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1. Bicerra v.

Teneza

The issue posed by the parties in this appeal is whether the action involves title to real
property, as appellants contend, and therefore is cognizable by the Court of First
Instance (Sec. 44, par. [b], R.A. 296, as amended), whether it pertains to the jurisdiction
of the Justice of the Peace Court, as stated in the order appealed from, since there is no
real property litigated, the house having ceased to exist, and the amount of the demand
does exceed P2,000.00 (Sec. 88, id.)1
The dismissal of the complaint was proper. 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. It
should be noted that the complaint here is for recovery of damages. This is the only
positive relief prayed for by appellants. To be sure, they also asked that they be declared
owners of the dismantled house and/or of the materials. However, such declaration in no
wise constitutes the relief itself which if granted by final judgment could be enforceable
by execution, but is only incidental to the real cause of action to recover damages.
The order appealed from is affirmed. The appeal having been admitted in forma
pauperis, no costs are adjudged.

This case is before us on appeal from the order of the Court of First Instance of Abra
dismissing the complaint filed by appellants, upon motion of defendants-appellate on the
ground that the action was within the exclude (original) jurisdiction of the Justice of the
Peace Court of Lagangilang, of the same province.
The complaint alleges in substance that 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
actual damages the amount of P200.00, plus moral and consequential damages in the
amount of P600.00. The relief prayed for is that "the plaintiffs be declared the owners of
the house in question and/or the materials that resulted in (sic) its dismantling; (and) that
the defendants be orders pay the sum of P200.00, plus P600.00 as damages, the costs."

2. Punsalan v. Lacsamana
The sole issue presented by petitioner for resolution is whether or not

In the meantime, in 1974, while the properly was still in the alleged possession of
petitioner and with the alleged acquiescence of respondent PNB (Tarlac Branch), and
upon securing a permit from the Municipal Mayor, petitioner constructed a warehouse
on said property. Petitioner declared said warehouse for tax purposes for which he
was issued Tax Declaration No. 5619. Petitioner then leased the warehouse to one
Hermogenes Sibal for a period of 10 years starting January 1975.

respondent Court erred in denying the Motion to Set Case for Pre-trial with
respect to respondent Remedios Vda. de Lacsamana as the case had been
dismissed on the ground of improper venue upon motion of co-respondent
Philippine National Bank (PNB).
It appears that petitioner, Antonio Punsalan, Jr., was the former registered owner of a
parcel of land consisting of 340 square meters situated in Bamban, Tarlac. In 1963,
petitioner mortgaged said land to respondent PNB (Tarlac Branch) in the amount of
P10,000.00, but for failure to pay said amount, the property was foreclosed on December
16, 1970. Respondent PNB (Tarlac Branch) was the highest bidder in said foreclosure
proceedings. However, the bank secured title thereto only on December 14, 1977.

On July 26, 1978, a Deed of Sale was executed between respondent PNB (Tarlac
Branch) and respondent Lacsamana over the property. This contract was amended on
July 31, 1978, particularly to include in the sale, the building and improvement
thereon. By virtue of said instruments, respondent - Lacsamana secured title over the
property in her name (TCT No. 173744) as well as separate tax declarations for the land
and building. 1
On November 22, 1979, petitioner commenced suit for "Annulment of Deed of Sale with
Damages" against herein respondents PNB and Lacsamana before respondent Court of
First Instance of Rizal, Branch XXXI, Quezon City, essentially impugning the validity of
the sale of the building as embodied in the Amended Deed of Sale. In this connection,
petitioner alleged:
xxx xxx xxx

22. That defendant, Philippine National Bank, through its Branch On April 25, 1980, respondent Court granted respondent PNB's Motion to Dismiss as
Manager ... by virtue of the request of defendant ... executed a follows:
document dated July 31, 1978, entitled Amendment to Deed of
Acting upon the 'Motion to Dismiss' of the defendant Philippine
Absolute Sale ... wherein said defendant bank as Vendor sold to
National Bank dated March 13, 1980, considered against the plaintiff's
defendant Lacsamana the building owned by the plaintiff under Tax
opposition thereto dated April 1, 1980, including the reply therewith of
Declaration No. 5619, notwithstanding the fact that said building is not
said defendant, this Court resolves to DISMISS the plaintiff's complaint
owned by the bank either by virtue of the public auction sale conducted
for improper venue considering that the plaintiff's complaint which
by the Sheriff and sold to the Philippine National Bank or by virtue of
seeks for the declaration as null and void, the amendment to Deed of
the Deed of Sale executed by the bank itself in its favor on September
Absolute Sale executed by the defendant Philippine National Bank in
21, 1977 ...;
favor of the defendant Remedios T. Vda. de Lacsamana, on July 31,
23. That said defendant bank fraudulently mentioned ... that the sale in
1978, involves a warehouse allegedly owned and constructed by the
its favor should likewise have included the building, notwithstanding no
plaintiff on the land of the defendant Philippine National Bank situated
legal basis for the same and despite full knowledge that the Certificate
in the Municipality of Bamban, Province of Tarlac, which warehouse is
of Sale executed by the sheriff in its favor ... only limited the sale to the
an immovable property pursuant to Article 415, No. 1 of the New Civil
land, hence, by selling the building which never became the property
Code; and, as such the action of the plaintiff is a real action affecting
of defendant, they have violated the principle against 'pactum
title to real property which, under Section 2, Rule 4 of the New Rules of
commisorium'.
Court, must be tried in the province where the property or any part
thereof lies. 5
Petitioner prayed that the Deed of Sale of the building in favor of respondent Lacsamana
be declared null and void and that damages in the total sum of P230,000.00, more or In his Motion for Reconsideration of the aforestated Order, petitioner reiterated the
less, be awarded to him. 2
argument that the action to annul does not involve ownership or title to property but is
limited to the validity of the deed of sale and emphasized that the case should proceed
In her Answer filed on March 4, 1980,-respondent Lacsamana averred the affirmative with or without respondent PNB as respondent Lacsamana had already filed her Answer
defense of lack of cause of action in that she was a purchaser for value and invoked the to the Complaint and no issue on venue had been raised by the latter.
principle in Civil Law that the "accessory follows the principal". 3
On September 1, 1980,.respondent Court denied reconsideration for lack of merit.
On March 14, 1980, respondent PNB filed a Motion to Dismiss on the ground that venue
was improperly laid considering that the building was real property under article 415 (1) Petitioner then filed a Motion to Set Case for Pre-trial, in so far as respondent
of the New Civil Code and therefore section 2(a) of Rule 4 should apply. 4
Lacsamana was concerned, as the issues had already been joined with the filing of
respondent Lacsamana's Answer.
Opposing said Motion to Dismiss, petitioner contended that the action for annulment of
deed of sale with damages is in the nature of a personal action, which seeks to recover In the Order of November 10, 1980 respondent Court denied said Motion to Set Case for
not the title nor possession of the property but to compel payment of damages, which is Pre-trial as the case was already dismissed in the previous Orders of April 25, 1980 and
not an action affecting title to real property.
September 1, 1980.
Hence, this Petition for Certiorari, to which we gave due course.

We affirm respondent Court's Order denying the setting for pre-trial.


The warehouse claimed to be owned by petitioner is an immovable or real property as
provided in article 415(l) of the Civil Code. 6 Buildings are always immovable under the
Code. 7 A building treated separately from the land on which it stood is immovable
property and the mere fact that the parties to a contract seem to have dealt with it
separate and apart from the land on which it stood in no wise changed its character as
immovable property. 8
While it is true that petitioner does not directly seek the recovery of title or possession of
the property in question, his action for annulment of sale and his claim for damages are
closely intertwined with the issue of ownership of the building which, under the law, is
considered immovable property, the recovery of which is petitioner's primary objective.
The prevalent doctrine is that an action for the annulment or rescission of a sale of real
property does not operate to efface the fundamental and prime objective and nature of
the case, which is to recover said real property. It is a real action. 9
Respondent Court, therefore, did not err in dismissing the case on the ground of
improper venue (Section 2, Rule 4) 10, which was timely raised (Section 1, Rule 16) 11.
Petitioner's other contention that the case should proceed in so far as respondent
Lacsamana is concerned as she had already filed an Answer, which did not allege
improper venue and, therefore, issues had already been joined, is likewise untenable.
Respondent PNB is an indispensable party as the validity of the Amended Contract of
Sale between the former and respondent Lacsamana is in issue. It would, indeed, be
futile to proceed with the case against respondent Lacsamana alone.
WHEREFORE, the petition is hereby denied without prejudice to the refiling of the case
by petitioner Antonio Punsalan, Jr. in the proper forum.

3. Prudential Bank v. Panis

This is a petition for review on certiorari of the November 13, 1978 Decision * of the then
Court of First Instance of Zambales and Olongapo City in Civil Case No. 2443-0 entitled
"Spouses Fernando A. Magcale and Teodula Baluyut-Magcale vs. Hon. Ramon Y. Pardo
and Prudential Bank" declaring that the deeds of real estate mortgage executed by
respondent spouses in favor of petitioner bank are null and void.

SOUTH: By No. 2, Ardoin Street


EAST: By 37 Canda Street, and
WEST: By Ardoin Street.
All corners of the lot marked by conc. cylindrical monuments of the Bureau of Lands as
visible limits. ( Exhibit "A, " also Exhibit "1" for defendant).
Apart from the stipulations in the printed portion of the aforestated deed of mortgage,
there appears a rider typed at the bottom of the reverse side of the document under the
lists of the properties mortgaged which reads, as follows:
AND IT IS FURTHER AGREED that in the event the Sales Patent on the lot applied for
by the Mortgagors as herein stated is released or issued by the Bureau of Lands, the
Mortgagors hereby authorize the Register of Deeds to hold the Registration of same until
this Mortgage is cancelled, or to annotate this encumbrance on the Title upon authority
from the Secretary of Agriculture and Natural Resources, which title with annotation, shall
be released in favor of the herein Mortgage.

which were mortgaged to defendant Prudential Bank, in favor of


plaintiffs. On the basis of the aforesaid Patent, and upon its
transcription in the Registration Book of the Province of Zambales,
Original Certificate of Title No. P-2554 was issued in the name of
Plaintiff Fernando Magcale, by the Ex-Oficio Register of Deeds of
Zambales, on May 15, 1972.
For failure of plaintiffs to pay their obligation to defendant Bank after it
became due, and upon application of said defendant, the deeds of
Real Estate Mortgage (Exhibits "A" and "B") were extrajudicially
foreclosed. Consequent to the foreclosure was the sale of the
properties therein mortgaged to defendant as the highest bidder in a
public auction sale conducted by the defendant City Sheriff on April 12,
1978 (Exhibit "E"). The auction sale aforesaid was held despite written
request from plaintiffs through counsel dated March 29, 1978, for the
defendant City Sheriff to desist from going with the scheduled public
auction sale (Exhibit "D")." (Decision, Civil Case No. 2443-0, Rollo, pp.
29-31).

Respondent Court, in a Decision dated November 3, 1978 declared the deeds of Real
From the aforequoted stipulation, it is obvious that the mortgagee (defendant Prudential Estate Mortgage as null and void (Ibid., p. 35).
Bank) was at the outset aware of the fact that the mortgagors (plaintiffs) have already
filed a Miscellaneous Sales Application over the lot, possessory rights over which, were On December 14, 1978, petitioner filed a Motion for Reconsideration (Ibid., pp. 41-53),
mortgaged to it.
opposed by private respondents on January 5, 1979 (Ibid., pp. 54-62), and in an Order
dated January 10, 1979 (Ibid., p. 63), the Motion for Reconsideration was denied for lack
Exhibit "A" (Real Estate Mortgage) was registered under the Provisions of Act 3344 with of merit. Hence, the instant petition (Ibid., pp. 5-28).
the Registry of Deeds of Zambales on November 23, 1971.
The first Division of this Court, in a Resolution dated March 9, 1979, resolved to require
On May 2, 1973, plaintiffs secured an additional loan from defendant Prudential Bank in the respondents to comment (Ibid., p. 65), which order was complied with the Resolution
the sum of P20,000.00. To secure payment of this additional loan, plaintiffs executed in dated May 18,1979, (Ibid., p. 100), petitioner filed its Reply on June 2,1979 (Ibid., pp.
favor of the said defendant another deed of Real Estate Mortgage over the same 101-112).
properties previously mortgaged in Exhibit "A." (Exhibit "B;" also Exhibit "2" for
defendant). This second deed of Real Estate Mortgage was likewise registered with the Thereafter, in the Resolution dated June 13, 1979, the petition was given due course and
Registry of Deeds, this time in Olongapo City, on May 2,1973.
the parties were required to submit simultaneously their respective memoranda. (Ibid., p.
114).
On April 24, 1973, the Secretary of Agriculture issued Miscellaneous
Sales Patent No. 4776 over the parcel of land, possessory rights over

On July 18, 1979, petitioner filed its Memorandum (Ibid., pp. 116-144), while private Thus, while it is true that a mortgage of land necessarily includes, in the absence of
respondents filed their Memorandum on August 1, 1979 (Ibid., pp. 146-155).
stipulation of the improvements thereon, buildings, still a building by itself may be
mortgaged apart from the land on which it has been built. Such a mortgage would be still
In a Resolution dated August 10, 1979, this case was considered submitted for decision a real estate mortgage for the building would still be considered immovable property
(Ibid., P. 158).
even if dealt with separately and apart from the land (Leung Yee vs. Strong Machinery
Co., 37 Phil. 644). In the same manner, this Court has also established that possessory
In its Memorandum, petitioner raised the following issues:
rights over said properties before title is vested on the grantee, may be validly transferred
or conveyed as in a deed of mortgage (Vda. de Bautista vs. Marcos, 3 SCRA 438
1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND [1961]).
2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE
RESPONDENTS OF MISCELLANEOUS SALES PATENT NO. 4776 ON APRIL 24, 1972
UNDER ACT NO. 730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO.
P-2554 ON MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF
REAL ESTATE MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122).
This petition is impressed with merit.
The pivotal issue in this case is whether or not a valid real estate mortgage can be
constituted on the building erected on the land belonging to another.
The answer is in the affirmative.

Coming back to the case at bar, the records show, as aforestated that the original
mortgage deed on the 2-storey semi-concrete residential building with warehouse and on
the right of occupancy on the lot where the building was erected, was executed on
November 19, 1971 and registered under the provisions of Act 3344 with the Register of
Deeds of Zambales on November 23, 1971. Miscellaneous Sales Patent No. 4776 on the
land was issued on April 24, 1972, on the basis of which OCT No. 2554 was issued in
the name of private respondent Fernando Magcale on May 15, 1972. It is therefore
without question that the original mortgage was executed before the issuance of the final
patent and before the government was divested of its title to the land, an event which
takes effect only on the issuance of the sales patent and its subsequent registration in
the Office of the Register of Deeds (Visayan Realty Inc. vs. Meer, 96 Phil. 515; Director
of Lands vs. De Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-14702, May 23, 1961;
Pena "Law on Natural Resources", p. 49). Under the foregoing considerations, it is
evident that the mortgage executed by private respondent on his own building which was
erected on the land belonging to the government is to all intents and purposes a valid
mortgage.

