PRUDENTIAL BANK, petitioner vs. HON.
ISSUE: Whether the chattel mortgage was null and
DOMINGO D. PANIS, FERNANDO
MAGCALE & TEODULA BALUYUT-
MAGCALE, respondents.
G.R. No. L-50008. August 31, 1987. PARAS, J.
FACTS: On November 19, 1971, spouses Fernando A.
Magcale and Teodula Baluyut-Magcale secured a loan
in the sum of P70,000.00 from Prudential Bank. To
secure payment of this loan, the Spouses executed in
favor of Prudential Bank a deed of Real Estate
Mortgage over the several properties. For failure to pay
their obligation to the Bank, the deeds of Real Estate
Mortgage were extrajudicially foreclosed. Respondent
Court declared the deeds as null and void.
ISSUE: Whether or not a valid real estate mortgage can
be constituted on the building erected on the land
belonging to another.
HELD: In the enumeration of properties under Article
415 of the Civil Code of the Philippines, this Court
ruled that, "it is obvious that the inclusion of "building"
separate and distinct from the land, in said provision of
law can only mean that a building is by itself an
immovable property. Thus, while it is true that a
mortgage of land necessarily includes, in the absence of
stipulation of the improvements thereon, buildings, still
a building by itself may be mortgaged apart from the
land on which it has been built. Such a mortgage would
be still a real estate mortgage for the building would still
be considered immovable property even if dealt with
separately and apart from the land. In the same manner,
this Court has also established that possessory rights
over said properties before title is vested on the grantee,
may be validly transferred or conveyed as in a deed of
mortgage.
GAVINO A. TUMALAD and GENEROSA R.
TUMALAD, plaintiffs-appellees vs. ALBERTA
VICENCIO and EMILIANO SIMEON, defendants-
appellants.
G.R. No. L-30173. September 30, 1971. REYES,
J.B.L., J.
FACTS: Vicencio and Simeon executed a chattel
mortgage in favor of plaintiffs Tumalad over their
house, which was being rented by Madrigal et. al. 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.
Katrina Andrea L. Bringas
University of Santo Tomas
Faculty of Civil Law
void because only personal properties can be subject of
a chattel mortgage.
HELD: The inclusion of the building, separate and
distinct from the land, in the enumeration of what may
constitute real properties 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. 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. It should be noted, however, that the
principle is predicated on statements by the owner
declaring his house to be a chattel, a conduct that may
conceivably estop him from subsequently claiming
otherwise.
Here, while there was no specific statement referring to
the house as personal property, the ceding, selling, or
transferring of property through chattel mortgage
means that the defendant conveys the house as chattel
or at least intended to treat the same as such. Applying
the principle of estoppel, any inconsistent claim
pertaining to the matter shall not be allowed.
LEON SIBAL, plaintiff-appellant vs. EMILIANO J.
VALDEZ ET AL., defendants.
G.R. No. L-26278. August 4, 1927. JOHNSON, J.
FACTS: Vitaliano Mamawal, by virtue of a writ of
execution issued by CFI Pampanga, attached and sold
to Emiliano J. Valdez the sugar cane planted by Sibal
and his tenants on seven parcels of land. Sibal prayed
that a writ of preliminary injunction be issued against
Valdez et. al., restraining them (1) from distributing him
in the possession of the parcels of land described in the
complaint; (2) from taking possession of, or harvesting
the sugar cane in question; and (3) from taking
possession, or harvesting the palay in said parcels of
land. Valdez by way of counterclaim, alleged that by
reason of the preliminary injunction he was unable to
gather the sugar cane, sugar-cane shoots, and palay in
said parcels of land, representing a loss to him of
P8,375.20 and that, in addition thereto, he suffered
damages amounting to P3,458.56. He prayed, for a
judgment absolving him from all liability under the
complaint.
ISSUE: Whether the sugar cane in question is personal
or real property.
HELD: It is contended that sugar cane comes under
the classification of real property as "ungathered
products" in paragraph 2 of article 334 of the Civil the law also requires that the industry or works be
Code. Said paragraph enumerates as real property the carried on in a building or on a piece of land.
following: trees, plants, and ungathered products, while
they are annexed to the land or form an integral part of In this case, the equipment in question are destined only
any immovable property. The article, however, has to repair or service the transportation business, which
received in recent years an interpretation by the is not carried on in a building or permanently on a piece
Tribunal Supremo de España, which holds that, under of land, as demanded by the law. Said equipment may
certain conditions, growing crops may be considered as not, therefore, be deemed real property and therefore,
personal property. cannot be the subject of assessment for purposes of real
estate tax.
Act No. 1508, the Chattel Mortgage Law, fully
recognized that growing crops are personal property.
Section 2 of said Act provides: "All personal property
shall be subject to mortgage, agreeably to the provisions
of this Act, and a mortgage executed in pursuance
thereof shall be termed a chattel mortgage." Section 7
in part provides: "If growing crops be mortgaged the
mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and
protect the crop while growing.

The SC held that paragraph 2 of article 334 of the Civil

Code has been modified by section 450 of the Code of
Civil Procedure and by Act No. 1508, in the sense that,
for the purpose of attachment and execution, and for
the purposes of the Chattel Mortgage Law, "ungathered
products" have the nature of personal property. The
lower court, therefore, committed no error in holding
that the sugar cane in question was personal property
and, as such, was not subject to redemption.

MINDANAO BUS COMPANY, petitioner vs. THE

CITY ASSESSOR et. al., respondents.
G.R. No. L-17870. September 29, 1962.
LABRADOR, J.

FACTS: Mindanao Bus Company filed a petition for

review on the decision of the CTA holding it liable for
the payment of realty tax on its maintenance and repair
equipment.

ISSUE: Whether the maintenance and repair

equipment is a real or immovable property to which a
real estate tax may not be imposed.

HELD: Art. 415, par. 5 states that machinery,

receptacles, 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,
and which tend directly to meet the needs of the said
industry or works are deemed immovable properties.

Movable equipment, 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. Aside from the element of essentiality

Katrina Andrea L. Bringas

University of Santo Tomas
Faculty of Civil Law