CLASSIFICATION OF PROPERTY

(mobility and non-mobility)

IMMOVABLE/REAL ACADEMIC CLASSIFICATION OF INCLUSIONS UNDER ART. 415
PROPERTY REAL PROPERTIES ENUMERATION
BY NATURE: Under Paragraph 1:
ART. 415 OF THE CIVIL Those that cannot be moved from  Land – immovable by its nature. Even if land is moved by an extraordinary happening, it is still
CODE place to place because of their nature considered immovable.
such as those mentioned in par. 1 o If land is rented, it is still immovable.
Definition: (with respect to lands and roads) and  Roads
The law does not define what 8 of Art. 415
properties are immovable.  like trees and plants Under Paragraph 2:
 Trees and plants while attached to the land or form an integral part of an immovable –
Etymological meaning: yield to Note: may either be immovable by incorporation or by nature
the legal or juridical o classified by nature if they are spontaneous products of the soil.
significance attached to the
term by the law. Under Paragraph 8:
 Mines, quarries – including the minerals attached thereto, are real properties.
Note: enumeration given in  - Extracted minerals becomes chattels.
Art. 415 does not give an  Slag dump while the matter forms part of the bed – dirt and soil taken from a mine and piled
absolute criterion as which upon the surface of the ground.
properties are real or personal. -inside the dump can be found the minerals
 Waters either running or stagnant - refers to those still attached to or running thru the soil or
ground.
- Real property: canals, rivers, lakes, and such part of the sea as may be object of appropriation
- Personal property: “Water” itself.
BY INCORPORATION: Under Paragraph 1:
Those which are attached to an  Buildings - considered immovable provided they are more or less of a permanent structure,
immovable in a fixed manner as to substantially adhering to the land (whether built on one’s own land, or on rented land), and
form an integral part thereof like not mere superimpositions on the land barong-barongs or quonset fixtures with the intent of
buildings, walls or fences, trees, permanent annexation.
statues, animal houses, it is placed in o Gen Rule: Mortgage on a building is a real estate mortgage, not a mortgage on chattel
an immovable for the utility it gives to (personal property) or a chattel mortgage.
the activity carried thereon, such as o Inclusion of “building,’’ separate and distinct from the land, in Art. 415, can only mean that
machinery installed in a building to a building is by itself an immovable property (Prudential Bank v. Panis GR 50008, Aug. 31,
meet the needs of an industry in the 1988)
building, and docks on a river or those House built on rented land:
mentioned in Par. 1 (except lands and o If a chattel mortgage, duly registered, is made on a building, and subsequently a real
roads), 2, 3 and 4 of Art 415. mortgage is made on the land and the building, real mortgage should be preferred
 like a building (Evangelista v. Abad, 36 O.G. 2913)
o Personal properties: Dismantled house and/or material of such house (Biscerra, et al. v.
Teneza, et al., L-16218, Nov. 29, 1962)
o If a house is stipulated as personal property, still for purposes of sale at a public auction
(particularly regarding notice by publication) under Rule 39, Sec. 15 of the Rules of Court
on execution sales, the house should be considered real property. (Manalang, et al. v.
Ofilada, L-8133, May 18, 1956)
o A building subjected to a chattel mortgage, cannot be sold extra-judicially under the
provisions of Act 3135 since said Act refers only to real estate mortgages. (Luna v.
Encarnacion, et al., 91 Phil. 531)
Building Mortgaged Separately from the Land on Which It Has Been Built:
o A mortgage of land necessarily includes, in the absence of stipulation, the improvements
thereon, including buildings, still a building by itself may be mortgaged apart from the land
on which it has been built. Such a mortgage would still be a real estate mortgage for the
building would still be considered immovable property even if dealt with separately and
apart from the land. (Leung Yee v. Strong Machinery Co., 37 Phil. 644)
o In case such a building is made the subject of a chattel mortgage, and the mortgage is
registered in the chattel mortgage registry, the mortgage would still be void insofar as third
persons are concerned (Evangelista v. Alto Surety and Ins., Co., Inc., L-11139, Apr. 23, 1958)
o NOTE: There is no legal compulsion to register (to serve as notice to third persons),
transactions over buildings that do not belong to the owners of the lands on which they
stand. There is NO registry in this jurisdiction of buildings apart from the land. (Manalansan
v. Manalang, et al., L-13646, July 26, 1960)
Sale or Mortgage of a Building which Would Be the Object of Immediate Demolition:
- A building that is sold or mortgaged and which would immediately be demolished may
be considered personal property and the sale or mortgage thereof would be a sale of
chattel, or a chattel mortgage respectively, for the true object of the contract would be
the materials thereof. (Bicerra, et al. v. Teneza, et al., L-16218, Nov. 29, 1962)
Ministerial Duty of the Registrar of Property:
- the registrar has the ministerial duty to record the chattel mortgage since he is not
empowered to determine the nature of any document of which registration is sought as
a chattel mortgage. (Standard Oil Co. v. Jaranillo, 44 Phil. 631)
 Construction of all kinds - Though the law says “constructions of all kinds adhered to the soil,”
it is understood that the attachment must be more or less permanent (there is an intent to
permanently annex the same).
Example: Wall, fence, railroad tracks etc.
- NOTE: wooden scaffoldings on which painters stand while painting the walls of a house
are merely personal property in view of the lack of “adherence” to the soil.