In the enumeration of properties under Article 415 of the Civil Code of the Philippines,
this Court ruled that, "it is obvious that the inclusion of "building" separate and distinct
from the land, in said provision of law can only mean that a building is by itself an
immovable property." (Lopez vs. Orosa, Jr., et al., L-10817-18, Feb. 28, 1958; Associated
Inc. and Surety Co., Inc. vs. Iya, et al., L-10837-38, May 30,1958).
As to restrictions expressly mentioned on the face of respondents' OCT No. P-2554, it
will be noted that Sections 121, 122 and 124 of the Public Land Act, refer to land already
acquired under the Public Land Act, or any improvement thereon and therefore have no
application to the assailed mortgage in the case at bar which was executed before such
eventuality. Likewise, Section 2 of Republic Act No. 730, also a restriction appearing on
the face of private respondent's title has likewise no application in the instant case,
despite its reference to encumbrance or alienation before the patent is issued because it
refers specifically to encumbrance or alienation on the land itself and does not mention
anything regarding the improvements existing thereon.

But it is a different matter, as regards the second mortgage executed over the same
properties on May 2, 1973 for an additional loan of P20,000.00 which was registered with
the Registry of Deeds of Olongapo City on the same date. Relative thereto, it is evident
that such mortgage executed after the issuance of the sales patent and of the Original
Certificate of Title, falls squarely under the prohibitions stated in Sections 121, 122 and
124 of the Public Land Act and Section 2 of Republic Act 730, and is therefore null and
void.

PREMISES CONSIDERED, the decision of the Court of First Instance of Zambales &
Olongapo City is hereby MODIFIED, declaring that the Deed of Real Estate Mortgage for
P70,000.00 is valid but ruling that the Deed of Real Estate Mortgage for an additional
loan of P20,000.00 is null and void, without prejudice to any appropriate action the
Government may take against private respondents.
SO ORDERED.

4. Ladera v. Hodges
Petitioner points out that private respondents, after physically possessing the title for five
years, voluntarily surrendered the same to the bank in 1977 in order that the mortgaged
may be annotated, without requiring the bank to get the prior approval of the Ministry of G.R. No. 8027-R, September 23, 1952, Vol. 48, No. 12, Official Gazette 5374Reyes,
Natural Resources beforehand, thereby implicitly authorizing Prudential Bank to cause J.B.L., J.FACTS:
the annotation of said mortgage on their title.
Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised tosell a lot
However, the Court, in recently ruling on violations of Section 124 which refers to with an area of 278 square meters to Ladera, subject to certain terms
andconditions. The agreement called for a down payment of P 800.00 and monthlyinstall
Sections 118, 120, 122 and 123 of Commonwealth Act 141, has held:
ments of P 5.00 each with interest of 1% per month, until P 2,085 is paid in full. Incase of
... Nonetheless, we apply our earlier rulings because we believe that failure of the purchaser to make any monthly payment within 60 days after it felldue, the
as in pari delicto may not be invoked to defeat the policy of the State contract may be considered as rescinded or annulled.Ladera built a house on the lot.
neither may the doctrine of estoppel give a validating effect to a void Later on, she defaulted in the payment of the agreedmonthly installment. Hodges filed an
contract. Indeed, it is generally considered that as between parties to a action for the ejectment of Ladera.The court issued an alias writ of execution and
contract, validity cannot be given to it by estoppel if it is prohibited by pursuant thereto, the city sheriff leviedupon all rights, interests, and participation over the
law or is against public policy (19 Am. Jur. 802). It is not within the house of Ladera. At the auction sale,Laderas house was sold to Avelino A. Magno.
competence of any citizen to barter away what public policy by law Manuel P. Villa, later on, purchased thehouse from Magno.Ladera filed an action against
was to preserve (Gonzalo Puyat & Sons, Inc. vs. De los Amas and Hodges and the judgment sale purchasers. Judgmentwas rendered in favor of Ladera,
setting aside the sale for non-compliance with Rule 39,Rules of Court regarding judicial
Alino supra). ... (Arsenal vs. IAC, 143 SCRA 54 [1986]).
sales of real property. On appeal, Hodges contendsthat the house, being built on a lot
This pronouncement covers only the previous transaction already alluded to and does owned by another, should be regarded as movable or personal property.
not pass upon any new contract between the parties (Ibid), as in the case at bar. It
should not preclude new contracts that may be entered into between petitioner bank and ISSUE:
private respondents that are in accordance with the requirements of the law. After all,
private respondents themselves declare that they are not denying the legitimacy of their Whether or not Laderas house is an immovable property.
debts and appear to be open to new negotiations under the law (Comment; Rollo, pp.
95-96). Any new transaction, however, would be subject to whatever steps the HELD:
Government may take for the reversion of the land in its favor.
YES. The old Civil Code numerates among the things declared by it as immovable
property the following: lands, buildings, roads and constructions of all kind adhered to the

soil. The law does not make any distinction whether or not the owner of the lot is the one and the sheriff issued a receipt. It does not appear, however, that this money was turned over
who built. Also, since the principles of accession regard buildings and constructions as
to Hodges. Thereupon, Ladera spouses filed an action against Hodges, the sheriff, and the
mere accessories to the land on which it is built, it is logical that said accessories should
judgment sale purchasers, Magno and Villa to set aside the sale and recover the house. The
partake the nature of the principal thing.
lower court ruled in favor of Ladera. Hodges et al contend that the house being built on land
Doctrine: Article 315 of the Civil Code (now Article 415, New Civil Code) makes no

owned by another person should be regarded in law as movable or personal property.

distinction as to whether the owner of the land is or is not the owner of the building.
Issue: Whether the house being built on land owned by another should be regarded as
Facts: Ladera entered into a contract with Hodges whereby the latter promised to sell a lot

movable property.

subject to certain terms and conditions. In case of failure of the purchaser to make a monthly
payment within 60 days after it fell due, this contract may be taken and considered as

Held: According to Article 334 of the Civil Code (now 415), Immovable property are the

rescinded and annulled, in which case all sums of money paid would be considered rentals

following: Lands, building, roads, and constructions of all kinds adhering to the soil;

and the vendor shall be at liberty to dispose of the parcel of land with all the improvements

Applying the principle Ubi lex non distinguit nec nos distinguere debemu, the law makes no

theron to any other person in a manner as if this contract had never been made. After the

distinction as to whether the owner of the land is or is not the owner of the building. In view of

execution of the contract, Ladera built on a lot a house of mixed materials assessed at

the plain terms of the statute, the only possible doubt could arise in the case of a house sold

P4500.

for demolition.

Unfortunately, Ladera failed to pay the agreed installments, whereupon the appellant

In the case of immovables by destination, the code requires that they be placed by the owner

rescinded the contract and filed an action for ejectment. The MTC rendered a decision upon

of the tenement, in order to acquire the same nature or consideration of real property. In

agreement of the parties- Ladera to vacate and surrender possession of the lot and pay P10

cases of immovable by incorporation, the code nowhere requires that the attachment or

a month until delivery of the premises. The court issued an alias writ of execution and

incorporation be made by the owner of the land. The only criterion is union or incorporation

pursuant thereto the sheriff levied upon all rights, interests, and participation over your house

with the soil.

standing on the lot. The sheriff posted the notices of the sale but did not publish the same in
a newspaper of general circulation.

Ladera did not declare his house to be a chattel mortgage. The object of the levy or sale was
real property. The publication in a newspaper of general circulation was indispensible. It

At the auction sale Ladera did not attend because she had gone to Manila and the sheriff

being admitted that no publication was ever made, the execution sale was void and conferred

sold the property to Avelina Magno as the highest bidder. On July 6, 1948, Hodges sold the

no title on the purchaser.

lot to Manuel Villa and on the same day the latter purchased the house from Magno for P200
but this last transaction was not recorded.

The alleged purchaser at the auction sale, Magno, is a mere employee of the creditor
Hodges and the low bid made by her as well as the fact that she sold the house to Villa on

Ladera returned to Iloilo after the sale and learned of its results. She went to see the sheriff

the same day that Hodges sold him the land, proves that she was merely acting for and in

and upon the latters representation that she could redeem the property, she paid him P230

behalf of Hodges.

and that the latter is now the true owner of said property. It appears that on May 10,
1952, a definite deed of sale of the same house had been issued to respondent, as the
of subsequent purchasers. Unlike in sales of chattels and personalty, in transactions covering
highest bidder at an auction sale held, on September 29, 1950, in compliance with a writ
real property, possession in good faith is not equivalent to title.
of execution issued in Civil Case No. 6268 of the same court, entitled "Alto Surety &
Insurance Co., Inc. vs. Maximo Quiambao, Rosario Guevara and Ricardo Rivera," in
5. Evangelista v. Alto Surety & Insurance Co., Inc.
which judgment, for the sum of money, had been rendered in favor respondent herein, as
plaintiff therein. Hence, on June 13, 1953, Evangelista instituted the present action
against respondent and Ricardo Rivera, for the purpose of establishing his
(Evangelista) title over said house, securing possession thereof, apart from recovering
damages.
It should be noted that in sales of immovables, the lack of title of the vendor taints the rights

In its answer, respondent alleged, in substance, that it has a better right to the house,
because the sale made, and the definite deed of sale executed, in its favor, on
September 29, 1950 and May 10, 1952, respectively, precede the sale to Evangelista
(October 8, 1951) and the definite deed of sale in his favor (October 22, 1952). It, also,
made some special defenses which are discussed hereafter. Rivera, in effect, joined
forces with respondent. After due trial, the Court of First Instance of Manila rendered
judgment for Evangelista, sentencing Rivera and respondent to deliver the house in
question to petitioner herein and to pay him, jointly and severally, forty pesos (P40.00) a
month from October, 1952, until said delivery, plus costs.

Briefly, the facts are: On June 4, 1949, petitioner herein, Santos Evangelista, instituted
Civil Case No. 8235 of the Court of First, Instance of Manila entitled " Santos
Evangelista vs. Ricardo Rivera," for a sum of money. On the same date, he obtained a
writ of attachment, which levied upon a house, built by Rivera on a land situated in
Manila and leased to him, by filing copy of said writ and the corresponding notice of
attachment with the Office of the Register of Deeds of Manila, on June 8, 1949. In due
course, judgment was rendered in favor of Evangelista, who, on October 8, 1951, bought
the house at public auction held in compliance with the writ of execution issued in said
case. The corresponding definite deed of sale was issued to him on October 22, 1952,
upon expiration of the period of redemption. When Evangelista sought to take
possession of the house, Rivera refused to surrender it, upon the ground that he had
leased the property from the Alto Surety & Insurance Co., Inc. respondent herein

On appeal taken by respondent, this decision was reversed by the Court of Appeals,
which absolved said respondent from the complaint, upon the ground that, although the
writ of attachment in favor of Evangelista had been filed with the Register of Deeds of
Manila prior to the sale in favor of respondent, Evangelista did not acquire thereby a
preferential lien, the attachment having been levied as if the house in question were
immovable property, although in the opinion of the Court of Appeals, it is "ostensibly a
personal property." As such, the Court of Appeals held, "the order of attachment . . .
should have been served in the manner provided in subsection (e) of section 7 of Rule
59," of the Rules of Court, reading:
The property of the defendant shall be attached by the officer executing the
order in the following manner:
(e) Debts and credits, and other personal property not capable of manual
delivery, by leaving with the person owing such debts, or having in his
possession or under his control, such credits or other personal property, or with,

his agent, a copy of the order, and a notice that the debts owing by him to the
defendant, and the credits and other personal property in his possession, or
under his control, belonging to the defendant, are attached in pursuance of such
order. (Emphasis ours.)
However, the Court of Appeals seems to have been of the opinion, also, that the house
of Rivera should have been attached in accordance with subsection (c) of said section 7,
as "personal property capable of manual delivery, by taking and safely keeping in his
custody", for it declared that "Evangelists could not have . . . validly purchased Ricardo
Rivera's house from the sheriff as the latter was not in possession thereof at the time he
sold it at a public auction."
Evangelista now seeks a review, by certiorari, of this decision of the Court of Appeals. In
this connection, it is not disputed that although the sale to the respondent preceded that
made to Evangelists, the latter would have a better right if the writ of attachment, issued
in his favor before the sale to the respondent, had been properly executed or enforced.
This question, in turn, depends upon whether the house of Ricardo Rivera is real
property or not. In the affirmative case, the applicable provision would be subsection (a)
of section 7, Rule 59 of the Rules of Court, pursuant to which the attachment should be
made "by filing with the registrar of deeds a copy of the order, together with a description
of the property attached, and a notice that it is attached, and by leaving a copy of such
order, description, and notice with the occupant of the property, if any there be."
Respondent maintains, however, and the Court of Appeals held, that Rivera's house is
personal property, the levy upon which must be made in conformity with subsections (c)
and (e) of said section 7 of Rule 59. Hence, the main issue before us is whether a house,
constructed the lessee of the land on which it is built, should be dealt with, for purpose,
of attachment, as immovable property, or as personal property.
It is, our considered opinion that said house is not personal property, much less a debt,
credit or other personal property not capable of manual delivery, but immovable property.
As explicitly held, in Laddera vs. Hodges (48 Off. Gaz., 5374), "a true building (not
merely superimposed on the soil) is immovable or real property, whether it is erected by
the owner of the land or by usufructuary or lessee. This is the doctrine of our Supreme
Court in Leung Yee vs. Strong Machinery Company, 37 Phil., 644. And it is amply
supported by the rulings of the French Court. . . ."

