due to its distressed financial condition, the bank was unable to pay. Cordero
instituted an action before the CFI Manila. Petitioner raised the defenses of insolvency and
prejudice to other depositors. The lower court, and the Court of Appeals, ruled in favor of
Cordero. Hence, the instant petition for review on certiorari.
Certain supervening events rendered the issue moot and academic. Respondent’s brother and
attorney-in-fact sent a letter to the Commercial Bank of Manila (petitioner’s successor-ininterest), acknowledging receipt of P10,000, and another manifestation for P73,840, with waiver
of damages. Upon further examination, it was found that the respondent’s brother has no SPA.
Respondent’s brother submitted the SPA, with explanatory comment that the waiver applies only
to third party claims, suits and damages, not to interest and attorney’s fees.
Whether respondent is entitled to interest and attorney’s fees
The obligation to pay interest on the deposit ceases the moment the operation of the bank is
completely suspended by the Central Bank. Neither can respondent Cordero recover attorney’s
fees. Petitioner’s refusal to pay was not due to a willful and dishonest refusal to comply with its
obligation but to restrictions imposed by Central Bank.

Issue: Whether or not petitioner bank is liable solely for the amount withdrawn by the impostor. The tellers know. always having in mind the fiduciary nature of their relationship (Simex International vs.000. The following day. Calapre. . In PHILIPPINE BANK OF COMMERCE VS. according to the circumstances”. Calapre left the passbook of L. If the tellers give the passbook to the wrong person.00 by using said passbook and a falsified withdrawal slip. This doctrine is not applicable to the present case. or where it is impossible to determine whose fault or negligence caused the loss. to deposit in his savings account in petitioner bank. “the liability may be regulated by the courts. When he returned. or should know. Petitioner bank must pay only 60% of the actual damages. Thus. Diaz instructed his employee. respondent L. the liability of petitioner bank should be reduced. The bank is liable to its depositor for breach of the savings deposit agreement due to negligence or culpa contractual. the one who had the last clear opportunity to avoid the loss but failed to do so. Held: No. The bank is liable for breach of contract due to negligence or culpa contractual. CA. The contract between the bank and its depositor is governed by the provisions of the Civil Code on simple loan. Diaz was guilty of contributory negligence in allowing a withdrawal slip signed by its authorized signatories to fall into the hands of an impostor. The contributory negligence of the private respondent or his last clear chance to avoid the loss would not exonerate the petitioner from liability. the teller told him that somebody got it. CA)”. However. Private respondent sued the bank for the amount withdrawn by the impostor.C. the Supreme Court allocated the damages between the depositor who is guilty of contributory negligence and the bank on a 40-60 ratio. that the rules on savings account provide that any person in possession of the passbook is presumptively its owner. The same ruling was applied to this case. facilitating unauthorized withdrawals by that person.C. The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably later than that of the other. they would be clothing that person presumptive ownership of the passbook. is chargeable with the loss. “The bank is under obligation to treat the accounts of its depositors with meticulous care. an impostor succeeded in withdrawing P300. In this case. Diaz to the teller of the petitioner bank because it was taking time to accomplish the transaction and he had to go to another bank. Article 1172 of the Civil Code provides that “responsibility arising from negligence in the performance of every kind of obligation is demandable”. it serves to reduce the recovery of damages by the private respondent.C.10) Consolidated Bank v CA Facts: Private respondent L. The trial court dismissed the complaint but the CA reversed the decision of the trial court and held the bank liable. Under Article 1172.

