1

2. With reference to the object: things that may be subject of property

rights
a. Corporeal
i. Immoveables NCC 415, 426

Art. 415, NCC. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds adhered to the
soil;
(2) Trees, plants, and growing fruits, while they are attached to the land
or form an integral part of an immovable;
(3) 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;
(4) Statues, reliefs, paintings or other objects for use or ornamentation,
placed in buildings or on lands by the owner of the immovable in such
a manner that it reveals the intention to attach them permanently to
the tenements;
(5) 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;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding
places of similar nature, in case their owner has placed them or
preserves them with the intention to have them permanently attached
to the land, and forming a permanent part of it; the animals in these
places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part
of the bed, and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended by their
nature and object to remain at a fixed place on a river, lake, or coast;
2

(10) Contracts for
public works, and servitudes and other real rights over immovable
property. (334a)

Classes of Immovables
1. Immovables by nature cannot be moved from place to place, such
as land mentioned in paragraph 1, and mines, quarries, and slag
dumps mentioned in paragraph 8
2. Immovables by incorporation essentially movables, but are
attached to an immovable in such manner as to be an integral part
thereof, such as things (except land, buildings, and roads) mentioned
in paragraphs 1, 2, 3, 4 and 6
3. Immovables by destination essentially movables, but by the
purpose for which they have been placed in an immovable, partake of
the nature of the latter because of the added utility derived therefrom,
such as those mentioned in paragraphs 4, 5, 6, 7 and 9
4. Immovables by analogy or by law such as those mentioned in
paragraph 10






Paragraph 1 Immovables by Nature
o Separate treatment by parties of a building from the land on which it
stands, does not change the immovable character of the building,
which by itself can be the subject of real estate mortgage

Buildings on Rented Land
3

o Buildings or constructions placed on land by a lessee do not become
immovable, where the lease agreement gives the lessee the right to
remove the buildings and improvements at the end of the lease
o Tolentino: buildings being immovable by nature, ownership of the
land on which they are erected cannot change their nature
o Mere fact that building was a subject of a chattel mortgage and was
considered as personal property does not make building personal
property

Where Materials Sold
o Where a building is sold to be demolished immediately, sale involved
movable property

Constructions
o Whatever materials used in the construction, it will be immovable,
provided that it is not of such provisional character, without fixed or
integral adherence to the soil, that it can be easily removed or
destroyed independently of the tenement on which it stands
o To be immovable must be attached permanently to the land (it
becomes immovable by incorporation)


Paragraph 2 Immovables by Incorporation
o Trees and plants are immovable only when attached to the land
o When they have been uprooted, they become movable

Ungathered fruits
o When land is being leased by another, fruits belong to the tenant
some consider fruits as movables
4

o SC: ungathered products have the nature of personal property for
purposes of attachment and execution, and for the Chattel Mortgage
Law

Paragraph 3 Immovables by Incorporation
o Rex vinta
o The material fact of incorporation or separation is what determines
the condition of these objects; so that as soon as they are separated
from the tenement, they recover their condition as movables,
irrespective of intention of owner

Paragraph 4 Immovables both by Incorporation and Destination
o They can generally be separated from the immovable without
breaking the object
o Objects must be placed in the immovable by the owner of the latter

Immobilization by owner
o Objects mentioned in pars. 4 and 5 become immobilized only when
placed in the tenement by the owner of such tenement
o When placed by a mere holder, such as a tenant, a usufructuary, or
one with temporary right over the immovable, these objects do not
become immovable property, unless such person acts as an agent of
the owner

Paragraph 5 Immovables by Destination
o Immovable condition depends upon their being destined for use in
the industry or work in the tenement
o The moment they are separated, not necessarily from the immovable,
but from the industry or work in which they are utilized, they recover
their condition as movables
o The immobilization can be made only by the owner of the tenement
5

o Where chattel mortgage has been constituted on machinery
permanently attached to the ground, machinery is to be considered
as personal property, and the chattel mortgage constituted thereon is
not null and void, regardless of who owns the land
o Work animals or beasts of burden are not included
o Excluded are those which are merely for decorative purposes, and
even those which are necessary for other purposes distinct from the
requirements of the industry

Paragraph 6 there seems to be an error; this probably was intended to
refer to animals themselves and not to the structures, which are already
included in par. 1

Paragraph 7 Immovables by Destination
o Fertilizers should be on the land where they are to be utilized

Effect of Enumeration
o While parties cannot by agreement treat as immovable that which is
legally movable, they may in certain cases treat as movable some
things enumerated by law as immovable
o For purposes of taxation, real property may include things which
should generally be regarded as personal property

Art. 426, NCC. Whenever by provision of the law, or an individual
declaration, the expression "immovable things or property," or "movable
things or property," is used, it shall be deemed to include, respectively,
the things enumerated in Chapter 1 and Chapter 2.

Whenever the word "muebles," or "furniture," is used alone, it shall not
be deemed to include money, credits, commercial securities, stocks and
6

bonds, jewelry, scientific or artistic collections, books, medals, arms,
clothing, horses or carriages and their accessories, grains, liquids and
merchandise, or other things which do not have as their principal object
the furnishing or ornamenting of a building, except where from the
context of the law, or the individual declaration, the contrary clearly
appears. (346a)








Berkenkotter v. Cu Unjieng (1935)
Facts:
1. Mabalacat Sugar Co., Inc. owner of sugar central situated in
Mabalacat Pampanga
2. The company obtained a loan from Cu Unjieng secured by a first
mortgage constituted on two 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
3. After mortgage was constituted, Mabalacat Sugar Co. decided to
increase the capacity of its sugar central by buying additional
machinery and equipment (150 tons to 250) estimated cost:
P100,000
4. To carry out this plan, B.A. Green (president of Mabalacat) proposed
to plaintiff, B.H. Berkenkotter, to advance the necessary amount for
7

the purchase of said machinery, promising to reimburse him as soon
as he could obtain an additional loan from Cu Unjieng
5. Berkenkotter advanced purchase money (P25,750 as loan; P22,000
credit against corp. for unpaid salary) and Mabalacat then purchased
additional machinery now in litigation
6. B.A. Green then applied to Cu Unjieng for an additional loan
(P75,000) offering as security the additional machinery recently
purchased
7. Cu Unjieng rejected application. They claim that the additional
machinery installed was already subject to the first mortgage
constituted
8. Mabalacat contends: installation of machinery was not permanent in
character because in the event that B.A. Green fails to obtain loan,
ownership of machinery will be transferred to Berkenkotter; hence, it
is not his, and cannot be subject to the first mortgage he constituted

Issue:
WON additional machinery and equipment, as improvement incorporated
with the sugar central, are subject to the mortgage deed executed in
favor of Cu Unjieng e Hijos

Held: YES
o Art. 1877. A mortgage includes all natural accessions, improvements,
growing fruits and rents not collected when obligation falls due, and
the amount of indemnities paid or due the owner by insurers of the
mortgaged property or by virtue of the exercise of the power of
eminent domain, with the declarations, amplifications, and limitations,
established by law, whether estate continues in possession of the
person who mortgaged it or whether it passes into the hands of a
third person.
o Bischoff v. Pomar
8