It is true that the parties to a deed of chattel mortgage may agree to consider a house as
personal property for purposes of said contract (Luna vs. Encarnacion, * 48 Off. Gaz.,
2664; Standard Oil Co. of New York vs.Jaramillo, 44 Phil., 630; De Jesus vs. Juan Dee
Co., Inc., 72 Phil., 464). However, this view is good only insofar as the contracting
parties are concerned. It is based, partly, upon the principle of estoppel. Neither this
principle, nor said view, is applicable to strangers to said contract. Much less is it in point
where there has been no contractwhatsoever, with respect to the status of the house
involved, as in the case at bar. Apart from this, in Manarang vs. Ofilada (99 Phil., 108; 52
Off. Gaz., 3954), we held:
The question now before us, however, is: Does the fact that the parties entering
into a contract regarding a house gave said property the consideration of
personal property in their contract, bind the sheriff in advertising the property's
sale at public auction as personal property? It is to be remembered that in the
case at bar the action was to collect a loan secured by a chattel mortgage on
the house. It is also to be remembered that in practice it is the judgment creditor
who points out to the sheriff the properties that the sheriff is to levy upon in
execution, and the judgment creditor in the case at bar is the party in whose
favor the owner of the house had conveyed it by way of chattel mortgage and,
therefore, knew its consideration as personal property.
These considerations notwithstanding, we hold that the rules on execution
do not allow, and, we should notinterpret them in such a way as to allow, the
special consideration that parties to a contract may have desired to impart to
real estate, for example, as personal property, when they are, not ordinarily
so. Sales on execution affect the public and third persons. The regulation
governing sales on execution are for public officials to follow. The form of
proceedings prescribed for each kind of property is suited to its character, not to
the character, which the parties have given to it or desire to give it. When the
rules speak of personal property, property which is ordinarily so considered is
meant; and when real property is spoken of, it means property which is
generally known as real property. The regulations were never intended to suit
the consideration that parties may have privately given to the property levied
upon. Enforcement of regulations would be difficult were the convenience or
agreement of private parties to determine or govern the nature of the
proceedings. We therefore hold that the mere fact that a house was the subject
of the chattel mortgage and was considered as personal property by the parties

does not make said house personal property for purposes of the notice to be
given for its sale of public auction. This ruling is demanded by the need for a
definite, orderly and well defined regulation for official and public guidance and
would prevent confusion and misunderstanding.
We, therefore, declare that the house of mixed materials levied upon on
execution, although subject of a contract of chattel mortgage between the
owner and a third person, is real property within the purview of Rule 39, section
16, of the Rules of Court as it has become a permanent fixture of the land,
which, is real property. (42 Am. Jur. 199-200; Leung Yee vs. Strong Machinery
Co., 37 Phil., 644; Republic vs. Ceniza, et al., 90 Phil., 544; Ladera,, et
al. vs. Hodges, et al., [C.A.] Off. Gaz. 5374.)" (Emphasis ours.)
The foregoing considerations apply, with equal force, to the conditions for the levy of
attachment, for it similarly affects the public and third persons.
It is argued, however, that, even if the house in question were immovable property, its
attachment by Evangelista was void or ineffective, because, in the language of the Court
of Appeals, "after presenting a Copy of the order of attachment in the Office of the
Register of Deeds, the person who might then be in possession of the house, the sheriff
took no pains to serve Ricardo Rivera, or other copies thereof." This finding of the Court
of Appeals is neither conclusive upon us, nor accurate.

The Record on Appeal, annexed to the petition for Certiorari, shows that petitioner
alleged, in paragraph 3 of the complaint, that he acquired the house in question "as a
consequence of the levy of an attachment and execution of the judgment in Civil Case
No. 8235" of the Court of First Instance of Manila. In his answer (paragraph 2), Ricardo
Rivera admitted said attachment execution of judgment. He alleged, however, by way a
of special defense, that the title of respondent "is superior to that of plaintiff because it is
based on a public instrument," whereas Evangelista relied upon a "promissory note"
which "is only a private instrument"; that said Public instrument in favor of respondent
"is superior also to the judgment in Civil Case No. 8235"; and that plaintiff's claim against
Rivera amounted only to P866, "which is much below the real value" of said house, for
which reason it would be "grossly unjust to acquire the property for such an inadequate
consideration." Thus, Rivera impliedly admitted that his house had been attached, that
the house had been sold to Evangelista in accordance with the requisite formalities, and
that said attachment was valid, although allegedly inferior to the rights of respondent,
and the consideration for the sale to Evangelista was claimed to be inadequate.
Respondent, in turn, denied the allegation in said paragraph 3 of the complaint, but only
" for the reasons stated in its special defenses" namely: (1) that by virtue of the sale at
public auction, and the final deed executed by the sheriff in favor of respondent, the
same became the "legitimate owner of the house" in question; (2) that respondent "is a
buyer in good faith and for value"; (3) that respondent "took possession and control of
said house"; (4) that "there was no valid attachment by the plaintiff and/or the Sheriff of
Manila of the property in question as neither took actual or constructive possession or
control of the property at any time"; and (5) "that the alleged registration of plaintiff's
attachment, certificate of sale and final deed in the Office of Register of Deeds, Manila, if
there was any, is likewise, not valid as there is no registry of transactions covering
houses erected on land belonging to or leased from another." In this manner, respondent
claimed a better right, merely under the theory that, in case of double sale of immovable
property, the purchaser who first obtains possession in good faith, acquires title, if the
sale has not been "recorded . . . in the Registry of Property" (Art. 1544, Civil Code of the
Philippines), and that the writ of attachment and the notice of attachment in favor of
Evangelista should be considered unregistered, "as there is no registry of transactions
covering houses erected on land belonging to or leased from another." In fact, said
article 1544 of the Civil Code of the Philippines, governing double sales, was quoted on
page 15 of the brief for respondent in the Court of Appeals, in support of its fourth
assignment of error therein, to the effect that it "has preference or priority over the sale of
the same property" to Evangelista.

In other words, there was no issue on whether copy of the writ and notice of attachment
had been served on Rivera. No evidence whatsoever, to the effect that Rivera had not
been served with copies of said writ and notice, was introduced in the Court of First
Instance. In its brief in the Court of Appeals, respondent did not aver, or even, intimate,
that no such copies were served by the sheriff upon Rivera. Service thereof on Rivera
had been impliedly admitted by the defendants, in their respective answers, and by their
behaviour throughout the proceedings in the Court of First Instance, and, as regards
respondent, in the Court of Appeals. In fact, petitioner asserts in his brief herein (p. 26)
that copies of said writ and notice were delivered to Rivera, simultaneously with copies
of the complaint, upon service of summons, prior to the filing of copies of said writ and
notice with the register deeds, and the truth of this assertion has not been directly and
positively challenged or denied in the brief filed before us by respondent herein. The
latter did not dare therein to go beyond making a statement for the first time in the
course of these proceedings, begun almost five (5) years ago (June 18, 1953)
reproducing substantially the aforementioned finding of the Court of Appeals and then
quoting the same.
Considering, therefore, that neither the pleadings, nor the briefs in the Court of Appeals,
raised an issue on whether or not copies of the writ of attachment and notice of
attachment had been served upon Rivera; that the defendants had impliedly admitted-in
said pleadings and briefs, as well as by their conduct during the entire proceedings, prior
to the rendition of the decision of the Court of Appeals that Rivera had received
copies of said documents; and that, for this reason, evidently, no proof was introduced
thereon, we, are of the opinion, and so hold that the finding of the Court of Appeals to the
effect that said copies had not been served upon Rivera is based upon a
misapprehension of the specific issues involved therein and goes beyond the range of
such issues, apart from being contrary to the aforementioned admission by the parties,
and that, accordingly, a grave abuse of discretion was committed in making said finding,
which is, furthermore, inaccurate.

On December 14, 1959, defendants Rufino G. Pineda and his mother Juana Gonzales
(married to Gregorio Pineda), borrowed from plaintiff Conrado P. Navarro, the sum of
P2,500.00, payable 6 months after said date or on June 14, 1959. To secure the
indebtedness, Rufino executed a document captioned "DEED OF REAL ESTATE and
CHATTEL MORTGAGES", whereby Juana Gonzales, by way of Real Estate
Mortgage hypothecated a parcel of land, belonging to her, registered with the Register of
Deeds of Tarlac, under Transfer Certificate of Title No. 25776, and Rufino G. Pineda, by
way of Chattel Mortgage, mortgaged his two-story residential house, having a floor area
of 912 square meters, erected on a lot belonging to Atty. Vicente Castro, located at Bo.
Wherefore, the decision of the Court of Appeals is hereby reversed, and another one
San Roque, Tarlac, Tarlac; and one motor truck, registered in his name, under Motor
shall be entered affirming that of the Court of First Instance of Manila, with the costs of
Vehicle Registration Certificate No. A-171806. Both mortgages were contained in one
this instance against respondent, the Alto Surety and Insurance Co., Inc. It is so ordered.
instrument, which was registered in both the Office of the Register of Deeds and the
Motor Vehicles Office of Tarlac.
6. Navarro v. Pineda

When the mortgage debt became due and payable, the defendants, after demands residential house, subject of the mortgage therein, can be considered a Chattel and the
made on them, failed to pay. They, however, asked and were granted extension up to propriety of the attorney's fees.
June 30, 1960, within which to pay. Came June 30, defendants again failed to pay and,
for the second time, asked for another extension, which was given, up to July 30, 1960. On February 24, 1961, the lower court held
In the second extension, defendant Pineda in a document entitled "Promise",
... WHEREFORE, this Court renders decision in this Case:
categorically stated that in the remote event he should fail to make good the obligation
on such date (July 30, 1960), the defendant would no longer ask for further extension
(a) Dismissing the complaint with regard to defendant Gregorio Pineda;
and there would be no need for any formal demand, and plaintiff could proceed to take
whatever action he might desire to enforce his rights, under the said mortgage contract.
(b) Ordering defendants Juana Gonzales and the spouses Rufino Pineda and
In spite of said promise, defendants, failed and refused to pay the obligation.
Ramon Reyes, to pay jointly and severally and within ninety (90) days from the
receipt of the copy of this decision to the plaintiff Conrado P. Navarro the
On August 10, 1960, plaintiff filed a complaint for foreclosure of the mortgage and for
principal sum of P2,550.00 with 12% compounded interest per annum from
damages, which consisted of liquidated damages in the sum of P500.00 and 12% per
June 14, 1960, until said principal sum and interests are fully paid, plus P500.00
annum interest on the principal, effective on the date of maturity, until fully paid.
as liquidated damages and the costs of this suit, with the warning that in default
of said payment of the properties mentioned in the deed of real estate mortgage
Defendants, answering the complaint, among others, stated
and chattel mortgage (Annex "A" to the complaint) be sold to realize said
mortgage debt, interests, liquidated damages and costs, in accordance with the
Defendants admit that the loan is overdue but deny that portion of paragraph 4
pertinent provisions of Act 3135, as amended by Act 4118, and Art. 14 of the
of the First Cause of Action which states that the defendants unreasonably
Chattel Mortgage Law, Act 1508; and
failed and refuse to pay their obligation to the plaintiff the truth being the
defendants are hard up these days and pleaded to the plaintiff to grant them
(c) Ordering the defendants Rufino Pineda and Ramona Reyes, to deliver
more time within which to pay their obligation and the plaintiff refused;
immediately to the Provincial Sheriff of Tarlac the personal properties mentioned
in said Annex "A", immediately after the lapse of the ninety (90) days aboveWHEREFORE, in view of the foregoing it is most respectfully prayed that this
mentioned, in default of such payment.
Honorable Court render judgment granting the defendants until January 31,
1961, within which to pay their obligation to the plaintiff.
The above judgment was directly appealed to this Court, the defendants therein
On September 30, 1960, plaintiff presented a Motion for summary Judgment, claiming assigning only a single error, allegedly committed by the lower court, to wit
that the Answer failed to tender any genuine and material issue. The motion was set for
In holding that the deed of real estate and chattel mortgages appended to the
hearing, but the record is not clear what ruling the lower court made on the said motion.
complaint is valid, notwithstanding the fact that the house of the defendant
On November 11, 1960, however, the parties submitted a Stipulation of Facts, wherein
Rufino G. Pineda was made the subject of the chattel mortgage, for the reason
the defendants admitted the indebtedness, the authenticity and due execution of the
that it is erected on a land that belongs to a third person.
Real Estate and Chattel Mortgages; that the indebtedness has been due and unpaid
since June 14, 1960; that a liability of 12% per annum as interest was agreed, upon
failure to pay the principal when due and P500.00 as liquidated damages; that the Appellants contend that article 415 of the New Civil Code, in classifying a house as
instrument had been registered in the Registry of Property and Motor Vehicles Office, immovable property, makes no distinction whether the owner of the land is or not the
both of the province of Tarlac; that the only issue in the case is whether or not the owner of the building; the fact that the land belongs to another is immaterial, it is enough

that the house adheres to the land; that in case of immovables by incorporation, such as
houses, trees, plants, etc; the Code does not require that the attachment or incorporation
be made by the owner of the land, the only criterion being the union or incorporation with
the soil. In other words, it is claimed that "a building is an immovable property,
irrespective of whether or not said structure and the land on which it is adhered to,
belong to the same owner" (Lopez v. Orosa, G.R. Nos. L-10817-8, Feb. 28, 1958). (See
also the case of Leung Yee v. Strong Machinery Co., 37 Phil. 644). Appellants argue that
since only movables can be the subject of a chattel mortgage (sec. 1, Act No. 3952) then
the mortgage in question which is the basis of the present action, cannot give rise to an
action for foreclosure, because it is nullity. (Citing Associated Ins. Co., et al. v. Isabel Iya
v. Adriano Valino, et al., L-10838, May 30, 1958.)
The trial court did not predicate its decision declaring the deed of chattel mortgage valid
solely on the ground that the house mortgaged was erected on the land which belonged
to a third person, but also and principally on the doctrine of estoppel, in that "the parties
have so expressly agreed" in the mortgage to consider the house as chattel "for its
smallness and mixed materials of sawali and wood". In construing arts. 334 and 335 of
the Spanish Civil Code (corresponding to arts. 415 and 416, N.C.C.), for purposes of the
application of the Chattel Mortgage Law, it was held that under certain conditions, "a
property may have a character different from that imputed to it in said articles. It is
undeniable that the parties to a contract may by agreement, treat as personal property
that which by nature would be real property" (Standard Oil Co. of N.Y. v. Jaranillo, 44
Phil. 632-633)."There can not be any question that a building of mixed materials may be
the subject of a chattel mortgage, in which case, it is considered as between the parties
as personal property. ... The matter depends on the circumstances and the intention of
the parties". "Personal property may retain its character as such where it is so agreed by
the parties interested even though annexed to the realty ...". (42 Am. Jur. 209-210, cited
in Manarang, et al. v. Ofilada, et al., G.R. No. L-8133, May 18, 1956; 52 O.G. No. 8, p.
3954.) The view that parties to a deed of chattel mortgagee may agree to consider a
house as personal property for the purposes of said contract, "is good only insofar as the
contracting parties are concerned. It is based partly, upon the principles of estoppel ..."
(Evangelista v. Alto Surety, No. L-11139, Apr. 23, 1958). In a case, a mortgage house
built on a rented land, was held to be a personal property, not only because the deed of
mortgage considered it as such, but also because it did not form part of the land
(Evangelista v. Abad [CA];36 O.G. 2913), for it is now well settled that an object placed
on land by one who has only a temporary right to the same, such as a lessee or
usufructuary, does not become immobilized by attachment (Valdez v. Central Altagracia,

222 U.S. 58, cited in Davao Sawmill Co., Inc. v. Castillo, et al., 61 Phil. 709). Hence, if a
house belonging to a person stands on a rented land belonging to another person, it may
be mortgaged as a personal property is so stipulated in the document of mortgage.
(Evangelista v. Abad, supra.) It should be noted, however, that the principle is predicated
on statements by the owner declaring his house to be a chattel, a conduct that may
conceivably estop him from subsequently claiming otherwise (Ladera, et al.. v. C. N.
Hodges, et al., [CA]; 48 O.G. 5374). The doctrine, therefore, gathered from these cases
is that 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.
The cases cited by appellants are not applicable to the present case. The Iya cases (L10837-38, supra), refer to a building or a house of strong materials, permanently adhered
to the land, belonging to the owner of the house himself. In the case of Lopez v. Orosa,
(L-10817-18), the subject building was a theatre, built of materials worth more than
P62,000, attached permanently to the soil. In these cases and in the Leung Yee
case, supra, third persons assailed the validity of the deed of chattel mortgages; in the
present case, it was one of the parties to the contract of mortgages who assailed its
validity.
CONFORMABLY WITH ALL THE FOREGOING, the decision appealed from, should be,
as it is hereby affirmed, with costs against appellants.