vs. INCORPORATED. CA where the Court held the depositor guilty of contributory negligence. REFORMINA and HEIRS OF FRANCISCO REFORMINA.C. according to the circumstances. SHELL REFINING COMPANY (PHILS. Solidbank must pay the other 60% of the actual damages. Applying the same ruling to this case.. would exonerate the defendant from liability. R-11279.” This means that if the defendant exercised the proper diligence in the selection and supervision of its employee. Diaz must shoulder 40% of the actual damages awarded by the appellate court. as Judge of the Court of First Instance. FACTS This is a a Petition for Review on certiorari of the Resolution of CFI-Cebu Judge Tomol for an action for Recovery of Damages for injury to Person and Loss of Property. Such contributory negligence or last clear chance by the plaintiff merely serves to reduce the recovery of damages by the plaintiff but does not exculpate the defendant from his breach of contract Mitigated Damages Under Article 1172. we allocated the damages between the depositor and the bank on a 40-60 ratio. or if the plaintiff was guilty of contributory negligence. On June 7. and MICHAEL. the liability of Solidbank should be reduced. In this case. Branch XI. Diaz was guilty of contributory negligence in allowing a withdrawal slip signed by its authorized signatories to fall into the hands of an impostor. petitioners. TOMOL. WHEREFORE. “liability (for culpa contractual) may be regulated by the courts. then the courts may reduce the award of damages. where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss. L-59096 October 11. Thus. we hold that L. 2 the dispositive portion of which reads— . JR.C. THE HONORABLE VALERIANO P. In PBC v. judgment was rendered by the Court of First instance of Cebu in Civil Case No.). the decision of the Court of Appeals is AFFIRMED with MODIFICATION. No.. CEBU CITY. L. 1972. 1985 PACITA F. This is a case of culpa contractual.R. respondents. 11) G. INC.We do not apply the doctrine of last clear chance to the present case.

Reformina and the heirs of Francisco Reformina. The liability of the two defendants for an the awards is solidary. 1972 with legal interest from the filing of the complaint until paid and to pay attorney's fees of P5.00 a month as the estimated monthly loss suffered by them as a result of the fire of May 6. they now come before Us through the instant petition praying for the setting aside of the said Resolution and for a declaration that the judgment in their favor should bear legal interest at the rate of twelve (12%) percent per annum pursuant to Central Bank Circular No.000..00 compensation for the value of the lost boat with legal interest from the filing of the complaint until fully paid to Pacita F. 1969 up to the time they are actually paid or already the total sum of P370.00 which is the value of the boat F B Pacita Ill together with its accessories. Incorporated are hereby ordered to pay .000.00 with legal interests from the filing of the complaint until paid as compensatory and moral damages and P41.WHEREFORE. The two (2) defendants.appellants are also directed to pay P100.000.000. What kind of judgment is covered under USURY Law? .00 which is the value of the insurance recovered and the amount of P10. 1974.). and Michael. 416 dated July 29. Inc. On appeal to the then Court of Appeals. (Phils.000. judgment is hereby rendered in favor of the plaintiffs and third party defendants and against the defendants and third party plaintiffs as follows: Ordering defendants and third party plaintiffs Shell and Michael.000.00 as of June 4. ISSUE How much. fishing gear and equipment minus P80.00 with costs against defendants and third party plaintiffs. should a judgment debtor pay the judgment creditor? WON legal interest meant 6% as provided for under Article 2209 of the Civil Code . by way of legal interest. Petitioners' motion for the reconsideration of the questioned Resolution having been denied.084. the judgment appealed from is modified such that defendants-appellants Shell Refining Co.. the trial court's judgment was modified to reads as follows— WHEREFORE. Incorporated to pay jointly and severally the following persons: (g) Plaintiffs Pacita and Francisco Reformina the sum of P131.

Central Bank Circular No. or credits and the rate allowed in judgments. (Italics supplied) The judgments spoken of and referred to are Judgments in litigations involving loans or forbearance of any 'money. the law applicable to the said case is Article 2209 of the New Civil Code which reads— Art. 116. nor involving loans or forbearance of any money. much less forbearances of any money. and the debtor incurs in delay. As correctly argued by the private respondents. the legal interest which is six percent per annum. there being no stipulation to the contrary. and in the absence of stipulation. the indemnity for damages. To make Central Bank Circular No. goods or credits. as amended. goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority granted to the Central Bank. shall be the payment of interest agreed upon. 2655.RULING Article 2209 of the Civil Code is applicable in case at bar. It must be noted that the decision herein sought to be executed is one rendered in an Action for Damages for injury to persons and loss of property and does not involve any loan. 416 which provides — By virtue of the authority granted to it under Section 1 of Act 2655. as amended. goods. 2209. 15) Security Bank and Trust Company v RTC (Credit Transactions) SECURITY BANK AND TRUST COMPANY v RTC-MAKATI FACTS: . in the absence of express contract as to such rate of interest. No. goods or credits. Any other kind of monetary judgment which has nothing to do with. shall be twelve (12%) per cent per annum. If the obligation consists in the payment of a sum of money. 1622 dated July 29. 1974.D. otherwise known as the "Usury Law" the Monetary Board in its Resolution No. The above provision remains untouched despite the grant of authority to the Central Bank by Act No. 416 applicable to any case other than those specifically provided for by the Usury Law will make the same of doubtful constitutionality since the Monetary Board will be exercising legislative functions which was beyond the intendment of P. has prescribed that the rate of interest for the loan or forbearance of any money. This Circular shall take effect immediately.

