PROPERTY (CASE DIGEST)

IMMOVABLE/MOVABLE
DAVAO SAW MILL CO., INC., plaintiff-appellant, vs. APRONIANO G. CASTILLO and DAVAO LIGHT
& POWER CO., INC., defendants-appellees.
G.R. NO. L-40411 August 7, 1935
Malcolm, J.:

Facts: The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of
the Philippine Islands, erected a building which housed the machinery for their business on a land
owned by another person. Some of the implements were personal property, and other machines
were placed and mounted on foundations of cement. According to the contract of lease
between the sawmill company and the owner of the land that on the expiration of the period
agreed upon, all the improvements and buildings introduced and erected by the party of the
second part shall pass to the exclusive ownership of the party of the first part without any
obligation on its part to pay any amount for said improvements and buildings; also, in the event
the party of the second part should leave or abandon the land leased before the time herein
stipulated, the improvements and buildings shall likewise pass to the ownership of the party of the
first part as though the time agreed upon had expired: Provided, however, 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.

Issue: Whether the machineries implemented by the Davao Saw Mill Co., Inc., on the leased land
is a personal property.

Rulings: The fact that one only having a temporary right to the possession or enjoyment of property
is not presumed by the law to have applied movable property belonging to him so as to deprive
him of it by causing it by an act of immobilization to become the property of another. It follows
that abstractly speaking the machinery put by the Altagracia Company in the plant belonging to
Sanchez did not lose its character of movable property and become immovable by destination.
But in the concrete immobilization took place because of the express provisions of the lease under
which the Altagracia held, since the lease in substance required the putting in of improved
machinery, deprived the tenant of any right to charge against the lessor the cost such machinery,
and it was expressly stipulated that the machinery so put in should become a part of the plant
belonging to the owner without compensation to the lessee. Under such conditions the tenant in
putting in the machinery was acting but as the agent of the owner in compliance with the
obligations resting upon him, and the immobilization of the machinery which resulted arose in
legal effect from the act of the owner in giving by contract a permanent destination to the
machinery.