7. Tumulad v. Vicencio

Case certified to this Court by the Court of Appeals (CA-G.R. No. 27824-R) for the
reason that only questions of law are involved.
This case was originally commenced by defendants-appellants in the municipal court of
Manila in Civil Case No. 43073, for ejectment. Having lost therein, defendants-appellants
appealed to the court a quo (Civil Case No. 30993) which also rendered a decision
against them, the dispositive portion of which follows:
WHEREFORE, the court hereby renders judgment in favor of the
plaintiffs and against the defendants, ordering the latter to pay jointly
and severally the former a monthly rent of P200.00 on the house,
subject-matter of this action, from March 27, 1956, to January 14,
1967, with interest at the legal rate from April 18, 1956, the filing of the
complaint, until fully paid, plus attorney's fees in the sum of P300.00
and to pay the costs.

It appears on the records that on 1 September 1955 defendants-appellants executed a


chattel mortgage in favor of plaintiffs-appellees over their house of strong materials
located at No. 550 Int. 3, Quezon Boulevard, Quiapo, Manila, over Lot Nos. 6-B and 7-B,
Block No. 2554, which were being rented from Madrigal & Company, Inc. The mortgage
was registered in the Registry of Deeds of Manila on 2 September 1955. The herein
mortgage was executed to guarantee a loan of P4,800.00 received from plaintiffsappellees, payable within one year at 12% per annum. The mode of payment was
P150.00 monthly, starting September, 1955, up to July 1956, and the lump sum of
P3,150 was payable on or before August, 1956. It was also agreed that default in the
payment of any of the amortizations, would cause the remaining unpaid balance to
becomeimmediately due and Payable and

Instead, they relied on their memoranda in support of their motion to dismiss, predicated
mainly on the grounds that: (a) the municipal court did not have jurisdiction to try and
decide the case because (1) the issue involved, is ownership, and (2) there was no
allegation of prior possession; and (b) failure to prove prior demand pursuant to Section
2, Rule 72, of the Rules of Court. 6

During the pendency of the appeal to the Court of First Instance, defendants-appellants
failed to deposit the rent for November, 1956 within the first 10 days of December, 1956
as ordered in the decision of the municipal court. As a result, the court granted plaintiffsappellees' motion for execution, and it was actually issued on 24 January 1957.
However, the judgment regarding the surrender of possession to plaintiffs-appellees
could not be executed because the subject house had been already demolished on 14
the Chattel Mortgage will be enforceable in accordance with the January 1957 pursuant to the order of the court in a separate civil case (No. 25816) for
provisions of Special Act No. 3135, and for this purpose, the Sheriff of ejectment against the present defendants for non-payment of rentals on the land on
the City of Manila or any of his deputies is hereby empowered and which the house was constructed.
authorized to sell all the Mortgagor's property after the necessary
publication in order to settle the financial debts of P4,800.00, plus 12% The motion of plaintiffs for dismissal of the appeal, execution of the supersedeas bond
and withdrawal of deposited rentals was denied for the reason that the liability therefor
yearly interest, and attorney's fees... 2
was disclaimed and was still being litigated, and under Section 8, Rule 72, rentals
When defendants-appellants defaulted in paying, the mortgage was extrajudicially deposited had to be held until final disposition of the appeal. 7
foreclosed, and on 27 March 1956, the house was sold at public auction pursuant to the
said contract. As highest bidder, plaintiffs-appellees were issued the corresponding On 7 October 1957, the appellate court of First Instance rendered its decision, the
certificate of sale. 3 Thereafter, on 18 April 1956, plaintiffs-appellant commenced Civil dispositive portion of which is quoted earlier. The said decision was appealed by
Case No. 43073 in the municipal court of Manila, praying, among other things, that the defendants to the Court of Appeals which, in turn, certified the appeal to this Court.
house be vacated and its possession surrendered to them, and for defendants- Plaintiffs-appellees failed to file a brief and this appeal was submitted for decision without
appellants to pay rent of P200.00 monthly from 27 March 1956 up to the time the it.
possession is surrendered. 4 On 21 September 1956, the municipal court rendered its
Defendants-appellants submitted numerous assignments of error which can be
decision
condensed into two questions, namely: .
... ordering the defendants to vacate the premises described in the
(a) Whether the municipal court from which the case originated had
complaint; ordering further to pay monthly the amount of P200.00 from
jurisdiction to adjudicate the same;
March 27, 1956, until such (time that) the premises is (sic) completely
5
vacated; plus attorney's fees of P100.00 and the costs of the suit.
(b) Whether the defendants are, under the law, legally bound to pay
rentals to the plaintiffs during the period of one (1) year provided by
Defendants-appellants, in their answers in both the municipal court and court a
law for the redemption of the extrajudicially foreclosed house.
quo impugned the legality of the chattel mortgage, claiming that they are still the owners
of the house; but they waived the right to introduce evidence, oral or documentary.

We will consider these questions seriatim.

Neither is it disclosed that steps were taken to nullify the same. Hence, defendantsappellants' claim of ownership on the basis of a voidable contract which has not been
(a) Defendants-appellants mortgagors question the jurisdiction of the municipal court voided fails.
from which the case originated, and consequently, the appellate jurisdiction of the Court
of First Instance a quo, on the theory that the chattel mortgage is void ab initio; whence it It is claimed in the alternative by defendants-appellants that even if there was no fraud,
would follow that the extrajudicial foreclosure, and necessarily the consequent auction deceit or trickery, the chattel mortgage was still null and void ab initio because only
sale, are also void. Thus, the ownership of the house still remained with defendants- personal properties can be subject of a chattel mortgage. The rule about the status of
appellants who are entitled to possession and not plaintiffs-appellees. Therefore, it is buildings as immovable property is stated in Lopez vs. Orosa, Jr. and Plaza Theatre
argued by defendants-appellants, the issue of ownership will have to be adjudicated first Inc., 15 cited in Associated Insurance Surety Co., Inc. vs. Iya, et al. 16 to the effect that
in order to determine possession. lt is contended further that ownership being in issue, it
... it is obvious that the inclusion of the building, separate and distinct
is the Court of First Instance which has jurisdiction and not the municipal court.
from the land, in the enumeration of what may constitute real
Defendants-appellants predicate their theory of nullity of the chattel mortgage on two
properties (art. 415, New Civil Code) could only mean one thing
grounds, which are: (a) that, their signatures on the chattel mortgage were obtained
that a building is by itself an immovable property irrespective of
through fraud, deceit, or trickery; and (b) that the subject matter of the mortgage is a
whether or not said structure and the land on which it is adhered to
house of strong materials, and, being an immovable, it can only be the subject of a real
belong to the same owner.
estate mortgage and not a chattel mortgage.
Certain deviations, however, have been allowed for various reasons. In the case
On the charge of fraud, deceit or trickery, the Court of First Instance found defendants- of Manarang and Manarang vs. Ofilada, 17 this Court stated that "it is undeniable that the
appellants' contentions as not supported by evidence and accordingly dismissed the parties to a contract may by agreement treat as personal property that which by nature
charge, 8 confirming the earlier finding of the municipal court that "the defense of would be real property", citing Standard Oil Company of New York vs. Jaramillo. 18 In the
ownership as well as the allegations of fraud and deceit ... are mere allegations." 9
latter case, the mortgagor conveyed and transferred to the mortgagee by way of
mortgage "the following described personal property."19 The "personal property"
It has been held in Supia and Batiaco vs. Quintero and Ayala 10 that "the answer is a consisted of leasehold rights and a building. Again, in the case of Luna vs.
mere statement of the facts which the party filing it expects to prove, but it is not Encarnacion, 20 the subject of the contract designated as Chattel Mortgage was a house
evidence; 11 and further, that when the question to be determined is one of title, the Court of mixed materials, and this Court hold therein that it was a valid Chattel mortgage
is given the authority to proceed with the hearing of the cause until this fact is clearly because it was so expressly designated and specifically that the property given as
established. In the case of Sy vs. Dalman, 12 wherein the defendant was also a security "is a house of mixed materials, which by its very nature is considered personal
successful bidder in an auction sale, it was likewise held by this Court that in detainer property." In the later case of Navarro vs. Pineda, 21 this Court stated that
cases the aim of ownership "is a matter of defense and raises an issue of fact which
should be determined from the evidence at the trial." What determines jurisdiction are the
The view that parties to a deed of chattel mortgage may agree to
13
allegations or averments in the complaint and the relief asked for.
consider a house as personal property for the purposes of said
contract, "is good only insofar as the contracting parties are
Moreover, even granting that the charge is true, fraud or deceit does not render a
concerned. It is based, partly, upon the principle of estoppel"
contract void ab initio, and can only be a ground for rendering the contract voidable or
(Evangelista vs. Alto Surety, No. L-11139, 23 April 1958). In a case, a
annullable pursuant to Article 1390 of the New Civil Code, by a proper action in
mortgaged house built on a rented land was held to be a personal
14
court. There is nothing on record to show that the mortgage has been annulled.
property, not only because the deed of mortgage considered it as

such, but also because it did not form part of the land (Evangelists vs.
Abad, [CA]; 36 O.G. 2913), for it is now settled that an object placed
on land by one who had only a temporary right to the same, such as
the lessee or usufructuary, does not become immobilized by
attachment (Valdez vs. Central Altagracia, 222 U.S. 58, cited in Davao
Sawmill Co., Inc. vs. Castillo, et al., 61 Phil. 709). Hence, if a house
belonging to a person stands on a rented land belonging to another
person, it may be mortgaged as a personal property as so stipulated in
the document of mortgage. (Evangelista vs. Abad, Supra.) It should be
noted, however that the principle is predicated on statements by the
owner declaring his house to be a chattel, a conduct that may
conceivably estop him from subsequently claiming otherwise. (Ladera
vs. C.N. Hodges, [CA] 48 O.G. 5374): 22

the said court limited itself to sentencing the erstwhile mortgagors to pay plaintiffs a
monthly rent of P200.00 from 27 March 1956 (when the chattel mortgage was foreclosed
and the house sold) until 14 January 1957 (when it was torn down by the Sheriff), plus
P300.00 attorney's fees.

(b) Turning to the question of possession and rentals of the premises in question. The
Court of First Instance noted in its decision that nearly a year after the foreclosure sale
the mortgaged house had been demolished on 14 and 15 January 1957 by virtue of a
decision obtained by the lessor of the land on which the house stood. For this reason,

In other words, before the expiration of the 1-year period within which
the judgment-debtor or mortgagor may redeem the property, the
purchaser thereof is not entitled, as a matter of right, to possession of
the same. Thus, while it is true that the Rules of Court allow the

Appellants mortgagors question this award, claiming that they were entitled to remain in
possession without any obligation to pay rent during the one year redemption period after
the foreclosure sale, i.e., until 27 March 1957. On this issue, We must rule for the
appellants.

Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No.
1508. 28 Section 14 of this Act allows the mortgagee to have the property mortgaged sold
at public auction through a public officer in almost the same manner as that allowed by
Act No. 3135, as amended by Act No. 4118, provided that the requirements of the law
In the contract now before Us, the house on rented land is not only expressly designated relative to notice and registration are complied with. 29 In the instant case, the parties
as Chattel Mortgage; it specifically provides that "the mortgagor ... voluntarily CEDES, specifically stipulated that "the chattel mortgage will be enforceable in accordance with
SELLS and TRANSFERS by way of Chattel Mortgage 23 the property together with its the provisions of Special Act No. 3135 ... ." 30 (Emphasis supplied).
leasehold rights over the lot on which it is constructed and participation ..." 24Although
there is no specific statement referring to the subject house as personal property, yet by Section 6 of the Act referred to 31 provides that the debtor-mortgagor (defendantsceding, selling or transferring a property by way of chattel mortgage defendants- appellants herein) may, at any time within one year from and after the date of the auction
appellants could only have meant to convey the house as chattel, or at least, intended to sale, redeem the property sold at the extra judicial foreclosure sale. Section 7 of the
treat the same as such, so that they should not now be allowed to make an inconsistent same Act 32 allows the purchaser of the property to obtain from the court the possession
stand by claiming otherwise. Moreover, the subject house stood on a rented lot to which during the period of redemption: but the same provision expressly requires the filing of a
defendats-appellants merely had a temporary right as lessee, and although this can not petition with the proper Court of First Instance and the furnishing of a bond. It is only
in itself alone determine the status of the property, it does so when combined with other upon filing of the proper motion and the approval of the corresponding bond that the
factors to sustain the interpretation that the parties, particularly the mortgagors, intended order for a writ of possession issues as a matter of course. No discretion is left to the
to treat the house as personalty. Finally unlike in the Iya cases, Lopez vs. Orosa, Jr. and court. 33 In the absence of such a compliance, as in the instant case, the purchaser can
Plaza Theatre, Inc. 25 and Leung Yee vs. F. L. Strong Machinery and not claim possession during the period of redemption as a matter of right. In such a case,
Williamson, 26 wherein third persons assailed the validity of the chattel mortgage, 27 it is the governing provision is Section 34, Rule 39, of the Revised Rules of Court 34 which
applies
to
properties
purchased
in
extrajudicial
foreclosure
the defendants-appellants themselves, as debtors-mortgagors, who are attacking the also
35
proceedings.
Construing
the
said
section,
this
Court
stated
in
the
aforestated
case
validity of the chattel mortgage in this case. The doctrine of estoppel therefore applies to
of Reyes vs. Hamada.
the herein defendants-appellants, having treated the subject house as personalty.

purchaser to receive the rentals if the purchased property is occupied


by tenants, he is, nevertheless, accountable to the judgment-debtor
or mortgagor as the case may be, for the amount so received and the
same will be duly credited against the redemption price when the said
debtor or mortgagor effects the redemption.Differently stated, the
rentals receivable from tenants, although they may be collected by the
purchaser during the redemption period, do not belong to the latter but
still pertain to the debtor of mortgagor. The rationale for the Rule, it
seems, is to secure for the benefit of the debtor or mortgagor, the
payment of the redemption amount and the consequent return to him
of his properties sold at public auction. (Emphasis supplied)

8. Manarang v. Ofilada

The Hamada case reiterates the previous ruling in Chan vs. Espe. 36
Since the defendants-appellants were occupying the house at the time of the auction
sale, they are entitled to remain in possession during the period of redemption or within
one year from and after 27 March 1956, the date of the auction sale, and to collect the
rents or profits during the said period.
It will be noted further that in the case at bar the period of redemption had not yet expired
when action was instituted in the court of origin, and that plaintiffs-appellees did not
choose to take possession under Section 7, Act No. 3135, as amended, which is the law
selected by the parties to govern the extrajudicial foreclosure of the chattel mortgage.
Neither was there an allegation to that effect. Since plaintiffs-appellees' right to possess
was not yet born at the filing of the complaint, there could be no violation or breach
thereof. Wherefore, the original complaint stated no cause of action and was prematurely
filed. For this reason, the same should be ordered dismissed, even if there was no
assignment of error to that effect. The Supreme Court is clothed with ample authority to
review palpable errors not assigned as such if it finds that their consideration is
necessary in arriving at a just decision of the cases. 37

DECISION
LABRADOR, J.:
On September 8, 1951, Petitioner Lucia D. Manarang obtained a loan of P200 from
Ernesto Esteban, and to secure its payment she executed a chattel mortgage over a
house of mixed materials erected on a lot on Alvarado Street, Manila. As Manarang did
not pay the loan as agreed upon, Esteban brought an action against her in the municipal
court of Manila for its recovery, alleging that the loan was secured by a chattel mortgage
on her property. Judgment having been entered in Plaintiffs favor, execution was issued
against the same property mortgaged.