1982: Sec. 1. Further. it appears that indeed the agreed rate of interest as stipulated on the three (3) promissory notes is 23% per annum. DECISION OF LOWER COURTS: * RTC: Judge Gorospe of the Makati RTC ordered Eusebio to pay but he lowered the interest rate to 12% per annum. Do the Courts have the discretion to arbitrarily override stipulated interest rates of promissory notes and stipulated interest rates of promissory notes and thereby impose a 12% interest on the loans. The applicable provision of law is the Central Bank Circular No. Eusebio acquired 3 separate loans from Security Bank amounting to P265k. Should the rate of interest on a loan or forbearance of money. shall not be subject to any ceiling prescribed under or pursuant to the Usury Law. goods or credits. provided they are not contrary to law. From the examination of the records. goods or credits. Article 1306 of the New Civil Code provides that contracting parties may establish such stipulations. Furthermore. Security Bank sued for collection. 905 which took effect on December 22. ISSUES & RULING: 1. that may be charged or collected by any person. It is not for respondent court a quo to change the stipulations in the contract where it is not illegal. The promissory note was freely and voluntarily signed by both parties. clauses. * directly to SC in petition for certiorari. Eusebio never questioned the rate. Therefore.In 1983. Eusebio defaulted from paying. the rate per contract prevails. regardless of maturity and whether secured or unsecured. fees and other charges. Only in the absence of stipulations will the 12% rate be applied or if the stipulated rate is grossly excessive. far in excess of the ceiling prescribed under or pursuant to the Usury Law. morals. He merely expressed to negotiate the terms and conditions. The agreed interest rate was 23% per annum. on a loan or forbearance of any money. in the absence of evidence justifying the imposition of a higher rate? NO. good customs. The promissory notes were signed by both parties voluntarily. The rate of interest. terms and conditions as they may deem convenient. including commissions. public order. 905 which prescribes that the rate of interest thereof shall continue to be 12% per annum? or whether or not the 23% rate of interest per annum agreed upon by petitioner bank and respondents is allowable and not against the Usury Law? Yes. We find no valid reason for the respondent court a quo to impose a 12% rate of interest on . stipulations therein are binding between them. prevail over Section 2 of Central Bank Circular No. as stipulated in a contract. respondent did not question that rate. premiums. as amended. 2. whether natural or judicial. Significantly. or public policy. Leia Ventura was the co-maker. The rate of interest was agreed upon by the parties freely.

00. 905 which took effect on December 22.00. shall continue to be twelve per cent (12%) per annum. 000. Defendants obtained another loan from Defendant in the amount of P90. as amended. 1982. They executed another promissory note in favor of Plaintiff to pay the sum of P500. Sec. For the third time. 000. only in the absence of a stipulation can the court impose the 12% rate of interest. They executed a promissory note in favor of the Plaintiff. including commissions. 000. particularly Sections 1 and 2 which state: Sec. regardless of maturity and whether secured or unsecured. payable in 2 months. Upon maturity of the three promissory notes. shall not be subject to any ceiling prescribed under or pursuant to the Usury Law. . the rate shall be 12% per annum. 299 SCRA 481.00 to the borrowers and retained P3. only the sum of P275. at 6% interest per month. In a loan or forbearance of money. 1. November 27. therefore. whether natural or judicial. that may be charged or collected by any person. fees and other charges. However. goods or credits. payable in 2 months and executed a promissory note.00. maturing in 1 month. 000.00. 1998. Defendants failed to pay the indebtedness.00 out of the proceeds of the loan. The rate of interest.00 as advance interest for 1 month at 6% per month.00. on a loan or forbearance of any money. 16) Medel vs Court of Appeals.the principal balance owing to petitioner by respondent in the presence of a valid stipulation. 905. Hence. and in the absence thereof. was given to them out of the proceeds of the loan. goods or credits and the rate allowed in judgments. 000.00. 000. this circular did not repeal nor in anyway amend the Usury Law but simply suspended the latter's effectivity. Facts: Defendants obtained a loan from Plaintiff in the amount P50. Contrary to the claim of respondent court. All the promissory notes were signed in 1983 and. in the absence of express contract as to such rate of interest. The rate of interest for the loan or forbearance of any money. 000. APPLICABLE PROVISION OF LAW: Central Bank Circular No. were already covered by CB Circular No. 131622. and sought from Plaintiff another loan in the amount of P60. 2. They executed a promissory note to evidence the loan and received only P84. Plaintiff gave only the amount of P47. bringing their indebtedness to a total of P50. Defendants secured from Plaintiff another loan in the amount of P300. Defendants consolidated all their previous unpaid loans totalling P440.00. GR No.000. 000. the interest due should be that stipulated in writing. 000. premiums. and secured by a real estate mortgage.

