Standard Oil vs Jaramillo FACTS: De la Rosa was the lessee of a piece of land, on which a house she owns was

built. She executed a chattel mortgage in

favor of the petitionerpurporting the leasehold interest in the land and the ownership of house.

After such, the petitioner moved for its registration with the Register of Deeds, for the purpose of having the same recorded in the book of record of chattel mortgages. subjects of a chattel mortgage. After examination, the respondent was in the opinion that the properties were not

HELD: Position taken by the respondent is untenable. him any judicial or quasi-judicial power. His duties are mainly ministerial only in nature and no law confers upon

Generally, he should accept the qualification of the property adopted by the

person who presents the instrument for registration and should place the instrument on record, upon payment of the proper fee, leaving the effects of registration to be determined by the court if such question should arise for legal determination. The Civil Code supplies no absolute criterion in discriminating between real property and personal property for purposes of the application of the Chattel Mortgage Law. The articles state general doctrines, nonetheless, it must not be forgotten that under given conditions, property may have character different from that imputed to it in the said articles. It is undeniable that the parties in a contract may by

agreement treat as personal property that which by nature would be real property. LEUNG YEE V. F.L STRONG MACHINERY CO. AND WILLIAMSON 37 SCRA 644 FACTS: 1. First mortgage: 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. 2. 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. This was done to cure any defects that may arise in the machinery companys ownership of the building. 3. Second mortgage: 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. This is to secure payment for its indebtedness for the construction of the building. Upon failure to

pay, the mortgage was foreclosed.

4.

The machinery company then filed a case, demanding that it be declared the rightful owner of the building.

The

trial court held that it was the machinery company which was the rightful owner as it had its title before the building was registered prior to the date of registry of Leung Yees certificate.

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.

It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in the registry of the sale of the mortgaged property, had any effect whatever so far as the building is concerned. *LANDMARK CASE Leung Yee vs FL Strong Machinery Facts: Compania Agricola Filipina bought rice cleaning machinery from L Strong Machinery secured by a chattel mortgage on the machinery and on the building to which it was installed. They failed to pay, thus the chattel mortgage was foreclosed. Almost at the same time as when the chattel mortgage was constituted, the Compania executed a real estate mortgage, separate and distinct from the chattel mortgage, over the lot on which the building was erected in favor of Leung Yee to secure a loan. Compania also failed to pay, and thus, the real estate mortgage was foreclosed; Leung Yee securing in his favor a judgment levying execution upon the building. FL Strong Machinery then filed a case for it to be declared the rightful owner of the building which was granted by the trial court on the ground that it had a title prior to the date of registry of Leung Yees certificate. Issue: WON the registration of the building in the Registry of Chattel Mortgages affected the character of the building and the machineries installed thereon. Held: No. The Chattel Mortgage Law contemplates and makes provision for mortgages of personal property; and the sole purpose and object of the chattel mortgage registry is to provide for the registry of Chattel mortgages, mortgages of personal property executed in the manner and form prescribed in the statute. The building of strong materials 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 its character as real property. It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in that registry of the sale of the mortgaged property, had any effect whatever so far as the building was concerned. Navarro vs Pineda Facts: Pineda and his mother obtained a loan secured by real estate mortgage over a lot and a chattel mortgage over a house owned by a third person and a truck. They failed to pay despite several extensions. Thus, Navarro moved to foreclose the mortgages. Pineda et al now claims that the mortgage over the house cannot give rise to an action for foreclosure considering that only movable property can be the subject of a chattel mortgage, thus, the house, being an immovable, cannot be the subject of a chattel mortgage, the same being a nullity. Issue:

WON a movable property (in this case, the house) can be the subject of a chattel mortgage. Held: Yes. A property may have a character different from that imputed to it in said articles. It is undeniable that the parties to a c ontract may by agreement, treat as personal property that which by nature would be real property But although in some instances, a house of mixed materials has been considered as a chattel between them, has been recognized, it has been a constant criterion nevertheless that, with respect to third persons, who are not parties to the contract, and specially in execution proceedings, the house is considered as an immovable property (Art. 1431, New Civil Code). In the case at bar, the house in question was treated as personal or movable property, by the parties to the contract themselves. In the deed of chattel mortgage, appellant Rufino G. Pineda conveyed by way of Chattel Mortgage my personal properties, a residential house and a truck. The mortgagor himself grouped the house with the truck, which is, inherently a movable property. The house which was not even declared for taxation purposes was small and made of light construction materials: G.I. sheets roofing, sawali and wooden walls and wooden posts; built on land belonging to another. Serg's v. PCI Leasing Sergs Products, Inc. vs. PCI Leasing G.R. No. 137705. August 22, 2000 FACTS:

PCI Leasing and Finance filed a complaint for sum of money, with an application for a writ of replevin.