- In a mortgage of real estate, the improvements on the same are
included; therefore, all objects permanently attached to a
mortgaged building or land, although they may have been placed
there after the mortgage was constituted, are also included
- In order for such improvements be excluded, there must be an
express stipulation that the same are excluded
o Additional machinery and equipment is owned by Mabalacat Sugar
Co.
- Upon acquiring said machinery and equipment with money
obtained as loan from Berkenkotter, Mabalacat Sugar Co. became
owner of machinery and equipment
- B.A. Green could not have offered them to the plaintiff as security
for the payment of his credit if machinery was not his
o Art. 334 (5), CC: gives the character of real property to machinery,
xxx, intended by the owner of any building or land for use in
connection with any industry being carried on therein and which are
expressly adapted to meet the requirements of such industry
- Hence, installation of machinery in question converted them into
real property by reason of their purpose (increase production)
- As such, it cannot be said that their incorporation therewith was not
permanent in character because, as essential and principal
elements of a sugar central, without them the sugar central would
be unable to function or carry on the industrial purpose for which it
was established
o As to the alleged sale of said machinery to Berkenkotter, only the
right of redemption of Mabalacat Sugar Co. in the sugar central with
which said machinery had been incorporated, was transferred
thereby, subject to the right of Cu Unjieng under the first mortgage
- The offering of the machinery as security for loan obtained from
Berkenkotter, and the promise to refrain from mortgaging them
9

does not alter the permanent incorporation of said machinery
with the central






Philippine Refining Co. v. Jarque (1935)
Facts:
1. Philippine Refining Co. (PRC) and Francisco Jarque executed three
mortgages on the motor vessels Pandan and Zaragosa
2. Documents were recorded in the record of transfers and
encumbrances of vessels for the port of Cebu and each was
denominated Chattel Mortgage
3. Mortgages:
o FIRST and SECOND MORTGAGE did not have any affidavit
of good faith appended to it
o THIRD MORTGAGE contained such affidavit but was not
registered in the customs house
4. A FOURTH MORTGAGE was executed by Jarque and Ramon
Aboitiz on the motorship Zaragosa
5. Insolvency proceedings against Jarque was instituted
6. Petition was granted and Jarque was declared an insolvent debtor
resulting to the assignment of all his properties to Jose Corominas
7. THIRD MORTGAGE was registered in the customs house 30 days
prior to the commencement of insolvency proceedings
8. FOURTH MORTGAGE was entered in the chattel mortgage registry
also within the 30-day period prior insolvency proceedings
10

9. Judge Hontiveros declined to order the foreclosure of the aforesaid
mortgages and sustained special defenses of fatal defectiveness of
the mortgages

Issue: WON mortgages were validly constituted

Held: No.
o Vessels are considered as a peculiar kind of personal property
o Although they are subject to the provisions of the Chattel Mortgage
Law, the requirements for it to be a validly constituted chattel
mortgage is different from that of a chattel mortgage of other
personalty
o A chattel mortgage of a vessel does not need to be noted in the
register of the registry of deeds but is required that a record of
documents affecting the title to a vessel be entered in the record of
the Collector of Customs at the port of entry
o An affidavit of good faith appended to the mortgage is required
o Absence of these vitiates a mortgage as against creditors and
subsequent encumbrancers; unenforceable against third persons
o FIRST and SECOND mortgage no affidavit, hence not valid
o THIRD mortgage not registered in Collector of Customs, hence not
valid
o FOURTH mortgage registered in Chattel mortgage registry but this
was not required; no affidavit, not registered in Collector of Customs,
hence not valid






11



Mindanao Bus Co. v. City Assessor (1962)
Facts:
1. Mindanao Bus Companys (MBC) is a public utility solely engaged in
transporting passengers and cargoes by motor trucks
2. MBCs maintenance and repair equipment were assessed realty tax
at P4,400
3. Said maintenance and repair equipment are sitting on cement or
wooden platforms; MBC is also the owner of the land upon which its
garage for motor trucks, a repair shop, blacksmith and carpentry
shops.
4. With the machineries placed therein, the trucks are constructed and
repaired
5. Said machineries have never been used as industrial equipment to
produce finished products for sale, nor to repair machineries, parts,
and the like, offered to the general public for business for which MBC
has never engaged in
6. MBC appealed assessment to the Board of Tax Appeals: the same
are not realty
7. Board of Tax appeals sustained city assessors assessment
8. MBC filed with CTA a petition for the review of the assessment
9. CTA sustained
Pieces of equipment and machineries are immovable taxable
real properties
Said pieces of equipment and machineries, the movable, are
immobilized by destination, in accordance with par. 5, Art. 415
NCC
They are taxable realties, by reason of their being intended or
destined for use in an industry
12

10. MR denied
11. Hence, present petition

Issue: WON maintenance and repair equipment are real properties
subject to realty tax

Held: No.
o Art. 344 (Now 415) par. 5, gives the character of real property to
machinery, liquid containers, instruments or implements intended by
the owner of any building or land for use in connection with any
industry or trade being carried on therein and which are expressly
adapted to meet the requirements of such trade or industry
o Art. 415 (5) Machinery, xxx intended by the owner for an industry
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 works
o First Element: Essentiality
- Movable equipment must first be ESSENTIAL AND PRINCIPAL
ELEMENTS of an industry without which such industry or works
would be unable to function or carry on the industrial purpose for
which it was established.
- If movable equipment is merely incidental to the industry, then it
cannot be given the character of real property
E.g. cash registers, typewriters found in hotels restaurants,
theaters, etc. are merely incidentals and are not considered
immobilized by destination because the business can carry on
without these pieces of equipment
On the other hand, machineries of breweries used in the
manufacture of liquor and soft drinks, though movable in
nature, are immobilized because they are essential to said
industries; but delivery trucks and adding machines are merely
incidentals and retain their movable nature
13

- Maintenance and repair equipment are not essential and
principal elements of MBCs business of transporting passengers
and cargoes by motor trucks
- They are merely incidentals used only for expediency to
facilitate or improve its service
- Even without such equipment, business may be carried on, and
the repair of MBCs trucks may be done in a repair shop belonging
to another
o Second Element: Industry or works be carried on in a building or on a
piece of land
- MBCs transportation business is not carried on in a building or
permanently on a piece of land
o Equipment may not be considered real estate within the meaning of
Art. 415 (5), CC.