5% per month interest and 2& service charge per annum . iniquitous. 905 has expressly removed the interest ceilings prescribed by the Usury Law and that the Usury Law is now “legally inexistent. On maturity of the loan. the lender and the borrower could agree on any interest that may be charged on the loan. and ordered the Defendants to pay the Plaintiffs the sum of P500. Defendants filed the present case via petition for review on certiorari. the interest charged on the loans was unconscionable and “revolting to the conscience” and ordered the payment of the amount of the first 3 loans with a 12% interest per annum and 1% per month as penalty. which consolidated all the unpaid loans of the defendants.00 with a 5. A stipulated rate of interest at 5.5% per month on the P500. Usury has been legally non-existent in our jurisdiction.5% interest per month plus 2% service charge per annum.” Doctrine: A CB Circular cannot repeal a law. whether intended as an indemnity or a penalty if they are iniquitous or unconscionable. Civil Code The courts shall reduce equitably liquidated damages. 000. Declaring that the due execution and genuineness of the four promissory notes has been duly proved. . with an additional amount of 1% per month as penalty charges. Interest can now be charged as lender and borrower may agree upon. is usurious. Held: No. and 1% per month as penalty charges. 905. Issue: WON the stipulated 5.5% interest rate per month on the loan in the sum of P500. unconscionable and exorbitant. The Court of Appeals ruled in favor of the Plaintiff-appellants on the ground that the Usury Law has become legally inexistent with the promulgation by the Central Bank in 1982 of Circular No. Plaintiff-appellants argued that the promissory note. the RTC ruled that although the Usury Law had been repealed. Law: Article 2227. On appeal. is the law that governs the parties. but it cannot be considered “usurious” because Central Bank Circular No. plus 5. Jurisprudence provides that CB Circular did not repeal nor in a way amend the Usury Law but simply suspended the latter’s effectivity (Security Bank and Trust Co vs RTC). Only a law can repeal another law.00 loan is excessive. the Defendants failed to pay the indebtedness which prompt the Plaintiffs to file with the RTC a complaint for collection of the full amount of the loan including interests and other charges.

 McLoughlin allegedly placed the following in his safety deposit box – 2 envelopes containing US Dollars. Catering to the public. Tan Khey).  When he went abroad. Paiyam and Lainez.  In an early case (De Los Santos v. 256 SCRA 292 [1996]). credit cards. one envelope containing Australian Dollars. he confronted Lainez and Paiyam who admitted that Tan opened the safety deposit box with the key assigned to him. nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a haemorrhaging of their assets (Almeda vs. bankbooks and a checkbook.Note: While the Usury Law ceiling on interest rates was lifted by the CB Circular 905. CA. and the other remaining in the possession of the management of the hotel. Letters. 30) YHT Realty v. Lopez alsto told McLoughlin that Tan stole the key assigned to McLouglin while the latter was asleep. hotelkeepers are bound to provide not only lodging for hotel guests and security to their persons and belongings. Tan admitted that she had stolen McLouglin’s key and was able to open the safety deposit box with the assistance of Lopez. McLoughlin went up to his room where Tan was staying and confronted her. The twin duty constitutes the essence of the business. it is not necessary that they be actually .  Lopez refused to accept responsibility relying on the conditions for renting the safety deposit box entitled “Undertaking For the Use of Safety Deposit Box” ISSUE: Whether the hotel’s Undertaking is valid? HELD: NO  Article 2003 was incorporated in the New Civil Code as an expression of public policy precisely to apply to situations such as that presented in this case. one of which is given to the registered guest. The law in turn does not allow such duty to the public to be negated or diluted by any contrary stipulation in so-called “undertakings” that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature.  The safety deposit box could only be opened through the use of 2 keys. a few dollars were missing and the jewelry he bought was likewise missing.  McLoughlin insisted that it must be the hotel who must assume responsibility for the loss he suffered.  Eventually. CA FACTS:  Respondent McLoughlin would stay at Tropicana Hotel every time he is here in the Philippines and would rent a safety deposit box. The hotel business like the common carrier’s business is imbued with public interest. CA ruled that to hold hotelkeepers or innkeeper liable for the effects of their guests.