It follows that the court below erred in requiring the mortgagors to pay rents for the year Before the property could be sold Manarang offered to pay the sum of P277, which
represented the amount of the judgment of P250, the interest thereon, the costs, and the
following the foreclosure sale, as well as attorney's fees.
sheriffs fees, but the sheriff refused the tender unless the additional amount of P260
FOR THE FOREGOING REASONS, the decision appealed from is reversed and another representing the publication of the notice of sale in two newspapers be paid also.
So Defendants therein brought this suit to compel the sheriff to accept the amount of
one entered, dismissing the complaint. With costs against plaintiffs-appellees.
P277 as full payment of the judgment and to annul the published notice of sale.

It is to be noted that in the complaint filed in the municipal court, a copy of the chattel
mortgage is attached and mention made of its registration, and in the prayer request is
made that the house mortgaged be sold at public auction to satisfy the debt. It is also
important to note that the house mortgaged was levied upon at Plaintiffs request (Exhibit
E).
On the basis of the above facts counsel for Manarang contended in the court below that
the house in question should be considered as personal property and the publication of
the notice of its sale at public auction in execution considered unnecessary. The Court of
First Instance held that although real property may sometimes be considered as personal
property, the sheriff was in duty bound to cause the publication of the notice of its sale in
order to make the sale valid or to prevent its being declared void or voidable, and he did
not, therefore, err in causing such publication of the notice. So it denied the petition.
There cannot be any question that a building of mixed materials may be the subject of a
chattel mortgage, in which case it is considered as between the parties as personal
property. We held so expressly in the cases of Luna vs. Encarnacion, et al., * 48 Off.
Gaz., No. 7, p. 2664; chan roblesvirtualawlibraryStandard Oil Co. of New York vs.
Jaranillo, 44 Phil., 630; chan roblesvirtualawlibraryand De Jesus vs. Guan Dee Co., Inc.,
72 Phil., 464. The matter depends on the circumstances and the intention of the parties.
cralaw The general principle of law is that a building permanently fixed to the freehold
becomes a part of it, that prima facie a house is real estate, belonging to the owner of
the land on which it stands, even though it was erected against the will of the landowner,
or without his consent cralaw . The general rule is otherwise, however, where the
improvement is made with the consent of the landowner, and pursuant to an
understanding either expressed or implied that it shall remain personal property. Nor
does the general rule apply to a building which is wrongfully removed from the land and
placed on the land of the person removing it. (42 Am. Jur. 199-200.)

the sheriff the properties that the sheriff is to levy upon in execution, and the judgment
creditor in the case at bar is the party in whose favor the owner of the house and
conveyed it by way of chattel mortgage and, therefore, knew its consideration as
personal property.
These considerations notwithstanding, we hold that the rules on execution do not allow,
and we should not interpret them in such a way as to allow, the special consideration that
parties to a contract may have desired to impart to real estate, for example, as personal
property, when they are not ordinarily so. Sales on execution affect the public and third
persons. The regulation governing sales on execution are for public officials to follow.
The form of proceedings prescribed for each kind of property is suited to its character,
not to the character which the parties have given to it or desire to give it. When the rules
speak of personal property, property which is ordinarily so considered is meant; chan
roblesvirtualawlibraryand when real property is spoken of, it means property which is
generally known as real property. The regulations were never intended to suit the
consideration that parties, may have privately given to the property levied upon.
Enforcement of regulations would be difficult were the convenience or agreement of
private parties to determine or govern the nature of the proceedings. We, therefore, hold
that the mere fact that a house was the subject of a chattel mortgage and was
considered as personal property by the parties does not make said house personal
property for purposes of the notice to be given for its sale at public auction. This ruling is
demanded by the need for a definite, orderly and well- defined regulation for official and
public guidance and which would prevent confusion and misunderstanding.

We, therefore, declare that the house of mixed materials levied upon on execution,
although subject of a contract of chattel mortgage between the owner and a third person,
is real property within the purview of Rule 39, section 16, of the Rules of Court as it has
become a permanent fixture on the land, which is real property. (42 Am. Jur. 199200; chan roblesvirtualawlibraryLeung Yee vs. Strong Machinery Co., 37 Phil., 644; chan
cralaw Among the principal criteria for determining whether property remains personally roblesvirtualawlibraryRepublic vs. Ceniza, et al., 90 Phil., 544; chan
or becomes realty are annexation to the soil, either actual or construction, and the roblesvirtualawlibraryLadera, et al. vs. Hodges, et al., [C. A], 48 Off. Gaz., 5374.).
intention of the parties cralaw
The judgment appealed from is hereby affirmed, with costs. SO ORDERED.
Personal property may retain its character as such where it is so agreed by the parties
interested even though annexed to the realty, or where it is affixed in the soil to be used
for a particular purpose for a short period and then removed as soon as it has served its
purpose cralaw . (Ibid., 209-210.)
The question now before us, however, is:chanroblesvirtuallawlibrary Does the fact that
the parties entering into a contract regarding a house gave said property the
consideration of personal property in their contract, bind the sheriff in advertising the
propertys sale at public auction as personal property? It is to be remembered that in the
case at bar the action was to collect a loan secured by a chattel mortgage on the house.
It is also to be remembered that in practice it is the judgment creditor who points out to

9. Associate Ins. & Surety Co., Inc. v. Iya

G.R. Nos. L-10837-38

May 30, 1958

ASSOCIATED
INSURANCE
and
SURETY
COMPANY,
vs.
ISABEL IYA, ADRIANO VALINO and LUCIA VALINO, defendants.
ISABEL IYA, plaintiff,

INC., plaintiff,

vs.
Sometime in July, 1953, the surety company learned of the existence of the real estate
ADRIANO VALINO, LUCIA VALINO and ASSOCIATED INSURANCE and SURETY mortgage over the lot covered by T.C.T. No. 26884 together with the improvements
COMPANY. INC.,defendants.
thereon; thus, said surety company instituted Civil Case No. 2162 of the Court of First
Instance of Manila naming Adriano and Lucia Valino and Isabel Iya, the mortgagee, as
Jovita
L.
de
Dios
for
defendant
Isabel
Iya. defendants. The complaint prayed for the exclusion of the residential house from the real
M. Perez Cardenas and Apolonio Abola for defendant Associated Insurance and Surety estate mortgage in favor of defendant Iya and the declaration and recognition of plaintiff's
Co., Inc.
right to ownership over the same in virtue of the award given by the Provincial Sheriff of
Rizal during the public auction held on December 26, 1952. Plaintiff likewise asked the
FELIX, J.:
Court to sentence the spouses Valino to pay said surety moral and exemplary damages,
attorney's fees and costs. Defendant Isabel Iya filed her answer to the complaint alleging
Adriano Valino and Lucia A. Valino, husband and wife, were the owners and possessors among other things, that in virtue of the real estate mortgage executed by her coof a house of strong materials constructed on Lot No. 3, Block No. 80 of the Grace Park defendants, she acquired a real right over the lot and the house constructed thereon;
Subdivision in Caloocan, Rizal, which they purchased on installment basis from the that the auction sale allegedly conducted by the Provincial Sheriff of Rizal as a result of
Philippine Realty Corporation. On November 6, 1951, to enable her to purchase on credit the foreclosure of the chattel mortgage on the house was null and void for nonrice from the NARIC, Lucia A. Valino filed a bond in the sum of P11,000.00 (AISCO Bond compliance with the form required by law. She, therefore, prayed for the dismissal of the
No. G-971) subscribed by the Associated Insurance and Surety Co., Inc., and as complaint and anullment of the sale made by the Provincial Sheriff. She also demanded
counter-guaranty therefor, the spouses Valino executed an alleged chattel mortgage on the amount of P5,000.00 from plaintiff as counterclaim, the sum of P5,000.00 from her
the aforementioned house in favor of the surety company, which encumbrance was duly co-defendants as crossclaim, for attorney's fees and costs.
registered with the Chattel Mortgage Register of Rizal on December 6, 1951. It is
admitted that at the time said undertaking took place, the parcel of land on which the Defendants spouses in their answer admitted some of the averments of the complaint
house is erected was still registered in the name of the Philippine Realty Corporation. and denied the others. They, however, prayed for the dismissal of the action for lack of
Having completed payment on the purchase price of the lot, the Valinos were able to cause of action, it being alleged that plaintiff was already the owner of the house in
secure on October 18, 1958, a certificate of title in their name (T.C.T. No. 27884). question, and as said defendants admitted this fact, the claim of the former was already
Subsequently, however, or on October 24, 1952, the Valinos, to secure payment of an satisfied.
indebtedness in the amount of P12,000.00, executed a real estate mortgage over the lot
and the house in favor of Isabel Iya, which was duly registered and annotated at the On October 29, 1953, Isabel Iya filed another civil action against the Valinos and the
back of the certificate of title.
surety company (Civil Case No. 2504 of the Court of First Instance of Manila) stating that
pursuant to the contract of mortgage executed by the spouses Valino on October 24,
On the other hand, as Lucia A. Valino, failed to satisfy her obligation to the NARIC, the 1952, the latter undertook to pay a loan of P12,000.00 with interest at 12% per annum or
surety company was compelled to pay the same pursuant to the undertaking of the bond. P120.00 a month, which indebtedness was payable in 4 years, extendible for only one
In turn, the surety company demanded reimbursement from the spouses Valino, and as year; that to secure payment thereof, said defendants mortgaged the house and lot
the latter likewise failed to do so, the company foreclosed the chattel mortgage over the covered by T.C.T. No. 27884 located at No. 67 Baltazar St., Grace Park Subdivision,
house. As a result thereof, a public sale was conducted by the Provincial Sheriff of Rizal Caloocan, Rizal; that the Associated Insurance and Surety Co., Inc., was included as a
on December 26, 1952, wherein the property was awarded to the surety company for party defendant because it claimed to have an interest on the residential house also
P8,000.00, the highest bid received therefor. The surety company then caused the said covered by said mortgage; that it was stipulated in the aforesaid real estate mortgage
house to be declared in its name for tax purposes (Tax Declaration No. 25128).
that default in the payment of the interest agreed upon would entitle the mortgagee to
foreclose the same even before the lapse of the 4-year period; and as defendant

spouses had allegedly failed to pay the interest for more than 6 months, plaintiff prayed
the Court to order said defendants to pay the sum of P12,000.00 with interest thereon at
12% per annum from March 25, 1953, until fully paid; for an additional sum equivalent to
20% of the total obligation as damages, and for costs. As an alternative in case such
demand may not be met and satisfied plaintiff prayed for a decree of foreclosure of the
land, building and other improvements thereon to be sold at public auction and the
proceeds thereof applied to satisfy the demands of plaintiff; that the Valinos, the surety
company and any other person claiming interest on the mortgaged properties be barred
and foreclosed of all rights, claims or equity of redemption in said properties; and for
deficiency judgment in case the proceeds of the sale of the mortgaged property would be
insufficient to satisfy the claim of plaintiff.

the owner of the land at the time the contract with Isabel Iya was entered into, the
building was transformed into a real property and the real estate mortgage created
thereon was likewise adjudged as proper. It is to be noted in this connection that there is
no evidence on record to sustain the allegation of the spouses Valino that at the time
they mortgaged their house and lot to Isabel Iya, the latter was told or knew that part of
the mortgaged property, i.e., the house, had previously been mortgaged to the surety
company.

The two cases were jointly heard upon agreement of the parties, who submitted the
same on a stipulation of facts, after which the Court rendered judgment dated March 8,
1956, holding that the chattel mortgage in favor of the Associated Insurance and Surety
Co., Inc., was preferred and superior over the real estate mortgage subsequently
executed in favor of Isabel Iya. It was ruled that as the Valinos were not yet the
registered owner of the land on which the building in question was constructed at the
time the first encumbrance was made, the building then was still a personality and a
chattel mortgage over the same was proper. However, as the mortgagors were already

. . . while it is true that generally, real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building, separate and
distinct from the land, in the enumeration of what may constitute real properties
(Art. 415, new Civil Code) could only mean one thing that a building is
byitself an immovable property . . . Moreover, and in view of the absence of any
specific provision to the contrary, a building is an immovable property
irrespective of whether or not said structure and the land on which it is adhered
to belong to the same owner. (Lopez vs. Orosa, G.R. Nos. supra, p. 98).