Davao Sawmill v. Castillo and Davao Light & Power Co. (1935)
Facts:
1. Davao Saw Mill Co. Inc. (DSM) holder of lumber concession
from the govt.
2. The land upon which the business was conducted belonged to
another person
3. Contract of Lease:
14

o Upon expiration of lease, improvements and buildings erected
by lessee shall pass to the exclusive ownership of lessor
without any obligation to pay any amount
o In the event the lessee should leave or abandon the land
leased before expiration, improvements and buildings shall
likewise pass to the ownership of lessor
o Provided, however, that machineries and accessories are not
included in the improvements which will pass to the lessor
4. DSM erected a building on said land, which housed the machinery
used by it.
5. On a number of occasions, Davao Saw Mill Co. Inc. treated said
machinery as personal property by executing chattel mortgages in
favor of third persons
6. One of such persons is Davao Light & Power Co. or Aproniano
Castiloo (by assignment from original mortgagees)
7. Davao Light filed an action against DSM, and judgment was
rendered against the former; a writ of execution was issued
resulting to the levy of the aforementioned machineries placed on
the sawmill
o [Auction sale conducted, and Davao Light was highest bidder
who acquired machinery and other properties of DSM]
o [No third party claim was filed for such properties at the time of
the auction sale]
8. DSM filed complaint with TC contesting the execution sale:
machineries cannot be levied upon as they were immobilized and
thus belonged to his lessor, by virtue of the terms and conditions
of their lease contract
9. TC: found that properties were personal in nature
10. DSM now appeals.

15

Issue: WON machineries in question are immobilized and ceased to
become personal property of DSM despite it being installed on a plant
not owned by DSM

Held: No. Machineries were not immobilized by reason of destination
because the land on which the machineries were installed did not belong
to DSM.
o Similar question arose in Puerto Rico (Valdes v. Altagracia):
machinery which is movable in its nature only becomes immobilized
when placed in a plant by the owner of the property or plant, but not
when so placed by a tenant, usufructuary, or any person having only
temporary right. Unless such person acted as agent of owner
o Following Code Napoleon: Porto Rican Code treats as immovable
property, not only land and buildings, but also attributes immovability
to property movable in nature, because of the destination to which it
is applied
o But said property only becomes immobilized when placed in a plant
by the owner of the property or plant.
o This is because of the fact that a person, having only a temporary
right to the possession or enjoyment of property is not presumed by
the law to have installed movable property belonging to him on
property not belonging to him for the purpose of immobilizing such
and depriving of himself of ownership thereof
o Machineries levied upon did not lose its character of movable
property and become immovable by destination
o Machineries can only be immobilized if DSM acted as an agent of the
lessor and the objects become immovable from the act of the owner
in giving by contract a permanent destination to them (Valdez v.
Central Altagracia:)
16

o This does not obtain in present case since in the lease contract,
machineries were expressly excluded from the improvements that will
be transferred to lessor upon expiration of lease
o [Also, Art. 334, pars. 1 & 5 provides that real property consist of:
(1) Land, buildings, roads and constructions of all kinds adhering to
the soil
(5) Machinery, liquid containers, instruments or implements intended
by the owner of any building or land for use in connection
with any industry or trade being carried on therein and which are
expressly adapted to meet the requirements of such trade or
industry
o Moreover, characterization of the property as chattels by the
appellant is indicative of intention and impresses upon the property
the character determined by the parties



Prudential Bank v. Panis (1987)
Facts:
1. Fernando Magcale and Teodula Magcale secured a loan (P70,000)
from Prudential Bank
o To secure payment, they executed a deed of Real Estate
Mortgage over a residential building and a warehouse owned by
Magcale which was constructed on a land owned by the
government
o The property mortgaged includes the right of occupancy
(possessory rights) on the lot where the property is erected
2. Prudential Bank knew that said land was not owned by the Magcales
and that there was a pending application for a Miscellaneous Sales
Patent over the lot because a rider was typed in the deed signifying
that in the event the Sales Patent on the lot applied for by the
17

mortgagors is issued, mortgagors authorize the Register of Deeds to
hold the registration of the same until the mortgage is cancelled.
3. Mortgagors secured an additional loan from Prudential Bank
(P20,000)
o To secure payment, another deed of Real Estate Mortgage was
executed, over the same properties previously mortgaged
4. Sec. of Agriculture issued Miscellaneous Sales Patent over the parcel
of land, possessory rights over which were mortgaged o Prudential
Bank
5. Property was subsequently registered and a title was issued in the
name of Fernando Magcale (in violation of the rider stipulations)
6. Mortgagors failed to pay their obligation and the deeds of Real Estate
Mortgage were extrajudicially foreclosed
7. Property was auctioned, and acquired by Prudential Bank as highest
bidder
8. Spouses Magcale filed complaint assailing the sale before CFI of
Zambales
9. CFI: declared the deeds of Real Estate Mortgage null and void; held
that a mortgage cannot be constituted on the building erected on land
belonging to another; hence, foreclosure sale was likewise invalid
10. Prudential Bank filed MR denied
11. Hence, instant petition.

Issue: WON a valid real estate mortgage can be constituted on the
building erected on the land belonging to another

Held: Yes
o The inclusion of the word building separate and distinct from land
under Art. 415 CC, can only mean that a building is by itself an
immovable property
18

o While it is true that a mortgage of land necessarily includes, in the
absence of contrary stipulation, improvements thereon; a building
may still be mortgaged apart from the land on which it has been built
o Such mortgage would still be a real estate mortgage for the building
would still be considered immovable property even if dealt with
separately
o Vda. De Bautista v. Marcos: Court has established that possessory
rights over lands before title is vested on the grantee, may be validly
transferred or conveyed as in a deed of mortgage
o First mortgage was executed (Nov. 19, 1971) before the issuance of
final patent (May 15, 1972) and before government was divested of
its title to the land
o First Mortgage is a valid mortgage
o Proscriptions under Secs. 121, 122, 124 of CA 141, Public Land Act
have no application to the assailed mortgage which was executed
prior to the enactment of CA 141
- Sec. 121: No corporation, xxx may acquire or have any right
whatsoever to any land granted under the free patent, homestead,
or individual sale
- Sec. 122: No land, xxx nor any permanent improvement on such
land, shall be encumbered, alienated or transferred, except to
persons, corporations qualified to acquire lands of public domain
- Sec. 124: any prohibited encumbrance or alienation is null and
void and shall annul the grant and cause the reversion of property
and its improvements to the State
o RA 730, Sec. 2 has no application as well as proscription expressly
refers to encumbrance or alienation on the LAND ITSELF and does
not mention anything regarding improvements existing thereon
- Sec. 2: proscribes the encumbrance and alienation of lands
acquired under provisions of said Act, before the patent is issued
and for a term of ten years from the date of issuance
19

o Second Mortgage executed after issuance of sales patent and
original certificate of title falls squarely under prohibitions stated in
Sec. 121, 122, 124 CA 141; and Sec. 2 of RA 730, and is therefore
NULL AND VOID
o Second Mortgage cannot be made valid by estoppel
- Prudential Bank was contending that Spouses Magcale
voluntarily surrendered title to the bank in 1977 in order that the
mortgage be annotated without requiring the bank to get prior
approval from Ministry of Natural Resources
- Validity cannot be given by estoppel if it is prohibited by law or is
against public policy
o First mortgage valid, Second mortgage null and void; without
prejudice to whatever steps the Government may take for the
reversion of the land in its favor.