Judge issued a writ of replevin directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. The sheriff proceeded to petitioner's factory, seized one machinery, with word that he would return for other machineries. Petitioner (Sergs Products) filed a motion for special protective order to defer enforcement of the writ of replevin. PCI Leasing opposed the motion on the ground that the properties were still personal and therefore can still be subjected to seizure and writ of replevin. Petitioner asserted that properties sought to be seized were immovable as defined in Article 415 of the Civil Code. Sheriff was still able to take possession of two more machineries In its decision on the original action for certiorari filed by the Petitioner, the appellate court, Citing the Agreement of the parties, held that the subject machines were personal property, and that they had only been leased, not owned, by petitioners; and ruled that the "words of the contract are clear and leave no doubt upon the true intention of the contracting parties." ISSUE: Whether or not the machineries became real property by virtue of immobilization. Ruling: Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC, because they were in fact real property. Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only. Article 415 (5) of the Civil Code provides that 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 In the present case, the machines that were the subjects of the Writ of Seizure were placed by petitioners in the

factory built on their own land.They were essential and principal elements of their chocolate-making industry.Hence, although each of them was movable or personal property on its own, all of them have become immobilized by destination because they are essential and principal elements in the industry. However, contracting parties may validly stipulate that a real property be considered as personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise.Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. Section 12.1 of the Agreement between the parties provides The PROPERTY is, and shall at all times be and remain, personal property notwithstanding that the PROPERTY or any part thereof may now be, or hereafter become, in any manner affixed or attached to or embedded in, or permanently resting upon, real property or any building thereon, or attached in any manner to what is permanent. The machines are personal property and they are proper subjects of the Writ of Replevin BICERRA v TENEZA G.R. No. L-16218 November 29, 1962 Facts: appellants were the owners of the house, worth P200.00, built on and owned by them and situated in the said municipality Lagangilang; that sometime in January 1957 appealed forcibly demolished the house, claiming to be the owners thereof; that the materials of the house, after it was dismantled, were placed in the custody of the barrio lieutenant of the place; and that as a result of appellate's refusal to restore the house or to deliver the material appellants the latter have suffered damages. Issue: whether the action involves title to real property. Ruling/ Rationale: A house is classified as immovable property by reason of its adherence to the soil on which it is built (Art. 415, par. 1, Civil Code). This classification holds true regardless of the fact that the house may be situated on land belonging to a different owner. But once the house is demolished, as in this case, it ceases to exist as such and hence its character as an immovable likewise ceases.

ASSOCIATED INSURANCE AND SURETY COMPANY V. IYA, ET. AL 103 SCRA 972

FACTS: Spouses Valino were the owners of a house, payable on installments from Philippine Realty Corporation. To be able to purchase on credit rice from NARIC, they filed a surety bond subscribed by petitioner and therefor, they executed an alleged chattel mortgage on the house in favor of the surety company. at the time of the undertaking. The spouses didnt own yet the land on which the house was constructed on

After being able to purchase the land, to be able to secure payment for indebtedness,

the spouses executed a real estate mortgage in favor of Iya.

The spouses were not able to satisfy obligation with NARIC, petitioner was compelled to pay.

The spouses werent able to

pay the surety company despite demands and thus, the company foreclosed the chattel mortgage. It later learned of the real estate mortgage over the house and lot secured by the spouses. This prompted the company to file an action against the spouses. Also, Iya filed another civil action against the

spouses, asserting that she has a better right over the property. The trial court heard the two cases jointly and it held that the surety company had a preferred right over the building as since when the chattel mortgage was secured, the land wasnt owned yet by the spouses making the building then a chattel and not a real property.

HELD: A building certainly cannot be divested of its character of a realty by the fact that the land on which it is constructed belongs to another. To hold it the other way, the possibility is not remote that it would result in confusion, for to cloak the building with an uncertain status made dependent on ownership of the land, would create a situation where apermanent fixture changes its nature or character as the ownership of the land changes hands. In the case at bar, as personal properties may be the only subjects of a chattel mortgage, the execution of the chattel mortgage covering said building is null and void. Government v. Cabangis 53 Phil. 112 FACTS:

In 1896, A owned a parcel of land, but because of the action of the waves of Manila Bay, part of said land was gradually submerged in the sea. It remained submerged until 1912 when the government decided to make the necessary dredging to reclaim the land from the sea. As soon as the land

had been recovered A took possession of it.

Issue: the ownership of the reclaimed land.

HELD: sense in the it

The that letting same. became it it

government has remain Having property

owns become

the property A may of use.

reclaimed of be the When public said sea the

land dominion, to or have the

in

the because abandoned seashore, took

submerged, become for part public

government

steps to make it land again, its status as public dominion remained unchanged; therefore, A is not entitled to the land.