The residential building was, therefore, ordered excluded from the foreclosure prayed for
by Isabel Iya, although the latter could exercise the right of a junior encumbrance. So the
spouses Valino were ordered to pay the amount demanded by said mortgagee or in their
default to have the parcel of land subject of the mortgage sold at public auction for the
Defendant surety company, in answer to this complaint insisted on its right over the satisfaction of Iya's claim.
building, arguing that as the lot on which the house was constructed did not belong to the
spouses at the time the chattel mortgage was executed, the house might be considered There is no question as to appellant's right over the land covered by the real estate
only as a personal property and that the encumbrance thereof and the subsequent mortgage; however, as the building constructed thereon has been the subject of 2
foreclosure proceedings made pursuant to the provisions of the Chattel Mortgage Law mortgages; controversy arise as to which of these encumbrances should receive
were proper and legal. Defendant therefore prayed that said building be excluded from preference over the other. The decisive factor in resolving the issue presented by this
the real estate mortgage and its right over the same be declared superior to that of appeal is the determination of the nature of the structure litigated upon, for where it be
considered a personality, the foreclosure of the chattel mortgage and the subsequent
plaintiff, for damages, attorney's fees and costs.
sale thereof at public auction, made in accordance with the Chattel Mortgage Law would
Taking side with the surety company, defendant spouses admitted the due execution of be valid and the right acquired by the surety company therefrom would certainly deserve
the mortgage upon the land but assailed the allegation that the building was included prior recognition; otherwise, appellant's claim for preference must be granted. The lower
thereon, it being contended that it was already encumbered in favor of the surety Court, deciding in favor of the surety company, based its ruling on the premise that as
company before the real estate mortgage was executed, a fact made known to plaintiff the mortgagors were not the owners of the land on which the building is erected at the
during the preparation of said contract and to which the latter offered no objection. As a time the first encumbrance was made, said structure partook of the nature of a personal
special defense, it was asserted that the action was premature because the contract was property and could properly be the subject of a chattel mortgage. We find reason to hold
for a period of 4 years, which had not yet elapsed.
otherwise, for as this Court, defining the nature or character of a building, has said:

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 the ownership of the land, would create a situation where a
permanent fixture changes its nature or character as the ownership of the land changes
hands. In the case at bar, as personal properties could only be the subject of a chattel
mortgage (Section 1, Act 3952) and as obviously the structure in question is not one, the
execution of the chattel mortgage covering said building is clearly invalid and a nullity.
While it is true that said document was correspondingly registered in the Chattel
Mortgage Register of Rizal, this act produced no effect whatsoever for where the interest
conveyed is in the nature of a real property, the registration of the document in the
registry of chattels is merely a futile act. Thus, the registration of the chattel mortgage of
a building of strong materials produce no effect as far as the building is concerned
(Leung Yee vs. Strong Machinery Co., 37 Phil., 644). Nor can we give any consideration
to the contention of the surety that it has acquired ownership over the property in
question by reason of the sale conducted by the Provincial Sheriff of Rizal, for as this
Court has aptly pronounced:
This is an appeal from an order of the Court of First Instance of Manila in Civil Case No.
A mortgage creditor who purchases real properties at an extrajudicial 47664 thereof. The pertinent facts are set forth in said order from which we quote:
foreclosure sale thereof by virtue of a chattel mortgage constituted in his favor,
which mortgage has been declared null and void with respect to said real
It appears from the complaint that on December 11, 1948, defendant herein
properties, acquires no right thereto by virtue of said sale (De la Riva vs. Ah
Conrado S. David received a loan of P3,000 with interest at 12% per annum
Keo, 60 Phil., 899).
from Claudia B. Vda. de Uy Kim, one of the plaintiffs, and to secure the
payment of the same, Conrado S. David executed a chattel mortgage on a
Wherefore the portion of the decision of the lower Court in these two cases appealed
house situated at 1259 Sande Street, Tondo, Manila; that the chattel mortgage
from holding the rights of the surety company, over the building superior to that of Isabel
was registered with the Register of Deeds of Manila on December 19, 1948;
Iya and excluding the building from the foreclosure prayed for by the latter is reversed
that on February 10, 1953, the mortgaged house was sold at public auction to
and appellant Isabel Iya's right to foreclose not only the land but also the building erected
satisfy the indebtedness to Claudia B. Vda. de Uy Kim, and the house was sold
thereon is hereby recognized, and the proceeds of the sale thereof at public auction (if
to Claudia B. Vda. de Uy Kim in the said foreclosure proceedings; that on March
the land has not yet been sold), shall be applied to the unsatisfied judgment in favor of
22, 1954, Claudia B. Vda. de Uy Kim sold the said house to Marcos Mangubat,
Isabel Iya. This decision however is without prejudice to any right that the Associated
and on March 1, 1956. Marcos Mangubat filed a complaint against Conrado S.
Insurance and Surety Co., Inc., may have against the spouses Adriano and Lucia Valino
David, Civil Case No. 29078, in the Court of First Instance of Manila, for the
on account of the mortgage of said building they executed in favor of said surety
collection of the loan of P2,000; that on March 24, 1956, the complaint was
company. Without pronouncement as to costs. It is so ordered.
amended to include the plaintiffs herein Salvador Piansay and Claudia B. Vda.
de Uy Kim as party defendants and praying that auction sale executed by the
10. Piansay v. David
Sheriff on February 10, 1953, and the deed of absolute sale executed by
Claudia B. Vda. de Uy Kim in favor of Salvador Piansay be annulled; that

decision was rendered in Civil Case No. 29078 ordering Conrado S. David to
pay the plaintiff the sum of P2,000, damages and attorney's fees, and
dismissing the complaint with respect to Claudia B. Vda. de Uy Kim, Leonardo
Uy Kim and Salvador Piansay; that upon appeal, the Court of Appeals affirmed
the decision but setting aside the award of damages in favor of Claudia B. Vda.
de Uy Kim; that in the execution of Civil Case No. 29078, which was affirmed by
the Court of Appeals in CA-G.R. No. 21797-R, the house, which had been
bought by Uy Kim at the foreclosure proceedings and sold by her to Salvador
Piansay, was levied upon at the instance of the defendant Marcos Mangubat;
that to prevent the sale at public auction of the house here in question, the
plaintiffs herein filed a petition forcertiorari and mandamus with preliminary
injunction in the Court of Appeals, CA-G.R. No. 28974-R, entitled Claudia B.
Vda. de Uy Kim and Salvador Piansay versus Hon. Judge Jesus Y. Perez, et al.;
that acting upon the said petition, the Court of Appeals in its order of April 28,
1961, denied the petition to lift or discharge the writ of execution.
Thereupon, or on July 31, 1961, Piansay and Mrs. Uy Kim, hereinafter referred to as the
plaintiffs, instituted the present action which was docketed as Civil Case No. 47664 of
the Court of First Instance of Manila, against David and Mangubat, hereinafter referred to
as the defendants. In their complaint, plaintiffs, after averring the foregoing facts, allege
that, in the proceedings for the execution of the decision in Civil Case No. 29078. David
demanded from Piansay the payment of rentals for the use and occupation of the house
aforementioned, which, Piansay claims, is his property, and that the defendants are
threatening to cause said house to be levied upon and sold at public auction in violation
of the alleged rights of the plaintiffs. Accordingly plaintiffs prayed that a writ of preliminary
injunction to restrain said levy and sale at public auction be issued and that, after
appropriate proceedings, judgment be rendered declaring that Piansay is the true and
lawful owner of said house sentencing the defendants to pay damages and making the
preliminary injunction permanent.
Mangubat moved to dismiss said complaint, upon the theory that the same is barred by
the principle of res adjudicata and that plaintiffs have no personality to bring this action or
to question the levy upon the house in question, because they have no interest therein.
After due hearing the lower court issued the order appealed from, granting said motion
and dismissing the complaint, with costs against the plaintiffs. A reconsideration of said
order having been denied, plaintiffs interposed the present appeal directly to this Court
only questions of law being raised in the appeal, namely: (1) applicability of the principle

of res adjudicata; and (2) validity of the chattel mortgage constituted in favor of Mrs. Uy
Kim.
With reference to the first question, it should be noted that in case CA-G.R. No. 21797-R,
the Court of Appeals affirmed the decision in Case No. 29078 of the Court of First
Instance of Manila stating:
In the case of Ladera, et al., vs. Hodges, et al. (CA-G.R. No. 8027-R,
promulgated Sept. 23, 1952) this Court, thru Justice J. B. L. Reyes, said, among
others:
Since it is a rule in our law that buildings and constructions are
regarded as mere accesories to the land (following the Roman
maxim omne quod solo inaedificatur solo credit) it is logical that said
accessories should partaked of the nature of the principal thing, which
is the land forming, as they do, but a single object (res) with it in
contemplation of law.
... While it is true that said document was correspondingly registered in
the Chattel Mortgage Register of Rizal, this Act produced no effect
whatsoever for where the interest conveyed is in the nature of real
property, the registration of the document in the registry of chattels is
merely a futile act. Thus the registration of the chattel mortgage of a
building of strong materials produced no effect as far as the building is
concerned (Leung Yee vs. Strong Machinery Co., 37 Phil. 644). Nor
can we give any consideration to that contention of the surety that it
has acquired ownership over the property in question by reason of the
sale conducted by the Provincial Sheriff of Rizal for as this court has
aptly pronounced:
A mortgage creditor who purchases real properties at an
extra-judicial foreclosure sale thereof by virtue of a chattel
mortgage constituted in his favor, which mortgage has been
declared null and void with respect to said real properties
acquires no right thereto by virtue of said sale. (De la Riva vs.
Ah Kee, 60 Phil. 899).

Thus, Mrs. Uy Kim had no right to foreclose the alleged chattel


mortgage constituted in her favor, because it was in reality a mere contract of
an unsecured loan. It follows that the Sheriff was not authorized to sell
the house as a result of the foreclosure of such chattel mortgage. And as Mrs.
Uy Kim could not have acquired the house when the Sheriff sold it at public
auction, she could not, in the same token, it validly to Salvador Piansay.
Conceding that the contract of sale between Mrs. Uy Kim and Salvador Piansay
was of no effect, we cannot nevertheless set it aside upon instance of
Mangubat because, as the court below opined, he is not a party thereto nor has
he any interest in the subject matter therein, as it was never sold or mortgaged
to him (Emphasis supplied);

prays that the order of respondent Judge denying the lifting and discharge of the writ of
execution be set aside and revoked."

In other words, in Civil Case No. 29078 of the Court of First Instance of Manila, Piansay
assailed the right of Mangubat to levy execution upon the house in question alleging that
the same belongs to him, he having bought it from Mrs. Uy Kim, who had acquired it at
the auction sale held in connection with the extrajudicial foreclosure of the chattel
mortgage constituted in her favor by David. This pretense was, however, overruled by
Judge Perez, who presided at said court, in its order of February 4, 1961, upon the
theory that the chattel mortgage and sale in favor of Mrs. Uy Kim had been annulled in
the original decision in said case, as affirmed by the Court of Appeals in CA-G.R. No.
21797-R. Regardless of whether this theory is accurate or not, the fact is that said order
that, thereafter, the records of the case were remanded to the Court of First Instance of became final and executory upon the denial of the petition for certiorari and mandamus,
Manila, which caused the corresponding writ of execution to be issued; that upon the to annul the same in CA-G.R. No. 28974-R of the Court of Appeals. Hence, plaintiffs are
request of Mangubat, the house in question was levied upon; that Piansay filed with the now barred from asserting that the aforementioned chattel mortgage and sale are valid.
trial court, presided over by Hon. Jesus Y. Perez, Judge, a motion to set aside said levy;
that this motion was denied by said court, in an order dated February 4, 1961, upon the At any rate, regardless of the validity of a contract constituting a chattel mortgage on a
house, as between the parties to said contract (Standard Oil Co. of N. Y. vs. Jaramillo, 44
following ground:
Phil. 632-633), the same cannot and does not bind third persons, who are not parties to
Considering that the decision rendered by the Court of Appeals in this case the aforementioned contract or their privies (Leung Yee vs. Strong Machinery Co., 37
when the same was elevated to said Court recognizes that defendant Claudia Phil. 644; Evangelista vs. Alto Surety, G.R. No. L-11139, April 23, 1958; Navarro vs.
B. de Uy Kim did not acquire the house of defendant Conrado S. David and can Pineda, G.R. No. L-18456, November 30, 1963). As a consequence, the sale of the
therefore be executed by the plaintiff to satisfy the judgment rendered against house in question in the proceedings for the extrajudicial foreclosure of said chattel
said defendant David in favor of the plaintiff. The mere fact that the dispositive mortgage, is null and void insofar as defendant Mangubat is concerned, and did not
part of the decision states that the complaint is dismissed with respect to confer upon Mrs. Uy Kim, as buyer in said sale, any dominical right in and to said house
defendants Claudia B. de Uy Kim, Leonardo Uy Kim and Salvador Piansay is of (De la Riva vs. Ah Yee, 60 Phil. 800), so that she could not have transmitted to her
no moment because the chattel mortgage executed by David in favor of Claudia assignee, plaintiff Piansay any such right as against defendant Mangubat. In short
B. de Uy Kim might not be annulled but it did not transmit any right from plaintiffs have no cause of action against the defendants herein.
defendant David to Claudia B. de Uy Kim. The house in question can therefore
be levied upon because it had remained the property of defendant WHEREFORE, the others appealed from are hereby affirmed, with costs against
plaintiffs Salvador Piansay and Claudia B. Vda. de Uy Kim. It is so ordered.
David (Emphasis supplied);
that a reconsideration of this order of February 4, 1961 having been denied by Judge
Perez, on February 25, 1961, plaintiffs instituted case CA-G.R. No. 28974-R of the Court
of Appeals, for a writ of certiorari andmandamus to annul said orders of Judge Perez and
to compel him to release said house from the aforementioned levy; and that on March 3,
1961, the Court of Appeals denied said petition for certiorari andmandamus "insofar as it