Caltex v. Central Board of Assessment Appeals (1982)
Facts:
1. Caltex loans machines and equipment to gas station operators under
a lease agreement
2. Machines and equipment consist of underground tanks, elevated
tank, elevated water tanks, water tanks, gasoline pumps, computing
pumps, water pumps, car washer, car hoists, truck hoists, air
compressors, and tireflators
3. Under the lease contract, operators, upon demand, shall return to
Caltex the machines and equipment, in good condition as when
received, ordinary wear and tear excepted; lessor of the land where
gas station is located, does not become the owner of the machines
and equipment installed therein; Caltex retains ownership
4. The City Assessor of Pasay City characterized the said machines
and equipment and assessed the same as taxable realty
5. Realty tax on said equipment amounts to P4,541.10 annually
20

6. City Board of Tax Appeals ruled that they are personalty
7. City Assessor appealed to the Central Board of Assessment Appeals
8. Said Board declared said machines and equipment as real property
within the meaning of sections 3(k) & (m) and 38 of PD 464, the Real
Property Tax Code; and that the definitions of real property and
personal property in articles 415 and 416 CC are not applicable to
this case
9. Caltex MR denied
10. Caltex filed a special civil action of certiorari praying for Boards
decision be set aside, and for machinery be declared as personal
property not subject to realty tax

Issue:
WON the pieces of gas station equipment and machinery are subject to
realty tax

Held: Yes
o Assessment Law
- Sec. 2 realty tax is due on real property, including land,
buildings, machinery, and other improvements not specifically
exempted in Sec. 3
o Sec. 2, reproduced and modified in Real Property Tax Code
- Sec. 38 Incidence of Real Property Tax. There shall be levied,
assessed and collected in all provinces, cities and municipalities
an annual ad valorem tax on real property, such as land,
buildings, machinery and other improvements affixed or attached
to real property
- Sec. 3 defines improvements and machinery
k) improvements is a valuable addition made to property or
an amelioration in its condition, amounting to more than mere
repairs or replacement of waste, costing labor or capital and
21

intended to enhance its value, beauty or utility or to adapt it for
new or further purposes
m) Machinery shall embrace machines, mechanical
contrivances, instruments, appliances and apparatus attached
to the real estate. It includes the physical facilities available for
production, as well as the installations and appurtenant service
facilities, together with all other equipment designed for or
essential to its manufacturing, industrial or agricultural
purposes
o The said machinery and equipment, as appurtenances to the gas
station building or shed owned by Caltex (as to which it is subject to
realty tax) and which fixtures are necessary to the operation of the
gas station, for without them the gas station would be useless, and
which have been attached permanently to the gas station site or
embedded therein, are taxable improvements and machinery within
the meaning of the Assessment Law and the Real Property Tax Code
o Caltex: invokes Davao Saw Mill Co. v. Castillo ruling machinery
which is movable in its nature only becomes immobilized when
placed in a plant by the owner of the property or plant, but not when
so placed by a tenant
o SC: ruling is an interpretation of par. 5, Art. 415 regarding movable
machinery that becomes real property by designation. In said case,
machinery were treated as personalty because it was installed by one
not an owner of the land
- Not applicable as the case involves equipment and machinery
permanently affixed by Caltex to its own gas stations and
pavement
- These are indubitable taxable realty
o The building or shed, the elevated water tank, the car hoist under a
separate shed, the air compressor, the underground gasoline tank,
neon lights signboard, concrete fence and pavement and the lot
22

where they are placed or erectedall of which are used in pursuance
of the gasoline service station business and formed the entire
gasoline service station
o The subject properties were attached to the tenement, that is, the
pavement covering the entire lot which was constructed by Caltex,
the owner of the gasoline station and the improvement which holds
all the properties in question
o Moreover, improvements on land are commonly taxed as realty even
though for some purposes they might be considered personalty
- It is a familiar phenomenon to see things classed as real property
for purposes of taxation which on general principle might be
considered personalty

Benguet Corp. v. CBAA (1993)
Facts:
1. 1985 - Provincial Assessor of Zambales assessed Benguet Corp.s
tailings dam and the land thereunder as taxable improvements
(P11M)
2. Benguet Corp. appealed to the Board of Assessment Appeals
dismissed for failure of Benguet Corp. to pay realty taxes that fell due
during pendency of appeal
3. Benguet Corp. elevated matter to Central Board of Assessment
Appeals Declared the tailings dam and the lands submerged
thereunder were subject to realty tax
o For purposes of taxation, the dam is considered as real property
as it comes within the object mentioned in pars. (a) & (b) of Art.
415 NCC
o It is a construction adhered to the soil which cannot be separated
without breaking the material or causing destruction on the land
upon which it is attached
23

o The immovable nature of the dam as an improvement determines
its character as real property, hence taxable under Sec. 38 of
Real Property Tax Code
4. Benguet Corp. filed petition for certiorari seeking for a reversal of the
above ruling
5. Benguet Corp.s contention:
o Tailings dam is not subject to realty tax as it is not an
improvement upon the land within the meaning of the Real
Property Tax Code
o Tailings dam has no value separate and independent of the mine
hence by itself cannot be considered an improvement separately
assessable
o It is an integral part of the mine
o At the end of the mining operation, tailings dam will benefit the
local community by serving as an irrigation facility
o As regards the valuation of the tailings dam, it should be based on
its incidental use as a water reservoir and not on the alleged cost
of construction of the dam and the annual build-up expense
o As regards Benguet Corp.s liability for penalties for non-
declaration of the tailings dam and the submerged lands for realty
tax purposes: no penalty shall be collected because the tax was
not paid in honest belief that it is not due
o Also, no other mining companies in the Phils. operating a tailings
dam have been made to declare the dam for realty tax purposes
o Benguet Corp. does not dispute that tailings dam may be
considered realty within the meaning of Art. 415. It only insists
that it cannot be separately assessed because it is an integral part
of the mine
o Cited jurisprudence
24

1. Municipality of Cotabato v. Santos: dikes and gates
constructed in connection with a fishpond operation not taxed
separately for being integral parts of the fishpond
2. Bislig Bay Lumber Co. v. Provincial Government of Surigao: A
road constructed by the timber concessionaire was not
separately taxed [not because the road was integral part of
the lumber concession, but because the government had the
right to use the road to promote its varied activities]
3. Kendrick v. Twin Lakes Reservoir Co.: reservoir dam formed
part of the reservoir hence not separately taxable
4. Ontario Silver Mining Co. v. Hixon: drain tunnels constructed
by mining company not taxed separately as it is an integral
part of the mine itself
6. SolGen: tailings dam is an assessable improvement because it
enhances the value and utility of the mine
o Primary function of the dam is to receive, retain and hold the
water coming from the operations of the mine, and it also enables
Benguet Corp. to impound water, which is then recycled for use in
the plant
o Cited Jurisprudence
1. Caltex v. CBAA: equipment and machinery are taxable
improvements as they were necessary to the operation of the
gas station
2. Manila Electric Co. v. CBAA: while two storage tanks are not
embedded in the land, they may be considered as
improvements on the land, enhancing its utility and rendering
it useful to the oil industry
3. Meralco Securities Industrial Corp. v. CBAA: pipeline system,
construction adhering to the soil, was considered a taxable
improvement
25