CC for they allow Tropicana to be released from liability arising from any loss in the contents and/or use of the safety deposit box for any cause whatsoever. 36) PNB v SAYO. FACTS - - Noah’s Ark Sugar Refinery (Noah’s) issued several warehouse receipts (quedans). such fees and charges have ceased to accrue from the date of the rejection by Noah’s Ark to heed the lawful demand for the release of the goods. delivery to it shall be effected only upon payment of the storage fees. LC granted lien PNB appealed ISSUE: WoN PNB is entitled to the stocks of sugar as the endorsee of the quedans. Noah’s Ark claimed for warehouseman’s lien for the storage of the goods. delivered to the innkeepers or their employees.e. However. which were negotiated to Rosa. non satisfaction of W/Hman Lien) but on an adverse claim of ownership. as in this case. Therese  Luis and Cresencia  PNB Luis and Cresencia failed to pay their loans hence PNB demanded delivery of sugar stocks. the vendees and the endorsers of the quedans never acquired ownership thereof. Noah’s Ark contended that the agreement made by them with the vendees was stopped since the bank dishonored the payments made by the vendees to Noah’s Ark. the undertaking was intended to bar any claim against Tropicana for any loss of the contents of the safety deposit box whether or not negligence was incurred by Tropicana or its employees. the lien was lost when R refused to deliver the goods. alleging ownership thereof. However. RNS and St. PNB in this case. in this case. Noah’s Ark refused. With greater reason should the liability of the hotelkeeper be enforced when the missing items are taken without the guest’s knowledge and consent from a safety deposit box provided by the hotel itself. The loss of W/H Man’s lien does not necessarily mean the extinguishment of the obligation to pay the W/H fees and charges which continues to be a personal liability of the owners. however. As such. without paying the lien SC: YES - While PNB is entitled to the stocks of sugar as the endorsee of the quedans. which were again negotiated to Luis and Cresencia. which they (Luis and Cresencia) endorsed to PNB as security for 2 loan agreements. Therese (vendees). The warehouseman is entitled to the warehouseman’s lien that attaches to the goods invokable against anyone who claims a right of possession thereon. Evidently. It is enough that such effects are within the hotel or inn. Paragraphs (2) and (4) of the “undertaking” manifestly contravene Article 2003. . RNS and St. o Transfer of quedans – Noah’s  Rosa. JR. which were not anchored to a valid excuse (i.

but had been rebuffed. Alcantara filed an action against them. Notwithstanding the consignations. before the scheduled date of auction. The defendants contend that the amount claimed by Alcantara included the interest and that the principal borrowed was only 200 and that the interest was 280. It was claimed that respondents had attempted to tender these payments to the Parays. 38) ALCANTARA v ALINEA Facts:       Alinea and Belarmino loaned P480 from Alcantara. However.1 Sometime during the years 1979 to 1980. Petitioners now argue that the essential procedural requisites for the auction sale had been satisfied. if the credit has not been satisfied in due time. sought the declaration of nullity of the pledge agreements. respondents filed complaints with the Regional Trial Court (RTC) of Cebu City and . . Under the Civil Code. with petitioner Vidal Espeleta successfully bidding. All the creditor needs to do. without intervention by the courts. Alinea and Belarmino failed to pay. Respondents instead filed on 13 November 1991 a complaint seeking the declaration of nullity of the concluded public auction. the public auction took place as scheduled. According to the loan agreement. in their respective personal capacities. the house and lot of Alinea and Belarmino will be considered sold to Alcantara. in its decision3 dated 14 October 1988. However the RTC. if the period has expired without payment of the loan. respondents secured by way of pledge of some of their shares of stock to petitioners Bonifacio and Faustina Paray ("Parays") the payment of certain loan obligations.37) PARAY v RODRIGUEZ Facts: Respondents were the owners. all of respondents caused the consignation with the RTC Clerk of Court of various amounts. of shares of stock in a corporation known as the Quirino-Leonor-Rodriguez Realty Inc. When the Parays attempted to foreclose the pledges on account of respondents’ failure to pay their loans. the foreclosure of a pledge occurs extrajudicially. They refused to deliver the property to Alcantara. is to proceed before a Notary Public to the sale of the thing pledged. Issue: W/N the the essential procedural requisites for the auction sale had been satisfied? Ruling: Yes. Respondents then received Notices of Sale which indicated that the pledged shares were to be sold at public auction. dismissed the complaint and gave "due course to the foreclosure and sale at public auction of the various pledges.

