REVIEW NOTES ON PROPERTY That the machines should be deemed personal property

By JDy pursuant to the Lease Agreement is good only insofar as the

contracting parties are concerned. Hence, while the parties are
IMMOVABLE PROPERTY bound by the Agreement, 3rd persons acting in good faith are
Characteristics of Immovable Property not affected by its stipulation characterizing the subject
machinery as personal.
1. Immovable by Nature
Ex. Art. 415 (1), (2) when they are spontaneous Provincial Assessor of Agusan del Sur v. Filipinas Palm Oil
products of the soils Plantation GR No. 183416; October 5, 201
2. Immovable by Incorporation – essentially The road equipment and mini haulers shall be considered as
movables; when attached to an immovable becomes real property not by virtue of Article 415[5] of the NCC but
an integral part of the same Section 199 of LGC.
Ex: Article 415 (2) when they are planted through Section 199. Definitions. - When used in this Title:
labor, (3). (o) "Machinery" embraces:
Characteristics of (3) 1. machines, equipment, mechanical contrivances,
a. Cannot be separated from the immovable instruments, appliances or apparatus which may or
without breaking or substantial deterioration may not be attached, permanently or temporarily, to
the real property.
b. Need not be placed by the owner
c. Real property by INCORPORATION
d. The fact of incorporation determines the
thing

3. Immovable by destination or purpose – essentially

movables; for purpose for which they have been
placed they become immovable
Ex: Article 415 (4)
Characteristics of (4)
a. It CAN be separated from the immovable
without breaking or deterioration
b. It MUST be placed by the OWNER or by
his agent, express or implied [If it is placed
by a mere tenant, it will be considered
personal or movable property]
c. It is real property by PURPOSE or
DESTINATION
NOTE: How to differentiate Article 415
(3) and (4). Answer: 1. As to its nature; 2. As to its
separability/deterioration of the immovable property; 3. As to
who places.
4. Immovable by analogy or law
Summary of Article 415. Immovable Property Summary of
Paragraph 5
General Rule – Machinery attached to the land is considered
immovable when:
1. It is placed by the owner of the immovable, his
agent or duly authorized representative
2. It is placed for an industry or work which is
carried on in the building or land
3. The machine tends to directly meet the needs of
such industry or work
4. The machine is essential to the industry or work
and not merely incidental
Exception – Considered movable when the machinery is
placed on the land or tenement by a mere tenant
Exception to Exception – Considered immovable when:
1. The tenant had promised to leave the machinery on the
tenement or the land even after the lease expires, or
2. The tenant acted only as an agent of the owner of the land

Cases on Immovable Properties

Davao Sawmill vs Castillo and DLPC

[GR L-40411; August 7, 1935
The contract provides that “That the machineries and
accessories are not included in the improvements which will
pass to the party of the first part on the expiration or
abandonment of the land leased.” Application of the Exception
on Article 415 (5)

Serg’s Products vs PCI

[GR 137705; August 22, 2000]