4. Flax-Pond Water Co. v. City of Lynn: dam was separately
taxed
5. Standard Oil Co. v. Atlantic City: oil tanks designed and used
as permanent improvement are properly assessed as
improvements
Issue:
WON tailings dam are taxable improvements

Held: Yes
o Real Property Tax Code does not provide definition or real property
- Simply states that realty tax is imposed on the real property, such
as lands, buildings, machinery and other improvements affixed or
attached to real property
- In the absence of such a definition, Art. 415 CC should be applied
o Art. 415. The following are immovable property
- (1) Lands, buildings and constructions of all kinds adhered to the
soil
- (3) Everything attached to an immovable in a fixed manner, in
such a way that it could not be separated therefrom without
breaking the material or deterioration of the object
o Sec. 2 of CA 470, Assessment Law realty tax is due on the real
property, including land, buildings, machinery and other
improvements not specifically exempted in Sec. 3
- Tailings dam not one of the exceptions
o Tailings dam is an improvement within the meaning of Sec. 3(k) of
the Real Property Tax Code
o (k) is a valuable addition made to property or 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 adapt it for new or further purposes
26

o Improvement has also been interpreted as artificial alterations of
the physical condition of the ground that are reasonably
permanent in character
o Tailing dam cannot be taxed separately if the mine could not be
operated without it and making said dam an integral part of the mine
o In this case, tailings dam was a mere improvement and has
value separate in distinct from the mine hence by itself is
considered an improvement separately taxable
- Benguet Corp.s mining operation, even without the tailings dam,
can still be carried out because the primary function of the dam is
merely to receive and retain wastes and water coming from the
mine
- No allegation that water coming from dam is the sole source of
water for the mining operation so as to make it an integral part of
the mine
- Even if mine is shut down, the dam may still be used for irrigation
of the surrounding areas, as admitted by the corp.
- Kendrick ruling not applicable because in the present case, the
tailings dam was being used exclusively for the benefit of Benguet
Corp.
- While Benguet Corp. vidorously argues that tailings dam has no
separate existence, it inconsistently contends that at the end of
the mining operation, tailings dam will serve as irrigation facility of
local community admission that tailings dam indeed can exist
independently of the mine and not an integral part thereof
o 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
- Permanent does not imply that improvement must be used
perpetually but only until purpose to which principal realty is
devoted has been accomplished
27

- It is sufficient that improvement is intended to remain as long as
the lands to which it is annexed is still used for the said purpose
o Tailings dam falls within the definition of an improvement because it
is permanent in character and enhances both the value and utility of
Benguet Corp.s mine
o The immovable nature of the dam defines its character as real
property under Art. 415 CC and thus makes it taxable under Sec. 38
Real Property Tax Code






Tumalad v. Vicencio (1971)
Facts:
1. Alberta Vicencio and Emiliano Simeon secured a loan from Tumalad
(P4,800) and a Chattel Mortgage was executed to secure its payment
2. Property mortgage is a house of strong materials located in Quezon
Blvd, Quiapo Manila which was being rented from Madrigal &
Company Inc.
3. Parties agreed that Chattel Mortgage will be enforceable in
accordance with provisions of Special Act No. 3135 sheriff is
empowered to sell mortgagors property
4. Mortgagors defaulted in paying; mortgage extrajudicially foreclosed
5. House was sold at public auction to highest bidder, mortgagees
6. Mortgagees commenced civil case for ejectment in MTC of Manila,
praying that the house be vacated and its possession surrendered to
them; mortgagors to pay rent of P200 monthly from date of sale (Mar.
27, 1956) up to time possession is surrendered
28

7. Municipal Court ruled in favor of mortgagees and ordered
mortgagors to vacate premises and to pay monthly rent of P200 (from
March 27, 1956 until such time that the premises has been
completely vacated)
8. Mortgagors appealed to CFI
9. Contentions:
o Municipal Court did not have jurisdiction because the issue
involved is ownership (hence, CFI) and there was no allegation of
prior possession
o There was failure to prove prior demand to vacate before filing of
ejectment suit pursuant to Sec. 2 Rule 72 ROC
10. Mortgagees filed motion for execution
11. During pendency of the appeal, mortgagors failed to deposit the rent
as ordered in the decision of MTC. As a result, CFI granted motion
for execution
12. However, judgment regarding surrender of possession could not be
executed because house was demolished pursuant to order in an
ejectment case filed by lessor of land against herein mortgagors
13. Mortgagors appealed to CA affirmed decision of CFI
14. Hence, present petition
15. Mortgagors contentions:
o They question the jurisdiction of MTC and consequently, the
appellate jurisdiction of CFI on the theory that the CHATTEL
MORTGAGE is void ab initio hence the extrajudicial foreclosure
and auction sale were also void
- Signatures on chattel mortgage were obtained through fraud,
deceit, or trickery
- Subject matter of the mortgage is a house and being an
immovable, it can only be subject of real estate mortgage

29

o Foreclosure sale being void, ownership of the house still remained
with them who are entitled to possession
o The issue of ownership will have to be adjudicated first in order to
determine possession
o Hence, it is the CFI which has jurisdiction over the matter
o They cannot be made to pay for rentals within 1 year period
provided by law for redemption of extrajudicially foreclosed
property


Issues:
1. WON MTC had jurisdiction over the case (YES)
2. WON the chattel mortgage was void as signatures were obtained
through fraud, deceit, or trickery (NO)
3. WON chattel mortgage was void ab initio because only personal
properties can be subject of a chattel mortgage (NO)
4. WON mortgagors are legally bound to pay rentals to the
mortgagees during period of 1 year provided by law for the
redemption of extrajudicially foreclosed house (NO)

Held:
1. Yes, MTC has jurisdiction.
o When question to be determined is one of title, the court is given
authority to proceed with the hearing of the cause until this fact is
clearly established
o In detainer cases, the claim of ownership is a matter of defense
and raises an issue of fact that should be determined from
evidence at the trial
o What determines jurisdiction are the allegations in the complaint
and the relief asked for
1. No, the chattel mortgage remains valid.
30

o Contentions were not supported by evidence
o Even granting that the charge is true, fraud or deceit does not
render a contract void ab initio, and can only be a ground for
rendering a contract voidable, hence valid until annulled
o Records does not show that the mortgage was annulled
2. No. Parties to a contract may, by agreement, treat real property
as personal property
o Parties to chattel mortgage may agree to consider a house as
personal property for the purposes of said contract, but the same
is only good insofar as the contracting parties are concerned
o Jurisprudence:
- Manarang v. Odilada parties to a contract may, by
agreement, treat as real property as personal property
- Standard Oil v. Jaramillo mortgagor conveyed to the
mortgagee personal property consisting of leasehold rights
and a building
- Luna v. Encarnacion subject of contract designated as
Chattel Mortgage was a house and the court held that it was
valid because it was so expressly designated and specifically
that the property given as security is a house
- Navarro v. Pineda the view that parties to a deed of chattel
mortgage may agree to treat real property as personal
property is good only insofar as contracting parties are
concerned
Based on principle of estoppel
- Evangelista v. Abad mortgaged house built on rented land
was held to be personal property, not only because deed of
mortgage considered it as such, but also because it did not
form part of the land; an object placed on a rented land does
not become immobilized by attachment
o Mortgagors are estopped
31