11. The Standard Oil Company of New York v. Jaramillo

The clauses in said document describing the property intended to be thus mortgage are
expressed in the following words:
Now, therefore, the mortgagor hereby conveys and transfer to the mortgage, by
way of mortgage, the following described personal property, situated in the City
of Manila, and now in possession of the mortgagor, to wit:
(1) All of the right, title, and interest of the mortgagor in and to the contract of
lease hereinabove referred to, and in and to the premises the subject of the said
lease;
(2) The building, property of the mortgagor, situated on the aforesaid leased
premises.
After said document had been duly acknowledge and delivered, the petitioner caused the
same to be presented to the respondent, Joaquin Jaramillo, as register of deeds of the
City of Manila, for the purpose of having the same recorded in the book of record of
chattel mortgages. Upon examination of the instrument, the respondent was of the
opinion that it was not a chattel mortgage, for the reason that the interest therein
mortgaged did not appear to be personal property, within the meaning of the Chattel
Mortgage Law, and registration was refused on this ground only.
We are of the opinion that the position taken by the respondent is untenable; and it is his
duty to accept the proper fee and place the instrument on record. The duties of a register
of deeds in respect to the registration of chattel mortgage are of a purely ministerial
This cause is before us upon demurrer interposed by the respondent, Joaquin Jaramillo, character; and no provision of law can be cited which confers upon him any judicial or
register of deeds of the City of Manila, to an original petition of the Standard Oil quasi-judicial power to determine the nature of any document of which registration is
Company of New York, seeking a peremptory mandamusto compel the respondent to sought as a chattel mortgage.
record in the proper register a document purporting to be a chattel mortgage executed in
the City of Manila by Gervasia de la Rosa, Vda. de Vera, in favor of the Standard Oil The original provisions touching this matter are contained in section 15 of the Chattel
Company of New York.
Mortgage Law (Act No. 1508), as amended by Act No. 2496; but these have been
transferred to section 198 of the Administrative Code, where they are now found. There
It appears from the petition that on November 27, 1922, Gervasia de la Rosa, Vda. de is nothing in any of these provisions conferring upon the register of deeds any authority
Vera, was the lessee of a parcel of land situated in the City of Manila and owner of the whatever in respect to the "qualification," as the term is used in Spanish law, of chattel
house of strong materials built thereon, upon which date she executed a document in the mortgage. His duties in respect to such instruments are ministerial only. The efficacy of
form of a chattel mortgage, purporting to convey to the petitioner by way of mortgage the act of recording a chattel mortgage consists in the fact that it operates as
both the leasehold interest in said lot and the building which stands thereon.
constructive notice of the existence of the contract, and the legal effects of the contract

must be discovered in the instrument itself in relation with the fact of notice. Registration
adds nothing to the instrument, considered as a source of title, and affects nobody's
rights except as a specifies of notice.
Articles 334 and 335 of the Civil Code supply no absolute criterion for discriminating
between real property and personal property for purpose of the application of the Chattel
Mortgage Law. Those articles state rules which, considered as a general doctrine, are
law in this jurisdiction; but it must not be forgotten that under given conditions property
may have character different from that imputed to it in said articles. It is undeniable that
the parties to a contract may by agreement treat as personal property that which by
nature would be real property; and it is a familiar phenomenon to see things classed as
real property for purposes of taxation which on general principle might be considered
personal property. Other situations are constantly arising, and from time to time are
presented to this court, in which the proper classification of one thing or another as real
or personal property may be said to be doubtful.

encumbered by a chattel mortgage. Of course, if the mortgaged property is real


instead of personal the chattel mortgage would no doubt be held ineffective as
against third parties, but this is a question to be determined by the courts of
justice and not by the register of deeds.
In Leung Yee vs. Frank L. Strong Machinery Co. and Williamson (37 Phil., 644), this
court held that where the interest conveyed is of the nature of real, property, the placing
of the document on record in the chattel mortgage register is a futile act; but that
decision is not decisive of the question now before us, which has reference to the
function of the register of deeds in placing the document on record.
In the light of what has been said it becomes unnecessary for us to pass upon the point
whether the interests conveyed in the instrument now in question are real or personal;
and we declare it to be the duty of the register of deeds to accept the estimate placed
upon the document by the petitioner and to register it, upon payment of the proper fee.

The point submitted to us in this case was determined on September 8, 1914, in an The demurrer is overruled; and unless within the period of five days from the date of the
administrative ruling promulgated by the Honorable James A. Ostrand, now a Justice of notification hereof, the respondent shall interpose a sufficient answer to the petition, the
this Court, but acting at that time in the capacity of Judge of the fourth branch of the writ of mandamus will be issued, as prayed, but without costs. So ordered.
Court of First Instance of the Ninth Judicial District, in the City of Manila; and little of
value can be here added to the observations contained in said ruling. We accordingly
quote therefrom as follows:
It is unnecessary here to determine whether or not the property described in the
document in question is real or personal; the discussion may be confined to the
point as to whether a register of deeds has authority to deny the registration of a
document purporting to be a chattel mortgage and executed in the manner and
form prescribed by the Chattel Mortgage Law.
Then, after quoting section 5 of the Chattel Mortgage Law (Act No. 1508), his Honor
continued:
Based principally upon the provisions of section quoted the Attorney-General of
the Philippine Islands, in an opinion dated August 11, 1909, held that a register
of deeds has no authority to pass upon the capacity of the parties to a chattel
mortgage which is presented to him for record. A fortiori a register of deeds can
have no authority to pass upon the character of the property sought to be

12. Board of Assessment Appeals v. Manila Electric Company

which carry high voltage current, are fastened to insulators attached on steel towers
constructed by respondent at intervals, from its hydro-electric plant in the province of
Laguna to the City of Manila. The respondent Meralco has constructed 40 of these steel
towers within Quezon City, on land belonging to it. A photograph of one of these steel
towers is attached to the petition for review, marked Annex A. Three steel towers were
inspected by the lower court and parties and the following were the descriptions given
there of by said court:
The first steel tower is located in South Tatalon, Espaa Extension, Quezon
City. The findings were as follows: the ground around one of the four posts was
excavated to a depth of about eight (8) feet, with an opening of about one (1)
meter in diameter, decreased to about a quarter of a meter as it we deeper until
it reached the bottom of the post; at the bottom of the post were two parallel
steel bars attached to the leg means of bolts; the tower proper was attached to
the leg three bolts; with two cross metals to prevent mobility; there was no
concrete foundation but there was adobe stone underneath; as the bottom of
the excavation was covered with water about three inches high, it could not be
determined with certainty to whether said adobe stone was placed purposely or
not, as the place abounds with this kind of stone; and the tower carried five high
voltage wires without cover or any insulating materials.

From the stipulation of facts and evidence adduced during the hearing, the following
appear:
On October 20, 1902, the Philippine Commission enacted Act No. 484 which authorized
the Municipal Board of Manila to grant a franchise to construct, maintain and operate an
electric street railway and electric light, heat and power system in the City of Manila and
its suburbs to the person or persons making the most favorable bid. Charles M. Swift
was awarded the said franchise on March 1903, the terms and conditions of which were
embodied in Ordinance No. 44 approved on March 24, 1903. Respondent Manila Electric
Co. (Meralco for short), became the transferee and owner of the franchise.
Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls,
Laguna and is transmitted to the City of Manila by means of electric transmission wires,
running from the province of Laguna to the said City. These electric transmission wires

The second tower inspected was located in Kamuning Road, K-F, Quezon City,
on land owned by the petitioner approximate more than one kilometer from the
first tower. As in the first tower, the ground around one of the four legs was
excavate from seven to eight (8) feet deep and one and a half (1-) meters
wide. There being very little water at the bottom, it was seen that there was no
concrete foundation, but there soft adobe beneath. The leg was likewise
provided with two parallel steel bars bolted to a square metal frame also bolted
to each corner. Like the first one, the second tower is made up of metal rods
joined together by means of bolts, so that by unscrewing the bolts, the tower
could be dismantled and reassembled.
The third tower examined is located along Kamias Road, Quezon City. As in the
first two towers given above, the ground around the two legs of the third tower
was excavated to a depth about two or three inches beyond the outside level of
the steel bar foundation. It was found that there was no concrete foundation.
Like the two previous ones, the bottom arrangement of the legs thereof were

found to be resting on soft adobe, which, probably due to high humidity, looks The word "pole" means "a long, comparatively slender usually cylindrical piece of wood
like mud or clay. It was also found that the square metal frame supporting the or timber, as typically the stem of a small tree stripped of its branches; also by extension,
legs were not attached to any material or foundation.
a similar typically cylindrical piece or object of metal or the like". The term also refers to
"an upright standard to the top of which something is affixed or by which something is
On November 15, 1955, petitioner City Assessor of Quezon City declared the aforesaid supported; as a dovecote set on a pole; telegraph poles; a tent pole; sometimes,
steel towers for real property tax under Tax declaration Nos. 31992 and 15549. After specifically a vessel's master (Webster's New International Dictionary 2nd Ed., p. 1907.)
denying respondent's petition to cancel these declarations, an appeal was taken by Along the streets, in the City of Manila, may be seen cylindrical metal poles, cubical
respondent to the Board of Assessment Appeals of Quezon City, which required concrete poles, and poles of the PLDT Co. which are made of two steel bars joined
respondent to pay the amount of P11,651.86 as real property tax on the said steel towers together by an interlacing metal rod. They are called "poles" notwithstanding the fact that
for the years 1952 to 1956. Respondent paid the amount under protest, and filed a they are no made of wood. It must be noted from paragraph 9, above quoted, that the
petition for review in the Court of Tax Appeals (CTA for short) which rendered a decision concept of the "poles" for which exemption is granted, is not determined by their place or
on December 29, 1958, ordering the cancellation of the said tax declarations and the location, nor by the character of the electric current it carries, nor the material or form of
petitioner City Treasurer of Quezon City to refund to the respondent the sum of which it is made, but the use to which they are dedicated. In accordance with the
P11,651.86. The motion for reconsideration having been denied, on April 22, 1959, the definitions, pole is not restricted to a long cylindrical piece of wood or metal, but includes
instant petition for review was filed.
"upright standards to the top of which something is affixed or by which something is
supported. As heretofore described, respondent's steel supports consists of a framework
In upholding the cause of respondents, the CTA held that: (1) the steel towers come of four steel bars or strips which are bound by steel cross-arms atop of which are crosswithin the term "poles" which are declared exempt from taxes under part II paragraph 9 arms supporting five high voltage transmission wires (See Annex A) and their sole
of respondent's franchise; (2) the steel towers are personal properties and are not function is to support or carry such wires.
subject to real property tax; and (3) the City Treasurer of Quezon City is held responsible
for the refund of the amount paid. These are assigned as errors by the petitioner in the The conclusion of the CTA that the steel supports in question are embraced in the term
brief.
"poles" is not a novelty. Several courts of last resort in the United States have called
these steel supports "steel towers", and they denominated these supports or towers, as
The tax exemption privilege of the petitioner is quoted hereunder:
electric poles. In their decisions the words "towers" and "poles" were used
interchangeably, and it is well understood in that jurisdiction that a transmission tower or
PAR 9. The grantee shall be liable to pay the same taxes upon its real estate, pole means the same thing.
buildings, plant (not including poles, wires, transformers, and insulators),
machinery and personal property as other persons are or may be hereafter In a proceeding to condemn land for the use of electric power wires, in which the law
required by law to pay ... Said percentage shall be due and payable at the time provided that wires shall be constructed upon suitable poles, this term was construed to
stated in paragraph nineteen of Part One hereof, ... and shall be in lieu of all mean either wood or metal poles and in view of the land being subject to overflow, and
taxes and assessments of whatsoever nature and by whatsoever authority the necessary carrying of numerous wires and the distance between poles, the statute
upon the privileges, earnings, income, franchise, and poles, wires, transformers, was interpreted to include towers or poles. (Stemmons and Dallas Light Co. (Tex) 212
and insulators of the grantee from which taxes and assessments the grantee is S.W. 222, 224; 32-A Words and Phrases, p. 365.)
hereby expressly exempted. (Par. 9, Part Two, Act No. 484 Respondent's
Franchise; emphasis supplied.)
The term "poles" was also used to denominate the steel supports or towers used by an
association used to convey its electric power furnished to subscribers and members,
constructed for the purpose of fastening high voltage and dangerous electric wires

alongside public highways. The steel supports or towers were made of iron or other
metals consisting of two pieces running from the ground up some thirty feet high, being
wider at the bottom than at the top, the said two metal pieces being connected with crisscross iron running from the bottom to the top, constructed like ladders and loaded with
high voltage electricity. In form and structure, they are like the steel towers in question.
(Salt River Valley Users' Ass'n v. Compton, 8 P. 2nd, 249-250.)

Granting for the purpose of argument that the steel supports or towers in question are
not embraced within the term poles, the logical question posited is whether they
constitute real properties, so that they can be subject to a real property tax. The tax law
does not provide for a definition of real property; but Article 415 of the Civil Code does,
by stating the following are immovable property:
(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;

The term "poles" was used to denote the steel towers of an electric company engaged in
the generation of hydro-electric power generated from its plant to the Tower of Oxford
and City of Waterbury. These steel towers are about 15 feet square at the base and
extended to a height of about 35 feet to a point, and are embedded in the cement
foundations sunk in the earth, the top of which extends above the surface of the soil in
the tower of Oxford, and to the towers are attached insulators, arms, and other
equipment capable of carrying wires for the transmission of electric power (Connecticut
Light and Power Co. v. Oxford, 101 Conn. 383, 126 Atl. p. 1).

xxx

xxx

xxx

(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;
xxx

xxx

xxx

(5) Machinery, receptacles, instruments or implements intended by the owner of


In a case, the defendant admitted that the structure on which a certain person met his
the tenement for an industry or works which may be carried in a building or on a
death was built for the purpose of supporting a transmission wire used for carrying highpiece of land, and which tends directly to meet the needs of the said industry or
tension electric power, but claimed that the steel towers on which it is carried were so
works;
large that their wire took their structure out of the definition of a pole line. It was held that
in defining the word pole, one should not be governed by the wire or material of the
xxx
xxx
xxx
support used, but was considering the danger from any elevated wire carrying electric
current, and that regardless of the size or material wire of its individual members, any
continuous series of structures intended and used solely or primarily for the purpose of The steel towers or supports in question, do not come within the objects mentioned in
supporting wires carrying electric currents is a pole line (Inspiration Consolidation Cooper paragraph 1, because they do not constitute buildings or constructions adhered to the
soil. They are not construction analogous to buildings nor adhering to the soil. As per
Co. v. Bryan 252 P. 1016).
description, given by the lower court, they are removable and merely attached to a
It is evident, therefore, that the word "poles", as used in Act No. 484 and incorporated in square metal frame by means of bolts, which when unscrewed could easily be
the petitioner's franchise, should not be given a restrictive and narrow interpretation, as dismantled and moved from place to place. They can not be included under paragraph 3,
to defeat the very object for which the franchise was granted. The poles as contemplated as they are not attached to an immovable in a fixed manner, and they can be separated
thereon, should be understood and taken as a part of the electric power system of the without breaking the material or causing deterioration upon the object to which they are
respondent Meralco, for the conveyance of electric current from the source thereof to its attached. Each of these steel towers or supports consists of steel bars or metal strips,
consumers. If the respondent would be required to employ "wooden poles", or "rounded joined together by means of bolts, which can be disassembled by unscrewing the bolts
poles" as it used to do fifty years back, then one should admit that the Philippines is one and reassembled by screwing the same. These steel towers or supports do not also fall
century behind the age of space. It should also be conceded by now that steel towers, under paragraph 5, for they are not machineries, receptacles, instruments or implements,
like the ones in question, for obvious reasons, can better effectuate the purpose for and even if they were, they are not intended for industry or works on the land. Petitioner
which the respondent's franchise was granted.