Under Paragraph 2:
 Trees and plants while attached to the land or form an integral part of an immovable –
Note: may either be immovable by incorporation or by nature
o classified by incorporation if planted thru labor
- becomes personal property if they are detached or uprooted from the land.
Exception: Uprooted timber from timber land – still forms “an integral part” of the timber
land
o Registration of Land Containing Trees and Plants:
trees and plants annexed to the land are parts thereof, and unless rights or interests in such
trees or plants are claimed in the registration proceedings by others, they become the
property of the person to whom the land is adjudicated (Lavarro v. Labitoria, 54 Phil. 788)

 Growing fruits/growing crops/standing crops/ungathered crops – classified by incorporation

as express by codal provisions.
o Growing Crops on One’s Own Land
- Rules of Court: growing crops attached in the same way as real property.
- Chattel Mortgage Law: growing crops may be considered as personal property, and may
thus be the subject of a chattel mortgage (Sibal v. Valdez, 50 Phil. 512)
- Sale of growing crops: sale of personal property (when crops are sold, understood as
gathered)
- Geguillana v. Buenaventura, et al., [CA] GR 3861-R, Jan. 31, 1951 – “coconut trees
remain real property even if sold separate and apart from the land on which they grow
— as long as the trees are still attached to the land or form an integral part thereof.”
o Growing Crops on Another’s Land
- Growing crops whether on one’s land or on another’s, as in the case of a usufructuary, a
possessor or a tenant, should be considered real property.
- Real: still attached to the land
- Personal: once severed, even if left scattered or lying about the land

Paragraph 3: Everything attached to an immovable in a fixed manner, in such a way that it

cannot be separated therefrom without breaking the material or deterioration of the object