G o v e r n m e n t

o f

t h e

P h i l

I s l a n d s

v s Cabangis

A certain lots we re fo rm erly a part of a la rgeparcel of land belonging to the predeces sor of the herein claim ants and appell ees. From theyear 1896 said land began to wear away, due tothe action of the waves of Manila Bay, until they e a r 1 9 0 1 w h e n t h e s a i d l o t s b e c a m e completely submerged in wa t e r i n o r d i n a r y tides, and rem ained in such a state until 1912 when the Government undertook the dredgingof Vitas Estuary in order to facilitate navigation,depositing all the sand and silt taken from thebed of the estuary on the low lands which werec o m p l e t e l y c o v e r e d w i t h w a t e r , s u r r o u n d i n g that belongi ng to the Phil ippine Man ufacturin gCompany, thereby slowly and gradually formingthe lots, the subject matter of this proceeding. W hether or not the decla rati on of the ro ad as abandoned make it patrimonial property whichmay be the object of a common contract. Held: Since that portion of the city street subject of petitioner's application for registration of titlewas wit hdrawn from public use, it follows thatsuch with dra wn portion becom es patrim onial property which can be the object of an ordinarycontract.Article 422 of the Civil Code expressly providest h a t " P r o p e r t y o f p u b l i c d o m i n i o n , w h e n n o l o n g e r i n t e n d e d f o r p u b l i c u s e o r

f o r p u b l i c s e r v i c e , s h a l l f o r m p a r t o f t h e p a t r i m o n i a l property of the State."Property thus withdrawn from public servitudem ay be used or conveyed for any purpose for which other real property belonging to the Citymay be lawfully used or conveyed.

Cebu Oxygen vs Judge Bercilles on June 24, 2011

Municipal Corporation Patrimonial Property Discretionary Power

In 1968, a terminal portion of a street in Cebu was excluded in the citys development plan hence the council declared it as abandoned and was subsequently opened for public bidding. Cebu Oxygen was the highest bidder @P10,800.00. Cebu Oxygen applied for the lands registration before CFI Cebu but the provincial fiscal denied it, so did the court later, alleging tha t the road is part of the public domain hence beyond the commerce of man.

ISSUE: Whether or not Cebu Oxygen can validly own said land. HELD: Yes. Under Cebus Charter (RA 3857), the city council may close any city road, street or alley, boulevard, avenue, park or square. 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. Since that portion of the city street subject of Cebu Oxygens appli cation for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract. Article 422 of the Civil Code expressly provides that Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. Cebu Oxygen vs Bercilles 66 SCRA 481Facts: This is a case on a petition for the review of theo r d e r o f t h e C o u r t o f F i r s t I n s t a n c e o f C e b u d i s m i s s i n g p e t i t i o n e r ' s a p p l i c a t i o n f o r r e g i s t r a t i o n o f t i t l e o v e r a p a r c e l o f l a n d situated in the City of Cebu. The parcel of land sought to be registered wasonly a portion of M. Borces Street, Mabolo, CebuCity. On Septem ber 23, 1968, the City Co uncil of Cebu, through Resolution No. 2193, approvedo n O c t o b e r 3 , 1 9 6 8 , d e c l a r e d t h e t e r m i n a l portion of M. Borces Street, Mabolo, Cebu City,a s a n a b a n d o n e d r o a d , t h e s a m e n o t b e i n g included in the City Development Plan.Assistant Provincial Fiscal of Cebu filed a motionto dism iss the application on the grou nd that t h e property sought to be registered being ap u b l i c r o a d i n t e n d e d f o r p u b l i c u s e i s considered part of the public domain andtherefore outside the co m m e r c e o f m a n . C o n s e q u e n t l y , i t c a n n o t b e s u b j e c t t o registration by any private individual. Issue: W hether or not the decla rati on of the ro ad as abandoned make it patrimonial property whichmay be the object of a common contract. Held: Since that portion of the city street subject of petitioner's application for registration of titlewas wit hdrawn from public use, it follows thatsuch with dra wn portion becom es patrim onial property which can be the object of an ordinarycontract.Article 422 of the Civil Code expressly providest h a t " P r o p e r t y o f p u b l i c d o m i n i o n , w h e n n o l o n g e r i n t e n d e d f o r p u b l i c u s e o r f o r p u b l i c s e r v i c e , s h a l l f o r m p a r t o f t h e p a t r i m o n i a l property of the State."Property thus withdrawn from public servitudem ay be used or conveyed for any purpose for which other real property belonging to the Citymay be lawfully used or conveyed.

