5. Davao Sawmill vs Aproniano G. Castillo & Davao Light & Power Co., Inc.

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G.R. No. L-40411, August 7, 1935

(Paras, Page 21, Article 415 #6: Paragraph 4 letter B: Placing by the owner)
FACTS: Davao Sawmill holds a lumber concession from the Government of the Philippines and operates
as lessee, a sawmill on land belonging to another. Davao Sawmill had erected a building which housed
machinery used by the company. The properties object of the conflict were machines placed by Davao
Sawmill and mounted on foundations of cement.
Said property was levied upon as personalty by the sheriff in another action in which the court rendered
judgment in favor of herein defendant Davao Light & Power Co. As such, said company proceeded to
take possession of machinery in question.
*It must be noted, that Davao Sawmill has treated the machinery as personal property by executing chattel
mortgages in favor of third persons.
Davao Saw Mill contends that the property is real, based on Art 334, par 1 of the old civil code.
Davao Light & Power contends that the property is personal, based on par 5 of the same.
ISSUE: WHETHER THE PROPERTY IS REAL OR PERSONAL
HELD: The property in question is PERSONAL. Davao Sawmill’s characterization of the property as
CHATTELS* is indicative of intention and impresses upon the property the character determined by the
parties.
Said machinery was intended by the 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.
Machinery which is movable in 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, a usufructuary, or any person having only a
temporary right, unless such person acted as the agent of the owner.