LUNA V.

ENCARNACION FACTS: A chattel mortgage was executed by petitioner Jose Luna covering his house with mixed materials to respondent Trinidad Reyes to secure payment for a promissory note. Luna failed to pay the promissory note and as such, Trinidad requested the sheriff to sell the property through an extra judicial foreclosure to satisfy the obligation. Luna contends that the foreclosure is invalid because the property is under chattel mortgage and as such, it is not covered by RA3135 that only speaks of real estate mortgage. ISSUE: WON the mortgaged property can be covered by chattel mortgage even though it is a real property. HELD: Even though the property is a real property, it may be covered by a chattel mortgage for as long as it was agreed upon by the parties. Hence, the foreclosure is invalid because it is only applicable for real properties. The remedy of the respondent is to file an action for recovery of possession and not a writ of possession. LEUNG YEE V. STRONG MACHINERY COMPANY FACTS: FACTS: Compania Agricola Filipina bought rice-cleaning machinery from the machinery company and this was secured by a chattel mortgage on the machinery and the building to which it was installed. Upon failure to pay, the chattel mortgage was foreclosed, the building and machinery sold in public auction and bought by the machinery company. Days after, the Compania Agricola Filipina executed a deed of sale over the land to which the building stood in favor of the machinery company. On or about the date to which the chattel mortgage was excecuted, Compania executed a real estate mortgage over the building in favor of Leung Yee, distinct and separate from the land. HELD:

The building in which the machinery was installed was real property, and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed the character as real property. The ruling should be in favor of the machine company because the plaintiff is not a buyer in good faith and the former is first in possession of the property. (1544) SIBAL V. VALDEZ FACTS: On 14 December 1924, action was commenced in the CFI of the Province of Tarlac. The plaintiff alleged that the deputy sheriff of Tarlac Province attached and sold to Valdez the sugar cane planted by the plaintiff and his tenants on 7 parcels of land, and that within 1 year from the date of the attachment and sale the plaintiff ordered to redeem said sugar cane and tendered to Valdez the amount sufficient to cover the price paid by the latter, with taxes and interests, and that Valdez refused to accept the money and return the sugar cane to the plaintiff. After hearing and on 28 April 1926, the judge (Lukban) rendered judgment in favor of the defendant holding that the sugar cane in question was personal property and, as such, was not subject to redemption; among others. HELD: For the purpose of attachment and execution, and for the purposes of the Chattel Mortgage Law, ungathered products have the nature of personal property. The lower court, therefore, committed no error in holding that the sugar cane in question was personal property and, as such, was not subject to redemption.

platforms. The City Assessor of Cagayan de Oro City assessed at P4,400 said maintenance and repair equipment. The company appealed the assessment to the Board of Tax Appeals on the ground that the same are not realty. ISSUE: WON the machineries of the bus company can be considered as a real property for purposes of taxation. HELD: The equipments in question are not absolutely essential to the petitioners transportation business, and petitioners business is not carried on in a building, tenement or on a specified land, so said equipment may not be considered real estate within the meaning of Article 415 (c) of the Civil Code.

BERKENKOTTER V. CU UNJIENG FACTS: On 26 April 1926, the Mabalacat Sugar Company obtained from Cu Unjieng e Hijos, a loan secured by a first mortgage constituted on 2 parcels of land "with all its buildings, improvements, sugar-cane mill, steel railway, telephone line, apparatus, utensils and whatever forms part or is a necessary complement of said sugar-cane mill, steel railway, telephone line, now existing or that may in the future exist in said lots. On 5 October 1926, the Mabalacat Sugar Company decided to increase the capacity of its sugar central by buying additional machinery and equipment, so that instead of milling 150 tons daily, it could produce 250. HELD: For the foregoing considerations, we are of the opinion and so hold: (1) That the installation of a machinery and equipment in a mortgaged sugar central, in lieu of another of less capacity, for the purpose of carrying out the industrial functions of the latter and increasing production, constitutes a permanent improvement on said sugar central and subjects said machinery and equipment to the mortgage constituted thereon (article 1877, Civil Code); (2) that the fact that the purchaser of the new machinery and equipment has bound himself to the person supplying him the purchase money to hold them as security for the