The will of the parties are controlling. The contract is not a pledge since the said property is not personal property and the debtor continued in possession thereof and was never been occupied by the creditor. claiming she has the right to the property. or any essential defect which would tend to nullify the same. It is also not an antichresis by reason that as the creditor has never been in possession of the property nor has enjoyed the said property nor for one moment received its rents. Reyes filed a case for consolidation. the price of which should be the amount loaned. Reyes claims the ownership in the property automatically passes immediately to him after the sale and not after the end of the period to repurchase. The fact that the parties have agreed at the same time. if within a fixed period of time such amount should not be paid by the debtor-vendor of the property to the creditor-vendee of same. They also alleged as their special defense that they offered to pay Alcantara the sum of 480 but the latter had refused to accept the same. for the reason that the said document is not vested with the character and conditions of a public instrument. has not produced any change in the nature and legal conditions of either contract. 41) LANUZA v DE LEON Spouses lanuza executed a deed of sale with a right to repurchase to Reyes. The property. in such a manner that the fulfillment of the promise of sale would depend upon the nonpayment or return of the amount loaned. a contract of loan and a promise of sale of a house and lot. Issue: 1) WON there was a valid mortgage? 2) WON the defendants should deliver the property to Alcantara? Held: 1) No. In this case. the time was extended without the wife of lanuza signing the document. The spouses then mortgage the property to respondent to secure a debt. the sale of which was agreed to by the debtors does not appear mortgaged in favor of the creditor because in order to constitute a valid mortgage it is indispensable that the instrument be registered in the Register of Property and the document contract does not constitute a mortgage nor it could possibly be a mortgage. . A stipulation to the effect that the ownership will only be passed to the vendee if the vendor fails to repurchase the property was included. 2) Yes. The debt was unpaid and respondent filed a case to foreclose the mortgage which was granted. Upon expiration of term to repurchase.

where its factory stands and the chattels located therein as enumerated in its attached schedule . ISSUE: WoN the contested machineries (property bought by R on the same day that the 2nd loan was executed) should be inlcluded in the auction sale and sale to TSAI SC: NO! .P contended that the machineries. are part of the real estate stated in the Mortgage. . The said stipulation is a pactum commissorium which enables the mortgagee to acquire ownership of the mortgaged property without need of forclosure.RTC and CA ruled in favor of R.Issue: won reyes contention valid Ruling: yes. a stipulation in a purported pacto de retro sale that the ownership over the property sold would automatically pass to the vendee in case no redemption was effected within the stipulated period is contrary to the nature of a true pacto de retro sale. . which is similar to the attached list to the 1st mortgage.Based on the pieces of evidence. . properties and the contested machineries of R. Its insertion in the contract is an avowal of the intention to mortgage rather than to sell the property.The machineries were not included in the Notice of Sale . . . 47) TSAI v CA FACTS: . It is void. wherein P won the bid and the properties were leased and later sold to Tsai.The controverted machineries are not covered by or included in either of the 2 mortgages . under which the vendee acquires ownership of the thing sold immediately upon the execution of the sale. R purchased various machines and equipments . subject only to the vendors rights of redemption. which are connected to the land.On the same date of the 2nd loan. with Real Property and Chattel Mortgage over the lot. as in the case at bar.Later. P sold the factory.R filed for annulment of sale contending that the machineries bought by R which are not included in the list should be excluded from the sale to TSAI . R filed insolvency proceedings . the true intention of P and R is to treat machinery and equipment as chattels.Ever Textile (R) obtained a P3M loan from PBCOM (P).An immovable may be considered a personal property if there is a stipulation as when it is used as security in the payment of an obligation where a chattel mortgage is executed over it.P commenced an extrajudicial foreclosure (EJF).A 2nd loan was obtained secured by a Chattel Mortgage over personal properties listed in its attached list.

DOCTRINE: a chattel mortgage shall be deemed to cover only the property described therein and not like or substituted property thereafter acquired by the mortgagor and placed in the same depository as the property originally mortgaged .