o Although there is no specific statement referring to the subject
house as personal property, yet by ceding, selling or transferring
a property by way of chattel mortgage defendants-appellants
could only have meant to convey the house as chattel, or at
least, intended to treat the same as such, so that they should not
now be allowed to make an inconsistent stand by claiming
otherwise."
o Moreover, subject house stood on a rented lot to which herein
mortgagors merely had a temporary right as lessees (although
not conclusively, it can be said that the mortgagors intended to
treat the house as personalty)
4. No. They are not liable to pay rent within 1 year redemption
period
o Sec. 6 of Special Act 3135 1 year redemption period
o Sec. 7 allows purchase to obtain possession during
redemption, but a petition and the furnishing of a bond are
prerequisites
o Purchaser cannot claim possession during period of redemption
as a matter of right
o Thus, possession remains with mortgagors
o While ROC allows purchaser to receive rentals if occupied by
tenants, former is still accountable to the judgment-debtor for the
amount received and the same is credited against redemption
price
o Rentals receivable from tenants, although they may be collected
by purchaser during redemption period, do not belong to the
latter but still pertain to the mortgagor
o Since mortgagors were occupying the house at the time of
auction sale, they are entitled to remain in possession during
period of redemption and to collect the rents or profits during said
period
32




Sergs Products v. PCI Leasing (2000)
Facts:
1. PCI Leasing and Finance, Inc. (PCI) filed with RTC complaint for a
sum of money with an application for a writ of replevin
2. A writ of replevin was issued directing sheriff to seize and deliver the
machineries and equipment to PCI after 5 days
3. Sheriff proceeded to Sergs Productss factory and seized one
machinery
4. Sergs filed motion for special protective order to enjoin sheriff from
enforcing the writ
5. Sergs:
o Properties were immovable as defined by Art. 415 CC, the parties
agreement to the contrary notwithstanding; hence, it cannot be a
proper subject of a writ of replevin
o It would be prejudicial to innocent third parties if their contract,
stipulating that machinery is personalty, would be given effect
o PCI was estopped from treating machineries personal as the
contract between them was totally sham
6. Sheriff sought to enforce writ and was able to take two more
7. Sergs elevated matter to CA
8. CA machineries were personal property and that they and only
been leased, not owned; words of contract are clear and leave no
doubt upon the true intention of the contracting parties
9. Hence, this petition




33

Issues:
1. WON machineries are personal property which can be proper
subjects of Writ of Replevin
2. WON contract between parties is a loan or a lease

Held:
1. Yes
o Rule 60 Sec. 5 ROC: writs of replevin are issued for the recovery
or personal property alleged to be wrongfully detained
o On the other hand, Art. 415 CC provides that the following are
immovable property
- (5) 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
o Machineries were placed by Sergs in the factory built on their
own land
- They were essential elements of their chocolate-making industry
- Hence, although each of them was movable on its own, all of
them have become immobilized by destination because they
are essential and principal elements in the industry
- They are real property, pursuant to Art. 415
o However, they can still be proper subjects of the Writ of Seizure
o Court has held that contracting parties may validly stipulate that a
real property be considered personal
o After agreeing to such stipulation, parties estopped from claiming
otherwise
o Lease agreement clearly provides that the machines are to be
considered personal property notwithstanding its permanent
attachment to real property or any building thereon
34

o The holding that it is personal property, is good only as to the
contracting parties third persons acting in good faith not bound
2. Contract is Lease
o Sergs contend that agreement is a loan and not a lease, and
hence belonged to them. As such, they cannot be said to be
unlawfully detaining said machineries
- Agreement suffers from intrinsic ambiguity which places serious
doubt in the intention of parties and validity of lease agreement
itself
o This issue should be resolved in the civil action pending before
the RTC and not in the proceedings involving issuance of Writ of
Seizure
o Court may rely on Lease Agreement nothing on record shows
that it had been nullified or annulled; presumed valid and binding
o Should have instead filed a counter-bond for the return of
machinery (double the value of machinery Sec. 5 Rule 60 ROC








ii. Movables NCC 416-418, 426

Art. 416, NCC. The following things are deemed to be personal property:
(1) Those movables susceptible of appropriation which are not included
in the preceding article;
(2) Real property which by any special provision of law is considered as
personalty;
35

(3) Forces of nature which are brought under control by science; and
(4) In general, all things which can be transported from place to place
without impairment of the real property to which they are fixed. (335a)

General Test of Movable Character:
1. Whether it can be carried from place to place
2. Whether the change of location can be effected without injury to an
immovable to which the object may be attached
3. Whether the object is not included in any of the ten paragraphs of Art.
415

By Special Provision:
o Act No. 1508, Chattel Mortgage Law
- Recognizes growing crops as personalty
- if growing crops are mortgaged, mortgage may contain an
agreement stipulating that the mortgagor binds himself to
properly tend, care for and protect the crop while growing
o Ungathered products as personalty
- There is a mobilization in anticipation, a gathering as it were in
advance, rendering the crop movable
Forces of Nature
- Electricity, gas, heat, oxygen, light, rays, etc.
- On electricity as subject of larceny: Test is not whether the
subject is corporeal or incorporeal, but whether it is capable of
appropriation by another than the owner
Semi-movables
- Now classified as movables
- All those which are susceptible of moving by themselves without
assistance from any outside force, such as animals

36

Intellectual Property
- Right of the author, artist, or inventor over his work is personal
property
- It consists in the pecuniary benefit which the owner can get by
the reproduction or manufacture of his work
- It is a monopoly of exploitation

Art. 417, NCC. The following are also considered as personal property:
(1) Obligations and actions which have for their object movables or
demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial entities,
although they may have real estate. (336a)

Obligations
- All kinds of credits
- Includes bonds

Intangible Objects
- Credits which have for their prestation an act or an abstention
- Enumeration of real property is exclusive; all not included are
personal

Demandable Sums
- Demandable is erroneously used
- Whether credit is matured or not, it is personal property

Shares in Juridical Persons
- All juridical persons must be deemed included

37

Art. 418, NCC. Movable property is either consumable or
nonconsumable. To the first class belong those movables which cannot
be used in a manner appropriate to their nature without their being
consumed; to the second class belong all the others. (337)

Consumables and Non-consumables
o Consumables those whose use according to their nature destroys
the substance of the thing or causes their loss to the owner