MINDANAO BUS V. CITY ASSESSOR FACTS: Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by motor trucks in Mindanao; having its main offices in Cagayan de Oro. The company is also owner to the land where it maintains and operates a garafe, a repair shop, blacksmith and carpentry shops; the machineries are place therein on wooden and cement

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payment of the latter's credit, and to refrain from mortgaging or otherwise encumbering them does not alter the permanent character of the incorporation of said machinery and equipment with the central; and (3) that the sale of the machinery and equipment in question by the purchaser who was supplied the purchase money, as a loan, to the person who supplied the money, after the incorporation thereof with the mortgaged sugar central, does not vest the creditor with ownership of said machinery and equipment but simply with the right of redemption. AGO V. COURT OF APPEALS October 31, 1962 FACTS: Pastor D. Ago bought sawmill machineries and equipments from Grace Park Engineering, Inc., executing a chattel mortgage over said machineries and equipments to secure the payment of a balance of the price remaining unpaid of P32,000.00, which Ago agreed to pay on installment basis. Ago defaulted in his payments and so, in 1958, Grace Park Engineering, Inc. instituted extrajudicial foreclosure proceedings of the mortgage. The Provincial Sheriff of Surigao, acting upon the writ of execution, levied upon and ordered the sale of the sawmill machineries and equipments in question. HELD: By reason of installment in a building, the said sawmill machineries and equipments became real estate properties in accordance with the provision of Art. 415(5) of the Civil Code. It is interpreted similarly to the case of Berkenkotter vs. Cu Unjieng e Hijos, where the Court held that the installation of the machinery and equipment in the central of the Mabalacat Sugar Company for use in connection with the industry carried by that company, converted the said machinery and equipment into real estate by reason of their purpose. In the present case, the installation of the sawmill machineries in the building of the Golden Pacific Sawmill, Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent part of the building or real estate on which the same was constructed, converting the said machineries and equipments into real estate within the meaning of

Article 415(5) of the Civil Code of the Philippines.

MERALCO V. BOARD OF ASSESSMENT APPEALS FACTS: This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric Company on a lot in San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), Inc. The tanks are within the Caltex refinery compound. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The municipal treasurer required Meralco to pay realty taxes on both tanks. ISSUE: WON the tanks should be considered as real property. HELD: The two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. BOARD OF ASSESSMENT APPEALS VS. MERALCO FACTS: The case of Board of Assessment Appeals vs. Manila Electric Company, 119 Phil. 328, wherein Meralcos steel towers were held not to be subject to realty tax, is not in point because in that case the steel towers were regarded as poles and under its franchise Meralcos poles are exempt from taxation. Moreover, the steel towers were not attached to any land or building. They were removable from their metal frames. DAVAO SAWMILL V. CASTILLO FACTS: The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao, Province of Davao. However, the land upon which the business was conducted belonged to another person. On the land the sawmill company erected a building which housed the machinery used by it. The owner of the land claims that the machineries should be transferred to their ownership because of the provision in the contract that buildings and improvements will belong to the land owner at the end of the contract. HELD: The law is clear that the machineries are personal properties and not part of the building because they were not placed by the owner. SORIANO, VS. SPOUSES GALIT FACTS; Petitioner was issued a writ of possession in Civil Case No. 6643[1] for Sum of Money by the Regional Trial Court of Balanga, Bataan, Branch 1. The writ of possession was, however, nullified by the Court of Appeals in CA-G.R. SP No. 65891[2] because it included a parcel of land which was not among those explicitly enumerated in the Certificate of Sale issued by the Deputy Sheriff, but on which stand the immovables covered by the said Certificate. Petitioner contends that the sale of these immovables necessarily encompasses the land on which they stand. HELD: The foregoing provision of the Civil Code enumerates land and buildings separately. This can only mean that a

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building is, by itself, considered immovable.[39] Thus, it has been held that . . . while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such mortgage would be still a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land. In this case, considering that what was sold by virtue of the writ of execution issued by the trial court was merely the storehouse and bodega constructed on the parcel of land covered by Transfer Certificate of Title No. T40785, which by themselves are real properties of respondents spouses, the same should be regarded as separate and distinct from the conveyance of the lot on which they stand.