BY DESTINATION OR PURPOSE:
Those which are placed in an
immovable for the use, exploitation or
perfection of such immovable, such as
those mentioned in Par. 4, 5, 6, 7 and
9 of Art. 415
 like machinery placed by the
owner of a tenement on it for
direct use in an industry to be
carried on therein
o Under this paragraph, for the incorporated thing to be considered real property, the
injury or breakage or deterioration in case of separation, must be SUBSTANTIAL.
o Ex: A fixed fire escape stairway firmly embedded in the walls of a house, an aqueduct, or a
sewer, or a well.
o If properties are temporarily removed: should be regarded as personal property inasmuch
as the “incorporation” has ceased.
Paragraph 4: Statues, reliefs, paintings or other objects for use or ornamentation, placed in
buildings or on land by the owner of the immovable in such a manner that it reveals the
intention to attach them permanently to the tenements – considered as real property by
incorporation and destination.
o Ex: A fixed statue in the garden of a house, a permanent painting on the ceiling, a picture
embedded in the concrete walls of a house, a rug or carpet fastened to the floor, as in the
case of wall to wall carpeting while a PC or Picture hanging on the wall should be considered
chattel.
o The objects must be placed by the owner, his agent, or if he be insane, thru his duly
appointed guardian of the immovable (buildings or lands) and not necessarily by the owner
of the object (Valdez v. Altagracia, 225 U.S. 58)
o If placed by a mere tenant, the objects must remain chattels or personalty for the purposes
of the Chattel Mortgage Law. (Davao Sawmill v. Castillo, 61 Phil. 709)
Paragraph 4: Considered as real property by incorporation and destination. It must be noted that
these objects must be placed by their owners permanently to the land or building even if such
land or building is not owned by him. The intent of the owner of the objects must be looked
upon so as to know that he wanted to incorporate it permanently which would make these
objects also immovable. Further discussion can be read from above.
Paragraph 5: 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.
ESSENTIAL REQUISITES:
1. The placing must be made by the owner of the tenement, his agent, or duly authorized
legal representative
2. The industry or works must be carried on in the building or on the land. A transportation
business is not carried on in a building or in the compound. (Mindanao Bus Co. v. City
Assessor, L-17870, Sep. 29, 1962)
3. The machines, etc., must tend directly to meet the needs of said industry or works
 4. The machines must be essential and principal elements in the industry, and not merely
incidental.
o machineries of breweries used in the manufacture of liquor and soft drinks, though
movable by nature, are immobilized because they are essential to said industries;
but the delivery trucks and adding machines which they usually own and use and
are found within their industrial compounds are merely incidentals and retain their
movable nature. (Mindanao Bus Co. v. City Assessor and Treasurer, L-17870, Sep. 29,
1962)
Effect of Separation - If the machine is still in the building, but is no longer used in the industry
conducted therein, the machine reverts to the condition of a chattel. Upon the other hand, if
still needed for the industry, but separated from the tenement temporarily, the property
continues to be immovable.
Examples of the machinery, receptacles, instruments, implements
1. Machines placed in a sugar central (and therefore, if the central has already been the
subject of a real estate mortgage, the machines become subject also to such mortgage).
(Berkenkotter v. Cu Unjieng, 61 Phil. 663)
2. Machines attached to concrete foundations of buildings in a fixed manner such that they
cannot be separated therefrom without unbolting the same and cutting some of their
wooden supports. (Machinery v. Pecson, L-7057, Oct. 29, 1954)
Cases
o Tenant placing machines for use in a saw mill on the land of the landlord - the machinery
should be considered as personal, since it was not placed on the land by the owner of said
land. (Davao Sawmill Co. v. Castillo 61 Phil. 709)
o Tenant had promised to give the machinery later to the owner of the land; or suppose the
tenant acted only as the agent of the owner of the land - the machinery would be
considered as real property in both instances. “Machinery placed on property by a tenant
does not become immobilized: when however, a tenant places it there pursuant to a
contract that it shall belong to the owner, it becomes immobilized as to that tenant and
his assigns having notice, although it does not become so as to the creditors not having
legal notice of the lease.’’ (Davao Sawmill Co., Inc. v. Castillo, supra)
o after-acquired properties will be immobilized by destination if the parties to the real
mortgage had treated the after-acquired properties as real properties by agreeing that
they would be automatically subject to the lien of the real estate mortgage executed by
them. (People’s Bank and Trust Co. v. Dahican Lumber Co. L-17500, May 16, 1967)

Paragraph 6: Animal houses, pigeon-houses, beehives, fishponds or breeding places of similar

nature, in case their owner has placed them or preserves them with the intention to have them