Fungibles and Non-fungibles (Generic or Specific)
o Fungible possibility, by nature or by will of parties, of being
substituted by others of the same kind
o Things whose individuality can be determined by counting,
weighing or measuring
o Non-fungibles those which have their own individuality and do not
admit to substitution

Distinction between Consumable and Fungible Things
o Classification into fungibles and non-fungibles is a classification
according to purpose, depending on whether they can be substituted
by other things of the same kind, quality, and quantity; it is intention
of parties to a contract that determines whether the object is fungible
or non-fungible
o Classification into consumable or non-consumable is according to the
nature of the thing

US v. Tambunting (1921)
Facts:
1. CFI rendered judgment finding Tambunting guilty of stealing a
quantity of gas belonging to Manila Gas Corporation
38

2. They tampered with gas equipment installed for the use of another
tenant in their building
3. Tambunting appealed his conviction

Issue:
1. WON gas can be the subject of larceny
2. WON quantity of has been established with sufficient certainty to
enable the court to fix appropriate penalty




Held:
1. Yes
o [page 34, Vol. 17, of Ruling Case Law] There is nothing in the
nature of gas used for illuminating purposes which renders it
incapable of being feloniously taken and carried away. It is a
valuable article of merchandise, bought and sold like other
personal property, susceptible of being severed from a mass or a
larger quantity and of being transported from place to place.
o Likewise, water which is confined in pipes and electricity which is
conveyed by wires are subjects of larceny
2. Proof not satisfactory, but TC was justified in fixing value of gas at P2
per month, which is the minimum charged by gas company, however
small amount consumed
3. Unsuccessful prosecution of accused for an infraction of Sec. 504 of
Revised Ordinances of the City of Manila charging the accused for
placing a gas installation without being a registered installer of gas
Not a bar to subsequent prosecution; two offenses are distinct


39









b. Non-corporeal
i. Intellectual property NCC 721-724; RA 8293 (Intellectual
Property Code) Secs. 4.1, 22, 112, 172-173, 177

Article 721. By intellectual creation, the following persons acquire
ownership:

(1) The author with regard to his literary, dramatic, historical, legal,
philosophical, scientific or other work;
(2) The composer; as to his musical composition;
(3) The painter, sculptor, or other artist, with respect to the product of his
art;
(4) The scientist or technologist or any other person with regard to his
discovery or invention. (n)

Art. 722, NCC. The author and the composer, mentioned in Nos. 1 and 2
of the preceding article, shall have the ownership of their creations even
before the publication of the same. Once their works are published, their
rights are governed by the Copyright laws.

The painter, sculptor or other artist shall have dominion over the product
of his art even before it is copyrighted.
40


The scientist or technologist has the ownership of his discovery or
invention even before it is patented. (n)



Extent of Ownership
- Right of creator of intellectual property before publication vs. his
right after it is made public
o Before work is made public, he has a right to keep it to himself
o Once it is made public, he loses this exclusive right, unless the
work is copyrighted or patented
Before publication
o While literary, dramatic, musical compositions, or designs for
work of ornament or utility remains unpublished, it is the
exclusive property of creator
o Creator can admit one or more persons to its use, to the
exclusion of all others does not alter exclusivity, provided
that the use to which he allows it to be put does not amount to
publication
After publication
o Author of literary work or composition has a right to first
publication
o Once published, it is dedicated to the public, and the author
loses the exclusive right to control subsequent publication by
others unless the work is placed under the protection of the
Copyright Law
Radio Broadcasts
41

o International convention of Rome of 1928 recognizes in the
authors of literary and artistic works the exclusive right to
authorize broadcast of their works


Interpretation by Artists
o Argentine court artists has the right of an author with respect
to his interpretation, and the broadcast is an edition for which
he should be paid
Production by Employee
o Employer will acquire title to works of employee if it is so
stipulated in the employment contract; otherwise, it remains
property of the author

Ownership of Pictures
o Photograph taken at the instance of A: there is an implied
agreement that photographer or stranger can publish or make
copies of the portrait without the permission of A
o Photograph taken at the instance of photographer and for his
benefit: A loses control over disposition of pictures
Ownership of Plans and Designs
o Exclusive right to license construction from them, until
published
o But if plans and specs prepared under a contract for an agreed
compensation, together with right to use them, they belong to
client

Art. 723, NCC. Letters and other private communications in writing are
owned by the person to whom they are addressed and delivered, but
they cannot be published or disseminated without the consent of the
42

writer or his heirs. However, the court may authorize their publication or
dissemination if the public good or the interest of justice so requires. (n)

Ownership of Letters
o Dual interest
- Intellectual property consisting of thoughts and ideas
- Material and physical thing paper and impression made thereon
o Sender has right to cause or prevent publication, but control over the
letter is with addressee
o If public good or interest of justice so requires, court may authorize
publication of private letters without consent of writer
- Necessary for vindication of character of person to whom letter is
addressed
- Letter is produced as evidence in court unless it constitutes a
privileged communication
o Attempts to publish may be prevented by injunction
o If unauthorized publication has already been made, author may sue
for damages


Art. 724, NCC. Special laws govern copyright and patent. (429a)

PATENTS
Patentable Inventions
- Any invention of a new and useful machine, manufactured product or
substance, process or an improvement of any of the foregoing, shall
be patentable
Inventions not Patentable
- Inventions contrary to public order or morals, or to public health or
welfare
43

- Constitutes a mere idea, scientific principle or abstract theorem not
embodied in an invention

Period of Effectivity of Patent
- 17 years
- Patent cancelled upon failure to pay required annual fees within time
prescribed by law

Infringement of Patent
- Making, using, selling of the patented process or instrumentality by
any person without authorization on the part of the patentee
- There must be substantial identity
- Interchangeability and non-interchangeability of the devices of two
patents is an important test in determining the question of
infringement
- Patentee cannot treat another as an infringer who has improved the
original machine by use of different form or combination performing
the same functions
- If party merely substitutes an ingredient, which is well known to be a
substitute for the omitted ingredient, he is an infringer
- No infringement of a patent for a combination if a single element of
patentees combination is left out of the new device

Where No Infringement
- The making or using of a patented invention when not conducted for
profit and solely for the purpose of research or experiment, or for
instruction, shall not constitute infringement

Who are Liable
- Patentee may sue anyone who in his opinion is guilty of an
infringement
44

- Government is not liable to a suit for infringement of a patent,
because the action is one of tort
- It may sue government if there is a contract between them for use of
invention

Defenses
Invalidity of Patent
1. Invention is not new or patentable
2. The specification does not comply with the requirements of the patent
law
3. The person to whom the patent was issued was not the true and
actual inventor or did not derive his rights from the true and actual
inventor

Patent has Lapsed
- Term of patent begins on the date when patent was issued and shall
expire 17 years thereafter except when patentee fails to pay annual
fees or patent is cancelled

Lack of Notice of Patent Right
- Damages cannot be recovered if infringement is committed before
infringer had actual notice

