Tsai vs.

CA (366 SCRA 324)

FACTS:  

Ever Textile
Mills, Inc.
(EVERTEX)
obtained loan
from
Philippine
Bank of
Communicatio
ns (PBCom),
secured by a
deed of Real
and Chattel
Mortgage over
the lot where
its factory
stands, and the chattels located therein as

.
enumerated in a schedule attached to the mortgage contract

PBCom again
granted a
second loan to
EVERTEX
which was
secured by a
Chattel
Mortgage over
personal
properties
enumerated in
a list attached
thereto.  These
listed
properties
were similar to
those listed in
the first
mortgage
deed.  After
the date of the
execution of
the second
mortgage
mentioned
above,
EVERTEX
purchased
various
machines and
equipments. 
Upon
EVERTEX's
failure to meet
its obligation
to PBCom, the
latter
commenced
extrajudicial
foreclosure
proceedings
against
EVERTEX
under "The
Chattel
Mortgage
Law". 
PBCom then
consolidated
its ownership
over the lot
and all the
properties in
it.  It leased
the entire
factory
premises to
Ruby Tsai and
sold to the
same the
factory, lock,
stock and
barrel
including the
contested
machineries.
           
EVERTEX
filed a
complaint for
annulment of
sale,
reconveyance,
and damages
against
PBCom,
alleging inter
alia that the
extrajudicial
foreclosure of
subject
mortgage was
not valid, and
that PBCom,
without any
legal or factual
basis,
appropriated
the contested
properties
which were not
included in the
Real and
Chattel
Mortgage of
the first
mortgage
contract nor in
the second
contract which
is a Chattel
Mortgage, and
neither were
those
properties
included in the
Notice of
Sheriff's Sale.
ISSUES:
W/N the
contested
properties are
personal or
movable
properties 
Held: Yes. The
nature of the
disputed
machineries,
i.e., that they
were heavy,
bolted or
cemented on
the real
property
mortgaged
does not make
them ipso
facto immovab
le under
Article 415 (3)
and (5) of the
New Civil
Code.  While it
is true that the
properties
appear to be
immobile, a
perusal of the
contract of
Real and
Chattel
Mortgage
executed by
the parties
herein  reveal
their intent,
that is - to
treat
machinery and
equipment as
chattels. 
In the instant
case, the
parties herein:
(1) executed a
contract styled
as "Real
Estate
Mortgage and
Chattel
Mortgage,"
instead of just
"Real Estate
Mortgage" if
indeed their
intention is to
treat all
properties
included
therein as
immovable,
and (2)
attached to the
said contract a
separate
"LIST OF
MACHINERI
ES &
EQUIPMENT
". These facts,
taken together,
reveal the
conclusion that
the parties'
intention is to
treat these
units of
machinery as
chattels.
In the first mortgage contract,  reflective of the true intention of
PBCOM and EVERTEX was the typing in capital letters, immediately
following the printed caption of mortgage, of the phrase "real and
chattel." So also, the "machineries and equipment" in the printed
form of the bank had to be inserted in the blank space of the printed
contract and connected with the word "building" by typewritten
slash marks.  Now, then, if the machineries in question were
contemplated to be included in the real estate mortgage, there would
have been no necessity to ink a chattel mortgage specifically
mentioning as part III of Schedule A a listing of the machineries
covered thereby.  It would have sufficed to list them as immovables
in the Deed of Real Estate Mortgage of the land and building
involved.  As regards the second contract, the intention of the
parties is clear and beyond question.  It refers solely to chattels.  The
inventory list of the mortgaged properties is an itemization of 63
individually described machineries while the schedule listed only
machines and 2,996,880.50 worth of finished cotton fabrics and
natural cotton fabrics.