Salas vs Jarencio 46 SCRA 734 Facts:Facts: On February 24, 1919, the 4th Branch of theCourt of First Instance of Manila, acting as a l a n d r e g i s t r a t i o n c o u r t , r e n d e r e d j u d g m e n t d e c l a r i n g t h e C i t y o f M a n i l a t h e o w n e r i n f e e simple of a parcel of land containing an area of 9,689.8 square meters, more or less. On variousdates in 1924, the City of Manila sold portio ns of the aforementioned parcel of land in favor of Pura Villanueva.On September 21, 1960, the Municipal Board of Manila, presided b y the n Vice -Ma yo r Antono J.Villegas, adopted a resolution requesting HisE xcellency, the President of the Philip pines to c o n s i d e r t h e f e a s i b i l i t y o f d e c l a r i n g t h e C i t y propert y bounded by Florid a, San Andres, an d N e b r a s k a S t r e e t s , c o n t a i n i n g a t o t a l a r e a o f 7,450 square meters as a patrimonial propertyof the City of Manila for the purpose of resellingt h e s e l o t s t o t h e a c t u a l o c c u p a n t s t h e r e o f . There is therefore a precedent that this parcelof la nd could be subdi vide d and sold to bonaf i d e o c c u p a n t s . T h e b i l l w a s p a s s e d b y t h e S e n a t e a n d a p p r o v e d b y t h e P r e s i d e n t a n d became RA 4118. Issue: W O N t h e p r o p e r t y i n v o l v e d i n R A 4 1 1 8 i s a private or patrimonial property of the City of Manila. Ruling: T h e c o n c l u s i o n o f t h e r e s p o n d e n t c o u r t t h a t Republic Act No. 4118 converted a patrimonialproperty of the City of Manila i nto a pa rcel of disposable land of the State and took it a wa yf r o m t h e C i t y w i t h o u t c o m p e n s a t i o n i s , therefore, unf ounded. In the last analysis thelan d in qu estion perta ins to the State and theCity of Manila m erely acted as trustee fo r theb e n e f i t o f t h e p e o p l e t h e r e i n f o r w h o m t h e S t a t e c a n l e g i s l a t e i n t h e e x e r c i s e o f i t s legitimate powers.If it were its patrim onial property why shouldthe City of Manila be requesting the President t o m a k e r e p r e s e n t a t i o n t o t h e l e g i s l a t u r e t o d e c l a r e i t a s s u c h s o i t c a n b e d i s p o s e d o f i n favor of the actual occ upants? The re coul d be no more blatant recognition of the fact that saidl a n d b e l o n g s t o t h e S t a t e a n d w a s s i m p l y g r a n t e d i n u s u f r u c t t o t h e C i t y o f M a n i l a f o r municipal purposes. PROVINCE OF ZAMBOANGA DEL NORTE VS. CITY OF ZAMBOANGA, digested Posted by Pius Morados on November 7, 2011 GR# L-24440 March 28, 1968 (Constitutional Law Just Compensation, Patrimonial Property) FACTS: After the incorporation of the Municipality of Zamboanga as a chartered city, petitioner province contends that facilities belonging to the latter and located within the City of Zamboanga will be acquired and paid for by the said city. However, respondent city avers that pursuant to RA No. 3039 providing for the transfer free of charge of all buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga to the said City. ISSUE: Whether or not facilities which the province shall abandon will be acquired by the city upon just compensation. HELD: Yes, If the property is owned by the municipality in its public and governmental capacity, the property is public and can be transferred free of charge. But if the property is owned in its private or proprietary capacity, then it is patrimonial and can be expropriated upon payment of just compensation.

CHAVEZ V. PUBLIC ESTATES AUTHORITY 384 SCRA 152

FACTS: President Marcos through a presidential decree created PEA, which was tasked with the development, improvement, and acquisition, lease, and sale of all kinds of lands. The then president also transferred to PEA the foreshore and offshore lands of Manila Bay under the Manila-Cavite Coastal Road and Reclamation Project.

Thereafter, PEA was granted patent to the reclaimed areas of land and then, years later, PEA entered into a JVA with AMARI for the development of the Freedom Islands. These two entered into a joint venture in the absence of any public bidding. Later, a privilege speech was given by Senator President Maceda denouncing the JVA as the grandmother of all scams. An investigation was conducted and it was concluded that the lands that PEA was conveying to AMARI were lands of the public domain; the certificates of title over the Freedom Islands were void; and the JVA itself was illegal. This prompted Ramos to form an investigatory committee on the legality of the JVA. Petitioner now comes and contends that the government stands to lose billions by the conveyance or sale of the reclaimed areas to AMARI. He also asked for the full disclosure of the renegotiations happening between the parties.

ISSUE: W/N stipulations in the amended JVA for the transfer to AMARI of the lands, reclaimed or to be reclaimed, violate the Constitution.

HELD: The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine, which holds that the State owns all lands and waters of the public domain.

The 1987 Constitution recognizes the Regalian doctrine. It declares that all natural resources are owned by the State and except for alienable 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.

MUNICIPALITY OF CAVITE V. ROJAS G.R. NO. 9069

Facts:

The municipal council of Cavite by Resolution No. 10, leased to Rojas some 70 or 80 square meters of Plaza Soledad, on condition that she pay rent quarterly in advance according to the schedule fixed in Ordinance No. 43, series of 1903 and that she obligate herself to vacate said land within 60 days subsequent to notification to that effect. Upon such notification, however, she refused to

vacate the land, forcing the municipality to file a complaint before the CFI to order her to vacate the land. After a hearing of the case, the CFI dismissed the complaint.

Issues:

(1) Is the contract valid?

(2) If in the negative, what are the obligations of the parties?

Held: (1) No. Article 1271 of the Old Civil Code, prescribes that everything which is not outside the commerce of man may be the object of a contract, and plazas and streets are outside of this commerce. Communal things that cannot be sold because they are by their very nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers, fountains, etc.

(2) Rojas must restore and deliver possession of the land described in the complaint to the municipality of Cavite, which in its turn must restore to her all the sums it may have received from her in the nature of rentals just as soon as she restores the land improperly leased.