The pipeline system in question is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline. Insofar as the pipeline uses valves, pumps and control devices to maintain the flow of oil, it is in a sense machinery within the meaning of the Real Property Tax Code. It should be borne in mind that what are being characterized as real property are not the steel pipes but the pipeline system as a whole. Meralco Securities has apparently two pipeline systems. Fels Energy vs Province of Batangas February 16, 2007 Facts: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over 3x30 MW diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The contract, denominated as an Energy Conversion Agreement, was for a period of five years. Article 10 states that NPC shall be responsible for the payment of taxes. Polar Energy then assigned its rights under the Agreement to Fels despite NPCs initial opposition. FELS received an assessment of real property taxes on the power barges from Provincial Assessor Andaya of Batangas City. FELS referred the matter to NPC, reminding it of its obligation under the Agreement to pay all real estate taxes. The LBAA (Local Board Of Assessment Appeals Of Batangas) Fels to pay the real estate taxes. The LBAA ruled that the power plant facilities, while they may be classified as movable or personal property, are nevertheless considered real property for taxation purposes because they are installed at a specific location with a character of permanency. The LBAA also pointed out that the owner of the bargesFELS, a private corporationis the one being taxed, not NPC. A mere agreement making NPC responsible for the payment of all real estate taxes and assessments will not justify the exemption of FELS. Issue: WON the petitioner may be assessed real property taxes Held: Yes Ratio: The CBAA and LBAA power barges are real property and are thus subject to real property tax. Tax assessments by tax examiners are presumed correct and made in good

faith, with the taxpayer having the burden of proving otherwise. Moreover, Article 415 (9) of the New Civil Code provides that [d]ocks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work.

DELA CRUZ V. CA

MERALCO SECURITIES INDUSTRIAL CORPORATION V. CENTRAL BOARD OF ASSESSMENT APPEALS FACTS: In this special civil action of certiorari, Meralco Securities Industrial Corporation assails the decision of the Central Board of Assessment Appeals (composed of the Secretary of Finance as chairman and the Secretaries of Justice and Local Government and Community Development as members) dated May 6, 1976, holding that Meralco Securities' oil pipeline is subject to realty tax. HELD: Meralco Securities insists that its pipeline is not subject to realty tax because it is not real property within the meaning of article 415. This contention is not sustainable under the provisions of the Assessment Law, the Real Property Tax Code and the Civil Code. Article 415[l] and [3] provides that real property may consist of constructions of all kinds adhered to the soil and 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.

FACTS: Petitioner possessed and occupied the land after it had been declared by the government as part of the forest reserve. In fact, the land remained as part of the forest reserve until such time it was reclassified into alienable or disposable land at the behest of the Ramoses. A positive act of the government is needed to declassify land which is classified as forest, and to convert it into alienable and disposable land for other purposes. Until such lands have been properly declared to be available for other purposes, there is no disposable land to speak of. Absent the fact of reclassification prior to the possession and cultivation in good faith by petitioner, the property occupied by him remained classified as forest or timberland, which he could not have acquired by prescription. BEnguet Corporation vs Central Board of Assesment Appeals HELD: A reading of that section shows that the tailings dam of the petitioner does not fall under any of the classes of exempt real properties therein enumerated. Is the tailings dam an improvement on the mine? Section 3(k) of the Real Property Tax Code defines improvement as follows: (k) Improvements is a valuable addition made to property or

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an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adopt it for new or further purposes. The term has also been interpreted as "artificial alterations of the physical condition of the ground that are reasonably permanent in character. it would appear that whether a structure constitutes an improvement so as to partake of the status of realty would depend upon the degree of permanence intended in its construction and use. The expression "permanent" as applied to an improvement does not imply that the improvement must be used perpetually but only until the purpose to which the principal realty is devoted has been accomplished. It is sufficient that the improvement is intended to remain as long as the land to which it is annexed is still used for the said purpose. The Court is convinced that the subject dam falls within the definition of an "improvement" because it is permanent in character and it enhances both the value and utility of petitioner's mine.