BY ANALOGY:
Those which are considered property
immovable by operation of law
because it is regarded as united to the
permanently attached to the land, and forming a permanent part of it; the animals in these
places are included.
o “houses” referred to here may already be deemed included in paragraph 1 when speaking
of “constructions of all kinds adhered to the soil.”
o The constructions mentioned must be intended by the owner to be permanently a part
of the land. The animals though can be transferred from place to place are also included.
o Animals temporarily outside - still be considered as “real property,’’ as long as the intent
to return is present, as in the case of a homing pigeon. But from the point of view of
criminal law, they must be considered as personal property, and may properly be the
object of theft or robbery.
o Alienation of the Animals - When the animals inside the permanent animal houses are
alienated onerously or gratuitously, it is believed that the transaction is an alienation of
personal property, unless the building or the tenement is itself also alienated.
o Temporary structures of Cages - A temporary bird cage easily removable, or which may
be carried from place to place, is a chattel. The birds inside are also chattel.
Paragraph 7: Fertilizer actually used on a piece of Land - These are immovable by destination.
If they are used, they form part of the land.
o Fertilizers still in the barn and even those already on the ground but wrapped inside some
newspapers or any other covering are still to be considered personal property, for they
have not yet been “actually” used or spread over the land.
Paragraph 9: Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, or coast.
o Floating house - the classification of the accessory (the floating house) follows the
classification of the principal (the waters). However, if the floating house makes it a point
to journey from place to place, it assumes the category of a vessel.
o Vessels - Vessels are considered personal property. As a matter of fact, they are indeed
very movable. (Philippine Refining Co., Inc. v. Jarque, 61 Phil. 229)
o Although vessels are personal property, they partake to a certain extent of the nature and
conditions of real property because of their value and importance in the world of
commerce. Hence, the rule in the Civil Code with reference to acquisition of rights over
immovable property (particularly the rules on double sale) can be applied to vessels.
Paragraph 10: Contracts for public works, and servitudes and other real rights over immovable
o Old Civil Code: “administrative concessions for public works” were used instead of
“contracts for public works.
Rights
 property such as those mentioned in o Properties referred to in paragraph 10 are not material things but rights, which are
Par. 10 of Art. 415 necessarily intangible.
 (like the right of usufruct, or a o The piece of paper on which the contract for public works has been written is necessarily
contract for public works, or personal property, but the contract itself, or rather, the right to the contract, is real
easements and servitudes, or property.
“sugar quotas” under o A servitude or easement is an encumbrance imposed on an immovable for the benefit
Republic Act 1825 and of another immovable belonging to another owner, or for the benefit of a person, group
Executive Order 873. of persons, or a community
(Presbitero v. Fernandez, L- o Other real rights over real property include real mortgage (Hongkong and Shanghai Bank
19527, Mar. 30, 1963) v. Aldecoa and Co., 30 Phil. 255), antichresis, possessory retention, usufruct and leases
of real property, when the leases have been registered in the Registry of Property; or
even if not registered, if their duration is for more than a year. Upon the other hand, the
usufruct of personal property or a lease of personal property, should be considered
personal property.
Real Property by Analogy
- properties or rights referred to in paragraph 10 are considered real property by analogy,
inasmuch as, although they are not material, they nevertheless partake of the essential
characteristics of immovable property
MOVABLE/PERSONAL PROPERTY UNDER THE OF THE CIVIL CODE
CLASSIFICATION UNDER ART. 416 CLASSIFICATION UNDER ART. 417 CLASSIFICATION UNDER ART. 418
Paragraph 1 Paragraph 1 By NATURE:
Those movables susceptible of appropriation which Obligations and actions which have for their object  Consumable - this cannot be used according to its
are not included in the preceding article movables or demandable sums nature without its being consumed
- By appropriability it means that it can be - This provision contemplate various contracts
capable of being possessed by men. Therefore which have for their object movable properties  Non-consumable - any other kind of movable
all other things which are not falling under Art. or demandable sums or those amounts which property.
415 are considered as personal property are liquidated or determined. Being so, the
subject matter being movable, it makes the By INTENTION of the parties:
Examples: right created therein as likewise personal right.  Fungible – capable of substitution by other things of
o a fountain pen; a piano; animals the same quantity or quality
Examples:
Paragraph 2 o If my debtor owes me P1 million, my credit as well  Non-fungible - Incapable of such substitution, hence,
Real property which by any special provision of law is as my right to collect by judicial action is also the identical thing must be given or returned.
considered as personalty personal property. This is because, although the
- There are properties which by nature are real law uses the term “obligations,” same really refers EXPLANATION:
properties. However, special laws and judicial to rights or credits. - If it is agreed that the identical thing be
decisions may define them in another manner. returned, it is non-fungible, even though by
 These will be controlling and will therefore o A promissory note is personal property; the right nature it is consumable and if someone
adopt the status of being a personal property to collect it is also personal property; but a borrows a sack of rice, not for consumption but
instead. mortgage on real estate is real property by for display or exhibition, the rice is considered
analogy. (Hilado v. Register of Deeds, 49 Phil. 542) non-fungible.
Examples: o If somebody steals a car, the right to bring an - If it as agreed that the equivalent be returned,
o growing crops for the purposes of the Chattel action to recover the automobile is personal the property is fungible. Hence, if someone
Mortgage Law property by itself. borrows vinegar for consumption and promise
o machinery placed on a tenement by a tenant to return an equivalent amount of the same
who did not act as the agent of the tenement Paragraph 2 quality, the property is not consumable; it is
owner. Shares of stock of agricultural, commercial and also fungible
industrial entities, although they may have real estate - Law of credit transactions: a loan of rice for
Paragraph 3 - This provision includes all juridical entities consumption = a simple loan or mutuum; a
Forces of nature which are brought under control by although they do not issue shares of stock loan of rice for exhibition = commodatum
science which may mean participation or interest in a NOTE:
- These forces of nature may be for example, business. This also recognizes that although o Civil Code in many instances uses the
electricity, gas, heat, light, oxygen and so forth real estate are involved, the law still considers words “consumable” and “fungible”
which, if controlled by man and became them personal property. interchangeably.
subject of appropriation, will become personal o Fungibles are those replaceable by an
properties Examples: equal quality and quantity, either by
o A share of stock in a gold mining corporation is nature of things, or by common
Examples: personal property; but the gold mine itself, as well agreement. If irreplaceable, because
o electricity, gas, light, nitrogen as any land of the corporation, is regarded as real the identical objects must be returned,
property by the law. The certificate itself they are referred to as non- fungibles.
Paragraph 4 evidencing ownership of the share, as well as the
In general, all things which can be transported from share itself, is regarded as personal property.
place to place without impairment of the real property Being personal, it may be the object of a chattel
to which they are fixed mortgage. (Chua Guan v. Samahang Magsasaka,
- By nature these things which can be Inc., 62 Phil. 472)
transported from place to place without o Even if the sole property of a corporation should
causing impairment to where they are consist only of real property, a share of stock in
previously attached is movable. said corporation is considered personal property.
(Cedman v. Winslow, 10 Mass. 145)
Examples:
o machinery not attached to land nor needed Enforcement of Property Rights in Shares of Stock
for the carrying on of an industry conducted o “Shares of stock are a peculiar kind of personal
portable radio; a laptop computer; dimploma property, and are unlike other classes of personal
hanging on the wall property in that the property right of shares of
stock can only be exercised or enforced where the
 corporation is organized and has its place of
business, and can exist only as an incident to and
connected with the corporation, and this class of
property is inseparable from the domicile of the
corporation itself.’’ (Black Eagle Mining Co. v.
Conroy, et al., 221 Pac. 425, 426)
o In domestic circulation, money is legal tender and
is, therefore, NOT merchandise however, it is
attempted to be exported or smuggled, it is
deemed to be taken out of domestic circulation
and may be, therefore, now considered as
merchandise or commodity subject to forfeiture
pursuant to Central Bank Circular 37 in relation to
Section 1363(f) of the Revised Administrative
Code. (Com. of Customs v. Capistrano, L-11075,
June 30, 1960)
o NOTE: whether money is legal tender or not,
whether it is merchandise or not, it still is
PERSONAL property.