Tumalad vs Vicencio41 SCRA 143 Facts: On 1 September 1955 Vicencio and Simeon,d e f e n d a n t s - a p p e l l a n t s , e x e c u t e d a c h a t t e l mortgage in favor of the Tumalads, plaintiff-appellees over their hou s e of s trong materia ls over a lot in Qu iap o, wh ich were being rented from Mad rigal & Company, In c. Th e mortgage was executed to guarantee a loan of P4, 800.00received from theTumalads, payablewithin oneyear at 12% per annum. The mode of paymentwas P150. 00 month ly, It was als o agr eed tha t d e f a u l t i n t h e p a y m e n t o f a n y o f t h e amortizations would cau s e t h e r e m a i n i n g unpaid balance to become immediately due andpayable, the Chattel Mortgage enforceable, and the Sheriff of Manila authorized to sell theM o r t g a g o r s p r o p e r t y a f t e r n e c e s s a r y p u b l i c a t i o n . W h e n V i c e n c i o a n d S i m e o n d e f a u l t e d i n p a y i n g , t h e m o r t g a g e w a s extrajudicially foreclosed, and on 27 March1 9 5 6 , t h e h o u s e w a s s o l d a t p u b l i c a uctionp u r s u a n t t o t h e s a i d c o n t r a c t . A s h i g h e s t b i d d e r , t h e T u m a l a d s w e r e i s s u e d t h e corresponding certificate of sale.On 18 April 1956, the Tumalads commencedcase in th e mun icipa l cou rt of Man ila, prayingtha t th e h ou se b e vaca ted an d its poss ess ions u r r e n d e r e d t o t h e m , a n d f o r V i c e n c i o a n d Simeon to pa y ren t of P200.00 mo n th ly up tothe time the possession is surrendered. Themunicipal court rendered its decision in favor of the Tumalads.Defendant-appellants impugned the legality of the chattel mortgage claiming that they are stillthe own er of the house bu t wa ived their righ ts to introduce evidence.Nearly a year after the foreclosure sale themortgaged h ous e had b een d emolish ed on 14 and 15 January 1957 by virtue of a decisionobtained by the lessor of the land on which thehouse stood for non-payment of rentals. Issues: 1.WON the subject matter of the mortgagewhich is a house of s trong materia l canb e s ubj ect of rea l es tate mortgage or achattel mortgage. 2. W h e t h e r o r n o t t h e d e f e n d a n t s a r e l e g a l l y b o u n d t o p a y r e n t a l s t o t h e plainti f f s d u r i n g t h e p e r i o d o f 1 y e a r provided by law for the redemption of the extrajudicially foreclosed house. Held: T h e i n c l u s i o n o f t h e b u i l d i n g s e p a r a t e a n d distinct from the land in the enumeration of what may constitute real p roperty, that thebuilding is by itself an immovable property.H o w e v e r d e v i a t i o n s h a v e b e e n a l l o w e d f o r various