HELD: agricultural lands of the public domain, natural resources cannot be alienated. The Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750 hectare reclamation project have been reclaimed, and the rest of the area are still submerged areas forming part of Manila Bay. Further, it is provided that AMARI will reimburse the actual costs in reclaiming the areas of land and it will shoulder the other reclamation costs to be incurred. The foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters and other natural resources and consequently owned by the State. As such, foreshore and submerged areas shall not be alienable unless they are classified as agricultural lands of the public domain. The mere reclamation of these areas by the PEA doesnt convert these inalienable natural resources of the State into alienable and disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable and disposable if the law has reserved them for some public or quasi-public use. USERO V. CA January 5, 2005 FACTS: Respondents build a concrete fence between their property and the property of the petitioners. Petitioners assailed the building of the said fence on the ground that the property was theirs. ISSUE: WON the space between the two properties is a private property or a public domain. HELD: The mere fact that there are water lilies on the space filled with water proves that there is a permanent stream of water or a creek there. The petitioners also failed to prove their claim of ownership. Art.420 The phrase "others of similar character" includes a creek which is a recess or an arm of a river. It is property belonging to the public domain which is not susceptible to private ownership. Being public water, a creek cannot be registered under the Torrens System in the name of any individual. Accordingly, the petitioners may utilize the rip-rapped portion of the creek to prevent the erosion of their property.

lands by the Manila International Airport Authority for non payment of real estate taxes from 1992-2001. ISSUE: WON the properties of MIAA are owned by the state. HELD: MIAA is not a GOCC, but an instrumentality of the government. The Republic remains the beneficial owner of the properties. MIAA itself is owned solely by the Republic. At any time, the President can transfer back to the Republic title to the airport lands and buildings without the Republic paying MIAA any consideration. As long as the airport lands and buildings are reserved for public use, their ownership remains with the State. Unless the President issues a proclamation withdrawing these properties from public use, they remain properties of public dominion. As such, they are inalienable, hence, they are not subject to levy on execution or foreclosure sale, and they are exempt from real estate tax. However, portions of the airport lands and buildings that MIAA leases to private entities are not exempt from real estate tax. In such a case, MIAA has granted the beneficial use of such portions for a consideration to a taxable person. CEBU OXYGEN AND ACETYLENE CO. V. BERCILLES 66 SCRA 431 FACTS: The land sought to be registered in this case was formerly a part of a street. Through a resolution, it was declared to be an abandoned road and not part of the City development plan. Thereafter, it was sold through a public bidding and petitioner was the highest bidder. He then sought to register said land but his application was dismissed. HELD: The portion of the city street subject to petitioners application for registration of title was withdrawn from public use. Then it follows that such withdrawn portion becomes patrimonial property of the State. It is also very clear from the Charter that property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed

US VS CARLOS FACTS: Accused was charged with larceny or the unlawful use of electric current. ISANG napakahabang discussion sa electricity HELD: From the foregoing it is plain that property to be personal property must not only be susceptible of appropriation, which the court in the quoted paragraph claims is the only requirement, but it must also be capable of being of itself manually seized and transported from one place to another. (Electricity is a property) INVOLUNTARY INSOLVENCY STROCHECKER V. RAMIREZ OF

FACTS: Three mortgages were seeking preference in the lower court. The one of Fidelity and Surety Co. alleged that it should be given preference as the mortgage in favor of Ramirez was not valid as the subject of the mortgage cannot be a proper subject thereof. The subject involved in the 1st mortgage is an interest in business of a drug store.

IN THE MATTER OF REVERSION vs Register of Deeds G.R. No. 171304 October 10, 2007 HELD: In the case at bar, a school, a public market, and a cemetery were built upon the subject property. Unlike a

MIAA v. Court of Appeals 2006 FACTS: The Paraaque City treasurer issued a notice of levy and the warrants of levy on the buildings and

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public square as that in Nicolas or a playground as that in the Province of Zamboanga del Norte, schools, public markets and cemeteries are not for the free and indiscriminate use of everyone. The determination of the persons allowed to study in such schools, or put up stalls in the public market, or bury their dead in public cemeteries are regulated by the government. As such, the subject property is, under the Civil Code classification, patrimonial property, and the Municipality may have the same registered in its name.

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