Abandonment
- Patentee has abandoned his rights

COPYRIGHT
Nature of Copyright
- The exclusive right secured by law to an author or his assigns to
multiply and dispose of copies of an intellectual or artistic creation,
whether by mechanical reproduction or by public presentation
45

- Social interest in copyright: encouraging individuals to intellectual labor
by assuring them just rewards, and by securing society of the largest
benefits of their products
- It is a limited monopoly
- It is an incorporeal right to print and publish, and exists independent of
the corporeal property out of which it arises
- It is intangible property
- Law recognizes artistic and literary productions not only in respect of
ownership of the thing, but also in respect of the intangible estate
arising from the privilege of publishing and selling to others copies of
the thing produced

What may be Copyrighted
a. Books, manuscripts, directories and gazetteers
b. Periodicals, pamphlets, newspapers
c. Lectures, sermons, addresses, dissertations
d. Letters
e. Dramatic compositions, choreographic works
f. Musical compositions
g. Work of drawing, painting, architecture, sculpture engraving,
lithography, and other works of art
h. Reproductions of a work of art
i. Original ornamental designs or models for articles of manufacture
and other works of applied art
j. Maps, plans, sketches, and charts
k. Drawings or plastic works of scientific or technical character
l. Photographic works
m. Cinematography
n. Computer programs
o. Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps
46

p. Dramatizations, translations, adaptations, abridgements,
arrangements of literary, musical, or artistic works
q. Collections of literary, scholarly, or artistic works
r. Other literary, scholarly, scientific and artistic works

What Cannot be Copyrighted
- Immoral or unchaste work
- To be determined by the minister of justice
- Government work but prior approval of government agency wherein
work is created shall be necessary for exploitation of such work for
profit

Rights of Copyright Owner
1. To reproduce and sell
2. To make any translations or other versions or arrangements
3. To exhibit, perform, represent
4. To make any other use or disposition

Extent of Protection
- Theories, speculations, ideas, or opinions are not covered copyright of
a book in which they are expressed
- But the association and combination of ideas and thoughts to make a
particular composition, and the appropriation and use of them in that
arrangement or combination is an infringement
- Once published, author ceases to have any exclusive claim to the
ideas or sentiments
- Copyright cannot prevent another author from expressing in his own
way the truths of a science or from explaining and using in his own way
the methods of an art where such truths and methods are the common
property of the whole world

47

Infringement of a Copyright
- The doing of any person, without the consent of the owner of the
copyright, of anything the sole right to do which is conferred by statute
on the owner of the copyright
- Unlawful invasion of any one or more of the exclusive rights conferred
by the copyright
- Copying the copyrighted work
- Paraphrasing, appropriation of literary work and ideas of another
- Not necessary that whole work is copied, it being sufficient that so
much is taken that the value of the original is sensibly diminished
- Complete identity not essential
- The fact that an infringer acknowledges the source from which the
appropriated matter was derived has no bearing on the question of
infringement
Remedies for Infringement
1. Damages
2. Injunction
3. Destruction
4. Prosecution

Duration of Protection
- During the lifetime of creator and for 50 years after his death
- 30 years: Periodicals and newspapers, works of applied art,
cinematographic or photographic works
- Upon expiration, such writings or works shall go to the public and
become public property

RA 8293 (Intellectual Property Code)

Section 4. Definitions.
48

4.1. The term "intellectual property rights" consists of:
a. Copyright and Related Rights;
b. Trademarks and Service Marks;
c. Geographic Indications;
d. Industrial Designs;
e. Patents;
f. Layout-Designs (Topographies) of Integrated Circuits; and
g. Protection of Undisclosed Information (n, TRIPS).

Section 22. Non-Patentable Inventions. - The following shall be
excluded from patent protection:
22.1. Discoveries, scientific theories and mathematical methods;
22.2. Schemes, rules and methods of performing mental acts, playing
games or doing business, and programs for computers;
22.3. Methods for treatment of the human or animal body by surgery or
therapy and diagnostic methods practiced on the human or animal body.
This provision shall not apply to products and composition for use in any
of these methods;
22.4. Plant varieties or animal breeds or essentially biological process for
the production of plants or animals. This provision shall not apply to
micro-organisms and non-biological and microbiological processes.
Provisions under this subsection shall not preclude Congress to consider
the enactment of a law providing sui generis protection of plant varieties
and animal breeds and a system of community intellectual rights
protection:
22.5. Aesthetic creations; and
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22.6. Anything which is contrary to public order or morality. (Sec. 8, R.A.
No. 165a)



Section 112. Definition of Industrial Design. - An industrial design is any
composition of lines or colors or any three-dimensional form, whether or
not associated-with lines or colors: Provided, That such composition or
form gives a special appearance to and can serve as pattern for an
industrial product or handicraft. (Sec. 55, R.A. No. 165a)

Section 172. Literary and Artistic Works. - 172.1. Literary and artistic
works, hereinafter referred to as "works", are original intellectual
creations in the literary and artistic domain protected from the moment of
their creation and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral
delivery, whether or not reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or
entertainment in dumb shows;
(f) Musical compositions, with or without words;
50

(g) Works of drawing, painting, architecture, sculpture, engraving,
lithography or other works of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture,
whether or not registrable as an industrial design, and other works of
applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional
works relative to geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process
analogous to photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced by
a process analogous to cinematography or any process for making
audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
172.2. Works are protected by the sole fact of their creation, irrespective
of their mode or form of expression, as well as of their content, quality
and purpose. (Sec. 2, P.D. No. 49a)


51

Section 173. Derivative Works. - 173.1. The following derivative works
shall also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments,
arrangements, and other alterations of literary or artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of
data and other materials which are original by reason of the selection or
coordination or arrangement of their contents. (Sec. 2, [P] and [Q], P.D.
No. 49)
173.2. The works referred to in paragraphs (a) and (b) of Subsection
173.1 shall be protected as new works: Provided however, That such
new work shall not affect the force of any subsisting copyright upon the
original works employed or any part thereof, or be construed to imply any
right to such use of the original works, or to secure or extend copyright in
such original works. (Sec. 8, P.D. 49; Art. 10, TRIPS)


Section 177. Copyright or Economic Rights. - Subject to the provisions
of Chapter VIII, copyright or economic rights shall consist of the
exclusive right to carry out, authorize or prevent the following acts:
177.1. Reproduction of the work or substantial portion of the work;
177.2. Dramatization, translation, adaptation, abridgment, arrangement
or other transformation of the work;
177.3. The first public distribution of the original and each copy of the
work by sale or other forms of transfer of ownership;
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177.4. Rental of the original or a copy of an audiovisual or
cinematographic work, a work embodied in a sound recording, a
computer program, a compilation of data and other materials or a
musical work in graphic form, irrespective of the ownership of the original
or the copy which is the subject of the rental; (n)
177.5. Public display of the original or a copy of the work;
177.6. Public performance of the work; and
177.7. Other communication to the public of the work. (Sec. 5, P. D. No.
49a)

Art. 417, NCC. Supra.

ii. Rights and choses in action NCC 417

Art. 417, NCC. Supra.