reasons specially if it is stipulated in thesubject of contract. In the case at bar, althoughthere is n o sp ecific s tatemen t referring to thesubj ect h ous e a s a personal property, yet by ceding, selling or transferring a property by wayof chattel mortgage, defendantsappellantscould only have meant to convey the house asa chattel.Hence if a hou se belong ing to a pers on s tand s on a rented land belonging to another person, itmay be mortgaged as a personal property as sos t i p u l a t e d i n t h e d o c u m e n t o f m o r t g a g e . I t should be noted that the principle is predicatedon statements by the owner declaring his houset o b e c h a t t e l . P a r t y i n a c h a t t e l m o r t g a g e c a n n o t q u e s t i o n t h e v a l i d i t y o f t h e c h a t t e l m o r t g a g e e n t e r e d i n t o . T h e d o c t r i n e o f es top pels th erefore app lies to the defen dan t-appellants.Since the defendant-appellants were occupyingth e h ous e a t the time th e au ction of sale, th ey are entitled to remain in possession during thep eriod of redemption or with in one year from the date of auction sale and to collect the rentsor profits during the said period.And since the plaintiff-appellees right to posseswa s n ot yet born a t the filing of th e complain t, there could be no violation or breach thereof. T h e S u p r e m e C o u r t r e v e r s e d t h e d e c i s i o n appealed from and entered another dismissingthe complaint, with costs against plaintiffs-appellees. BOARD OF ASSESSMENT VS MERALCO Facts: The Philippine Commission enacted Act No. 484which authorized the Municipal Board of Manilato grant a franchise to construct, maintain andoperate an el ectric street rail wa y and electric l i g h t , h e a t a n d p o w e r s y s t e m i n t h e C i t y o f Manila.M e r a l c o ' s e l e c t r i c p o w e r i s g e n e r a t e d b y i t s hydro-el ectric plant located at Botocan Falls, Laguna and is transmitted to the City of Manilab y m e a n s o f e l e c t r i c t r a n s m i s s i o n w i r e s , running from the province of Laguna to the saidCity. These electric transm ission wires whichc a r r y h i g h v o l t a g e c u r r e n t , a r e f a s t e n e d t o insu lators attached on steel towers constructedb y r e s p o n d e n t a t i n t e r v a l s , f r o m i t s h y d r o - electric plant in the pro vince of L agu na to theC i t y o f M a n i l a . T h e r e s p o n d e n t M e r a l c o h a s c o n s t r u c t e d 4 0 o f t h e s e s t e e l t o w e r s w i t h i n Quez on City, on land belonging to it. The City Assessor of Quezon City declared thea f o r e s a i d s t e e l t o w e r s f o r r e a l p r o p e r t y t a x under Tax.Respondent paid the amount under protest, andf i l e d a p e t i t i o n f o r r e v i e w i n t h e C o u r t o f T a x Appeals Issue: W h e t h e r o r n o t t h e M e r a l c o p o l e s c o n s t i t u t e real properties so as they can be subjected to areal property tax. Held: The SC rule d that Me ralco's steel towe rs werec o n s i d e r e d p o l e s w i t h i n t h e m e a n i n g o f paragraph 9 of its franchise which e xem pts itsp o l e s f r o m t a x a t i o n . T h e s t e e l t o w e r s w e r e c o n s i d e r e d p e r s o n a l t y b e c a u s e t h e y w e r e r e m o v a b l e a n d m e r e l y a t t a c h e d t o s q u a r e m etal fram es by m eans of bolts and could bem o v e d f r o m p l a c e t o p l a c e w h e n u n s c r e w e d a n d d i s m a n t l e d . F u r t h e r m o r e , t h e y a r e n o t attached to an imm ovable i n a fi xed m anner, and they can be separated without breaking them a t e r i a l o r c a u s i n g d e t e r i o r a t i o n u p o n t h e object to which they are attached. BH Berkenkotter vs Cu Unjieng 61 Phil 663Facts: T h e M a b a l a c a t S u g a r C o . , I n c . , o w n e r o f t h e sugar central situated in Mabalacat, Pampanga,o b t a i n e d f r o m C u U n j i e n g e H i j o s , a l o a n secured by a first mortgage constituted on twop a r c e l s a n d l a n d " w i t h a l l i t s b u i l d i n g s , im provem ents, sugarcane m ill, steel rail wa y, t e l e p h o n e l i n e , a p p a r a t u s , u t e n s i l s a n d w h a t e v e r f o r m s p a r t o r i s n e c e s s a r y complement of said sugarc a n e m i l l , s t e e l r a i l w a y , t e l e p h o n e l i n e , n o w e x i s t i n g o r t h a t may in the future exist is said lots.S h o r t l y a f t e r s a i d m o r t g a g e h a d b e e n c o n s t i t u t e d , t h e M a b a l a c a t S u g a r C o . , I n c . , decided to increase the capacity of its sugarcentral by buying additiona l m a c h i n e r y a n d equipm ent, so that instead of m illing 150 tons daily, it could produce 250. The estimated costo f s a i d a d d i t i o n a l m a c h i n e r y a n d e q u i p m e n t was approxim ately P100, 000. In order to carryo u t t h i s p l a n , A . G r e e n , p r e s i d e n t o f s a i d c o r p o r a t i o n , p r o p o s e d t o t h e p l a i n t i f f , B . H . Berkenkotter, to advance the necessary amountf o r t h e p u r c h a s e o f s a i d m a c h i n e r y a n d equipment The president of the Mabalacat Sugar Co., Inc.,applied to Cu Unjieng e Hi jos for an additio nall o a n o f P 7 5 , 0 0 0 o f f e r i n g a s s e c u r i t y t h e addit ional m achinery and equi p m ent acquiredb y said B.A. Green and install ed in the sugarc e n t r a l a f t e r t h e e x e c u t i o n o f t h e o r i g i n a l m o r t g a g e d e e d , o n A p r i l 2 7 , 1 9 2 7 , t o g e t h e r with whate ve r ad ditional equipm ent acquired with said loan. B.A. Green failed to obtain saidloan. Issues: W h e t h e r o r n o t , t h e l o w e r c o u r t e r r e d i n declaring that the additional machinery a nde q u i p m e n t a s i m p r o v e m e n t c a n b e permanently attached to a m o r t g a g e o f t h e sugar central. Held:

T h a t t h e i n s t a l l a t i o n o f a m a c h i n e r y a n d equipment in a mortgaged sugar central, in lieuof anothe r of less capacity, for the purpose of carrying out the industrial functions of the lattera n d i n c r e a s i n g p r o d u c t i o n , c o n s t i t u t e s a permanent improvement on said sugar centraland subjects said machinery and equipment tothe mortgage constituted thereon. Caltex vs CBAA114 SCRA 296Facts: This case is about the realt y ta x on m achinery and equipment installed by Caltex (Philippines)Inc. in its gas stations located on leased land. T h e m a c h i n e s a n d e q u i p m e n t c o n s i s t s o f u n d e r g r o u n d t a n k s , e l e v a t e d t a n k , e l e v a t e d w a t e r t a n k s , w a t e r t a n k s , g a s o l i n e p u m p s , com puting pum ps, water pum ps, car washer,c a r h o i s t s , t r u c k h o i s t s , a i r c o m p r e s s o r s a n d tireflators. The building or shed, the elevated water tank,t h e c a r h o i s t u n d e r a s e p a r a t e s h e d , the aircompressor, the underground gasoline tank,n e o n l i g h t s s i g n b o a r d , c o n c r e t e f e n c e a n d pavement and the lot where they are all placedor erected, all of them used in the pursuance of the gasoline service statio n business form edthe entire gasoline service-station. The lessor of the land, where the gas station isl o c a t e d , d o e s n o t b e c o m e t h e o w n e r o f t h e m a c h i n e s a n d e q u i p m e n t i n s t a l l e d t h e r e i n . C altex retains the ownership thereof during theterm of the lease. Issue: W h e t h e r o r n o t t h e p i e c e s o f g a s s t a t i o n equipment and machinery enumerated ar e subject to realty tax. Held: The Assessm ent Law provi d es that the realt yt a x i s d u e " o n r e a l p r o p e r t y , i n c l u d i n g l a n d , b u i l d i n g s , m a c h i n e r y , a n d o t h e r improvements".S C h o l d t h a t t h e s a i d e q u i p m e n t a n d machinery, as appurtenances to the gas stationbuilding or shed owned by Caltex (as to which itis subject to realt y ta x) and which fi xture s arenecessary to the operat ion of the gas station, f o r w i t h o u t t h e m t h e g a s s t a t i o n w o u l d b e u s e l e s s , a n d w h i c h h a v e b e e n a t t a c h e d o r affixed p erm anent ly to the gas station site orem bedd ed the rein, a re ta xable im provem ents a n d m a c h i n e r y w i t h i n t h e m e a n i n g o f t h e A s s e s s m e n t L a w a n d t h e R e a l P r o p e r t y T a x Code. Note: Improvements is a valuable addition made toprope rty o r an am elioration in its condition, amounting to more thanm e r e r e p a i r s o r r e p l a c e m e n t o f waste, costing labor or capital andi n t e n d e d t o e n h a n c e i t s v a l u e , beauty or util ity or to adapt it for new or further purposes. Machinery s h a l l e m b r a c e m a c h i n e s , m e c h a n i c a l c o n t r i v a n c e s , i n s t r u m e n t s , a p p l i a n c e s a n d apparatus attached to the realestate. It includes th e p h y s i c a l facilities availa ble for p rod uction, a s w e l l a s t h e i n s t a l l a t i o n s a n d a p p u r t e n a n t s e r v i c e f a c i l i t i e s , together with all other equipmentd e s i g n e d f o r o r e s s e n t i a l t o i t s m a n u f a c t u r i n g , i n d u s t r i a l o r agricultural pu rposes. Davao Saw Mill61 Phil 709 Facts: The Da vao Sa w Mill Co., Inc., is the holder of a lumber concession from the Government of thePhilippine Islands. It has operated a sa wm ill in the sitio of Maa, barrio of Tigatu, municipality of Davao, Provi nce of Davao. However, the landu p o n w h i c h t h e b u s i n e s s w a s c o n d u c t e d b e l o n g e d t o a n o t h e r p e r s o n . O n t h e l a n d t h e s a w m i l l c o m p a n y e r e c t e d a b u i l d i n g w h i c h housed the machinery used by it.In another action, wherein the Davao Li ght & Power Co., Inc., was the plaintiff and the Davao,S a w , M i l l C o . , I n c . , w a s t h e d e f e n d a n t , a judgment was rendered in favor of the plaintiff i n t h a t a c t i o n a g a i n s t t h e d e f e n d a n t i n t h a t action; a writ of execution issued thereon, andthe properties now in question were levied upona s p e r s o n a l t y b y t h e s h e r i f f . N o t h i r d p a r t y p a r t y claim was filed for such prope rties at the tim e o f t h e s a l e s t h e r e o f a s i s b o r n e o u t b y t h e record made by the plaintiff herein. Issue: W h e t h e r o r n o t t h e m a c h i n e r y m o u n t e d o n foundations of cement and installed by thel e s s e e o n a l e a s e l a n d b e r e g a r d e d a s r e a l property. Held: The m achinery wh ich is m ovabl e in its nature o n l y b e c o m e s i m m o b i l i z e d w h e n p l a c e d i n a plant by the owner of the property or plant butnot when so placed by a tenant, a usufructuary,or any person havi ng onl y a tem porary right, u n l e s s s u c h p e r s o n a c t e d a s a g e n t o f t h e owner.I m m o b i l i z a t i o n b y d e s t i

n a t i o n o r p u r p o s e cannot g ene rall y be m ade by a person whosep o s s e s s i o n o f p r o p e r t y i s o n l y T E P O R A R Y , otherwise we will be forced to presume that hei n t e n d e d t o g i v e t h e p r o p e r t y p e r m a n e n t l y away in favor of the owner of the premises.

PROPERTY BERON, CALINISAN, DELGADO, DEL SOCORRO, FERNANDEZLEGASPI, LOPEZ, MENDIOLA, RIVAS, SARENAS 2C 2005 because, as essential and principal elements of sugar central, without them sugar central wouldbe unable to function or carry the industrial purpose for which it is established. L e u n g Y e e v s . F . L . S t r i n g M a c h i n e r y C o . a n d W i l l i a m ( d e l S o c o r r o ) D a v a o S a w m i l l v s . C a s t i l l o ( i m m o v a b l e - L e g a s p i ) Facts Davao Sawmill operated a sawmill on a land belonging to another person. On the land, the sawmill company erected a building which housed the machinery used by it. The machines were placed and mounted on foundations of cement. The contract of lease between Davao Sawmill and the owner of the property provides that"on the expiration of the period agreed upon...all the improvements and buildingserected by the (lessee) shall pass to the exclusive ownership of the (lessor)...Provided... that the machineries and accessories are not included in theimprovements which will pass to the (lessor) There was another action wherein Davao Light&Power Co. was the plaintiff and Davao Sawillthe defendant. Davao Light & Power Co. won thus a writ of execution was issued and themachineries in the sawmill were levied upon.contentions Davao sawmill: real property consists of "constructions of all kinds adhering to the soil" (art.334 par. 1) Castillo and Davao Light&Power: real property consists of machinery ...intended by the owner of any building or land... for use in connection with any industry or trade bring carriedon therein". (art. 334 par. 5) The machinery in this case was intended by the lessee for use ina building on the land by the owner to be returned to the lessee on the expiration of the leaseTC: properties are personal in nature, after winning the bid, Davao Light&Power may takepossession of the machinery levied upon Issue w/n the machinery mounted on foundations of cement was personal property Ruling the machinery is personal property The characterization of the property as chattels by Davao sawmill is indicative of their intention to classify it as personal property. Davao Sawmill also has on a number of occassions treated the machinery as personalproperty and executed chattel mortgages thereon. The lessee placed the machinery in a building erected on a land belonging to another with theunderstanding that it was not included in the improvements which would pass from lessee tolessor. Machinery which is a movable in its nature becomes immobilized only when placed in a plantby the owner of the property but not so when placed by the tenant.

P r o v i n c e Zamboanga City

o f

Z a m b o a n g a

d e l

N o r t e

v s

22 SCRA 1334Facts: Prior to its incorporation as a chartered city, theM u n i c i p a l i t y o f Z a m b o a n g a u s e d t o b e t h e p r o v i n c i a l c a p i t a l o f t h e t h e n Z a m b o a n g a Province. On October 12, 1936, CommonwealthA c t 3 9 w a s a p p r o v e d c o n v e r t i n g t h e Municipality of Zamboanga into ZamboangaCity. Sec. 50 of the Act also provided that B u i l d i n g s a n d p r o p e r t i e s w h i c h t h e p r o v i n c e shall abandon upon the transfer of the capitalto another place will be acquired an d p aid for by the City of Zamboanga at a price to be fixedby the Auditor General. T h e p r o p e r t i e s a n d b u i l d i n g s r e f e r r e d t o c o n s i s t e d o f 5 0 l o t s a n d s o m e b u i l d i n g s c o n s t r u c t e d t h e r e o n , l o c a t e d i n t h e C i t y o f Zamboanga and covered individually by Torrenscertificates of title in the nam e of Zamboanga Province.

O n J u n e 6 , 1 9 5 2 , R e p u b l i c A c t 7 1 1 w a s approved di viding the provi nce of Zam boangai n t o t w o ( 2 ) : Z a m b o a n g a d e l N o r t e a n d Z a m b o a n g a d e l S u r . P r o p e r t i e s a n d t h e obligations of the province of Zamboanga shallbe divided equitably bet ween the Provi nce of Z a m b o a n g a d e l N o r t e a n d t h e P r o v i n c e o f Z a m b o a n g a d e l S u r b y t h e P r e s i d e n t o f t h e Philippine s, upon the recom m endation of theAuditor General.However, on June 17, 1961, Repu blic Act 3039 w a s a p p r o v e d a m e n d i n g S e c . 5 0 o f Comm onwealth Act 39 by provi din g that Allbuildi n gs, prope rties and assets belonging tothe former province of Zamboanga and locatedw i t h i n t h e C i t y o f Z a m b o a n g a a r e h e r e b y transferred, free of charge, in favor of the saidCity of Zamboanga. Issue: W O N Z a m b o a n g a d e l N o r t e i s d e p r i v e d o f i t s private properties without due process and justcompensation. Ruling: T h e f a c t t h a t t h e 2 6 l o t s a r e registered strengthens the proposition that they are trulyprivate in nature. O n the other hand, that the2 4 l o t s u s e d f o r g o v e r n m e n t a l p u r p o s e s a r e a l s o r e g i s t e r e d i s o f n o s i g n i f i c a n c e s i n c e registratio n cannot con vert public pro pert y toprivate.Applying Art. 424 of NCC, all the p roperties inquestion, e xcept the t wo (2) l ots used as HighS c h o o l p l a y g r o u n d s , c o u l d b e c o n s i d e r e d a s p a t r i m o n i a l p r o p e r t i e s o f t h e f o r m e r Zamboanga province. Even the capital site, thehospital and leprosarium sites, and the schoolsites will be considered patrimonial for they aren o t f o r p u b l i c u s e . T h e y w o u l d f a l l u n d e r t h e phrase "public works for public service"