is not engaged in an industry or works in the land in which the steel supports or towers Court of First Instance of Pampanga, attached and sold to the defendant Emiliano J.
Valdez the sugar cane planted by the plaintiff and his tenants on seven parcels of land
are constructed.
described in the complaint in the third paragraph of the first cause of action; that within
It is finally contended that the CTA erred in ordering the City Treasurer of Quezon City to one year from the date of the attachment and sale the plaintiff offered to redeem said
sugar cane and tendered to the defendant Valdez the amount sufficient to cover the price
refund the sum of P11,651.86, despite the fact that Quezon City is not a party to the
paid by the latter, the interest thereon and any assessments or taxes which he may have
case. It is argued that as the City Treasurer is not the real party in interest, but Quezon paid thereon after the purchase, and the interest corresponding thereto and that Valdez
City, which was not a party to the suit, notwithstanding its capacity to sue and be sued, refused to accept the money and to return the sugar cane to the plaintiff.
he should not be ordered to effect the refund. This question has not been raised in the
court below, and, therefore, it cannot be properly raised for the first time on appeal. The As a second cause of action, the plaintiff alleged that the defendant Emiliano J. Valdez
herein petitioner is indulging in legal technicalities and niceties which do not help him was attempting to harvest the palay planted in four of the seven parcels mentioned in the
any; for factually, it was he (City Treasurer) whom had insisted that respondent herein first cause of action; that he had harvested and taken possession of the palay in one of
said seven parcels and in another parcel described in the second cause of action,
pay the real estate taxes, which respondent paid under protest. Having acted in his
amounting to 300 cavans; and that all of said palay belonged to the plaintiff.
official capacity as City Treasurer of Quezon City, he would surely know what to do,
under the circumstances.
Plaintiff prayed that a writ of preliminary injunction be issued against the defendant
Emiliano J. Valdez his attorneys and agents, restraining them (1) from distributing him in
IN VIEW HEREOF, the decision appealed from is hereby affirmed, with costs against the the possession of the parcels of land described in the complaint; (2) from taking
possession of, or harvesting the sugar cane in question; and (3) from taking possession,
petitioners.
or harvesting the palay in said parcels of land. Plaintiff also prayed that a judgment be
rendered in his favor and against the defendants ordering them to consent to the
13. SIBAL vs. VALDEZ 50 PHILS 512
redemption of the sugar cane in question, and that the defendant Valdez be condemned
to pay to the plaintiff the sum of P1,056 the value of palay harvested by him in the two
LEON SIBAL, plaintiff-appellant,
parcels above-mentioned ,with interest and costs.
vs.
EMILIANO J. VALDEZ ET AL., defendants.
EMILIANO J. VALDEZ, appellee.
J. E. Blanco for appellant.
Felix B. Bautista and Santos and Benitez for appellee.

On December 27, 1924, the court, after hearing both parties and upon approval of the
bond for P6,000 filed by the plaintiff, issued the writ of preliminary injunction prayed for in
the complaint.
The defendant Emiliano J. Valdez, in his amended answer, denied generally and
specifically each and every allegation of the complaint and step up the following
defenses:

JOHNSON, J.:

(a) That the sugar cane in question had the nature of personal property and was
not, therefore, subject to redemption;

The action was commenced in the Court of First Instance of the Province of Tarlac on the
14th day of December 1924. The facts are about as conflicting as it is possible for facts
to be, in the trial causes.

(b) That he was the owner of parcels 1, 2 and 7 described in the first cause of
action of the complaint;

As a first cause of action the plaintiff alleged that the defendant Vitaliano Mamawal,
deputy sheriff of the Province of Tarlac, by virtue of a writ of execution issued by the

(c) That he was the owner of the palay in parcels 1, 2 and 7; and

(d) That he never attempted to harvest the palay in parcels 4 and 5.


The defendant Emiliano J. Valdez by way of counterclaim, alleged that by reason of the
preliminary injunction he was unable to gather the sugar cane, sugar-cane shoots
(puntas de cana dulce) palay in said parcels of land, representing a loss to him of
P8,375.20 and that, in addition thereto, he suffered damages amounting to P3,458.56.
He prayed, for a judgment (1) absolving him from all liability under the complaint; (2)
declaring him to be the absolute owner of the sugar cane in question and of the palay in
parcels 1, 2 and 7; and (3) ordering the plaintiff to pay to him the sum of P11,833.76,
representing the value of the sugar cane and palay in question, including damages.

(3) In holding that Valdez, by reason of the preliminary injunction failed to


realized P6,757.40 from the sugar cane and P1,435.68 from sugar-cane shoots
(puntas de cana dulce);
(4) In holding that, for failure of plaintiff to gather the sugar cane on time, the
defendant was unable to raise palay on the land, which would have netted him
the sum of P600; and.
(5) In condemning the plaintiff and his sureties to pay to the defendant the sum
of P9,439.08.

Upon the issues thus presented by the pleadings the cause was brought on for trial. After It appears from the record:
hearing the evidence, and on April 28, 1926, the Honorable Cayetano Lukban, judge,
rendered a judgment against the plaintiff and in favor of the defendants
(1) That on May 11, 1923, the deputy sheriff of the Province of Tarlac, by virtue
of writ of execution in civil case No. 20203 of the Court of First Instance of
(1) Holding that the sugar cane in question was personal property and, as such,
Manila (Macondray & Co., Inc. vs. Leon Sibal),levied an attachment on eight
was not subject to redemption;
parcels of land belonging to said Leon Sibal, situated in the Province of Tarlac,
designated in the second of attachment as parcels 1, 2, 3, 4, 5, 6, 7 and 8
(2) Absolving the defendants from all liability under the complaint; and
(Exhibit B, Exhibit 2-A).
(3) Condemning the plaintiff and his sureties Cenon de la Cruz, Juan Sangalang
and Marcos Sibal to jointly and severally pay to the defendant Emiliano J.
Valdez the sum of P9,439.08 as follows:

(2) That on July 30, 1923, Macondray & Co., Inc., bought said eight parcels of
land, at the auction held by the sheriff of the Province of Tarlac, for the sum to
P4,273.93, having paid for the said parcels separately as follows (Exhibit C, and
2-A):

(a) P6,757.40, the value of the sugar cane;


(b) 1,435.68, the value of the sugar-cane shoots;

Parcel

(c) 646.00, the value of palay harvested by plaintiff;

1 .....................................................................

P1.00

2 .....................................................................

2,000.00

3 .....................................................................

120.93

4 .....................................................................

1,000.00

5 .....................................................................

1.00

6 .....................................................................

1.00

7 with the house thereon ..........................

150.00

(d) 600.00, the value of 150 cavans of palay which the defendant was
not able to raise by reason of the injunction, at P4 cavan. 9,439.08
From that judgment the plaintiff appealed and in his assignments of
error contends that the lower court erred: (1) In holding that the sugar
cane in question was personal property and, therefore, not subject to
redemption;
(2) In holding that parcels 1 and 2 of the complaint belonged to Valdez, as well
as parcels 7 and 8, and that the palay therein was planted by Valdez;

8 .....................................................................

1,000.00

========== (6) That on the same date, June 25, 1924, Macondray & Co. sold and conveyed
to Emilio J. Valdez for P2,579.97 all of its rights and interest in the eight parcels
4,273.93
of land acquired by it at public auction held by the deputy sheriff of Tarlac in
connection with civil case No. 20203 of the Court of First Instance of Manila, as
stated above. Said amount represented the unpaid balance of the redemption
(3) That within one year from the sale of said parcel of land, and on the 24th
price of said eight parcels, after payment by Leon Sibal of P2,000 on
day of September, 1923, the judgment debtor, Leon Sibal, paid P2,000 to
September 24, 1923, fro the account of the redemption price, as stated above.
Macondray & Co., Inc., for the account of the redemption price of said parcels of
(Exhibit C and 2).
land, without specifying the particular parcels to which said amount was to
applied. The redemption price said eight parcels was reduced, by virtue of said
The foregoing statement of facts shows:
transaction, to P2,579.97 including interest (Exhibit C and 2).
The record further shows:
(1) That on April 29, 1924, the defendant Vitaliano Mamawal, deputy sheriff of
the Province of Tarlac, by virtue of a writ of execution in civil case No. 1301 of
the Province of Pampanga (Emiliano J. Valdez vs. Leon Sibal 1. the same
parties in the present case), attached the personal property of said Leon Sibal
located in Tarlac, among which was included the sugar cane now in question in
the seven parcels of land described in the complaint (Exhibit A).
(2) That on May 9 and 10, 1924, said deputy sheriff sold at public auction said
personal properties of Leon Sibal, including the sugar cane in question to Emilio
J. Valdez, who paid therefor the sum of P1,550, of which P600 was for the
sugar cane (Exhibit A).
(3) That on April 29,1924, said deputy sheriff, by virtue of said writ of execution,
also attached the real property of said Leon Sibal in Tarlac, including all of his
rights, interest and participation therein, which real property consisted of eleven
parcels of land and a house and camarin situated in one of said parcels (Exhibit
A).
(4) That on June 25, 1924, eight of said eleven parcels, including the house and
the camarin, were bought by Emilio J. Valdez at the auction held by the sheriff
for the sum of P12,200. Said eight parcels were designated in the certificate of
sale as parcels 1, 3, 4, 5, 6, 7, 10 and 11. The house and camarin were situated
on parcel 7 (Exhibit A).
(5) That the remaining three parcels, indicated in the certificate of the sheriff as
parcels 2, 12, and 13, were released from the attachment by virtue of claims
presented by Agustin Cuyugan and Domiciano Tizon (Exhibit A).

(1) The Emilio J. Valdez bought the sugar cane in question, located in the seven
parcels of land described in the first cause of action of the complaint at public
auction on May 9 and 10, 1924, for P600.
(2) That on July 30, 1923, Macondray & Co. became the owner of eight parcels
of land situated in the Province of Tarlac belonging to Leon Sibal and that on
September 24, 1923, Leon Sibal paid to Macondray & Co. P2,000 for the
account of the redemption price of said parcels.
(3) That on June 25, 1924, Emilio J. Valdez acquired from Macondray & Co. all
of its rights and interest in the said eight parcels of land.
(4) That on June 25, 1924, Emilio J. Valdez also acquired all of the rights and
interest which Leon Sibal had or might have had on said eight parcels by virtue
of the P2,000 paid by the latter to Macondray.
(5) That Emilio J. Valdez became the absolute owner of said eight parcels of
land.
The first question raised by the appeal is, whether the sugar cane in question is personal
or real property. It is contended that sugar cane comes under the classification of real
property as "ungathered products" in paragraph 2 of article 334 of the Civil Code. Said
paragraph 2 of article 334 enumerates as real property the following: Trees, plants, and
ungathered products, while they are annexed to the land or form an integral part of any
immovable property." That article, however, has received in recent years an interpretation
by the Tribunal Supremo de Espaa, which holds that, under certain conditions, growing
crops may be considered as personal property. (Decision of March 18, 1904, vol. 97,
Civil Jurisprudence of Spain.)

Manresa, the eminent commentator of the Spanish Civil Code, in discussing section 334 crops and the fruits of trees not gathered, and trees before they are cut down, are
of the Civil Code, in view of the recent decisions of the supreme Court of Spain, admits likewise immovable, and are considered as part of the land to which they are attached."
that growing crops are sometimes considered and treated as personal property. He says:
The Supreme Court of Louisiana having occasion to interpret that provision, held that in
No creemos, sin embargo, que esto excluya la excepcionque muchos autores some cases "standing crops" may be considered and dealt with as personal property. In
hacen tocante a la venta de toda cosecha o de parte de ella cuando aun no the case of Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme Court
esta cogida (cosa frecuente con la uvay y la naranja), y a la de lenas, said: "True, by article 465 of the Civil Code it is provided that 'standing crops and the
considerando ambas como muebles. El Tribunal Supremo, en sentencia de 18 fruits of trees not gathered and trees before they are cut down . . . are considered as part
de marzo de 1904, al entender sobre un contrato de arrendamiento de un of the land to which they are attached, but the immovability provided for is only one in
predio rustico, resuelve que su terminacion por desahucio no extingue los abstracto and without reference to rights on or to the crop acquired by others than the
derechos del arrendario, para recolectar o percibir los frutos correspondientes owners of the property to which the crop is attached. . . . The existence of a right on the
al ao agricola, dentro del que nacieron aquellos derechos, cuando el arrendor growing crop is a mobilization by anticipation, a gathering as it were in advance,
ha percibido a su vez el importe de la renta integra correspondiente, aun rendering the crop movable quoad the right acquired therein. Our jurisprudence
cuando lo haya sido por precepto legal durante el curso del juicio, fundandose recognizes the possible mobilization of the growing crop." (Citizens' Bank vs. Wiltz, 31
para ello, no solo en que de otra suerte se daria al desahucio un alcance que La. Ann., 244; Porche vs. Bodin, 28 La., Ann., 761; Sandel vs. Douglass, 27 La. Ann.,
no tiene, sino en que, y esto es lo interesante a nuestro proposito, la 629; Lewis vs. Klotz, 39 La. Ann., 267.)
consideracion de inmuebles que el articulo 334 del Codigo Civil atribuge a los
frutos pendientes, no les priva del caracter de productos pertenecientes, como "It is true," as the Supreme Court of Louisiana said in the case of Porche vs. Bodin (28
tales, a quienes a ellos tenga derecho, Ilegado el momento de su recoleccion.
La. An., 761) that "article 465 of the Revised Code says that standing crops are
considered as immovable and as part of the land to which they are attached, and article
xxx
xxx
xxx
466 declares that the fruits of an immovable gathered or produced while it is under
seizure are considered as making part thereof, and incurred to the benefit of the person
Mas actualmente y por virtud de la nueva edicion de la Ley Hipotecaria, making the seizure. But the evident meaning of these articles, is where the crops belong
publicada en 16 de diciembre de 1909, con las reformas introducidas por la de to the owner of the plantation they form part of the immovable, and where it is seized, the
21 de abril anterior, la hipoteca, salvo pacto expreso que disponga lo contrario, fruits gathered or produced inure to the benefit of the seizing creditor.
y cualquiera que sea la naturaleza y forma de la obligacion que garantice, no
comprende los frutos cualquiera que sea la situacion en que se encuentre. (3
A crop raised on leased premises in no sense forms part of the immovable. It
Manresa, 5. edicion, pags. 22, 23.)
belongs to the lessee, and may be sold by him, whether it be gathered or not,
and it may be sold by his judgment creditors. If it necessarily forms part of the
leased premises the result would be that it could not be sold under execution
From the foregoing it appears (1) that, under Spanish authorities, pending fruits and
separate and apart from the land. If a lessee obtain supplies to make his crop,
ungathered products may be sold and transferred as personal property; (2) that the
the factor's lien would not attach to the crop as a separate thing belonging to his
Supreme Court of Spain, in a case of ejectment of a lessee of an agricultural land, held
debtor, but the land belonging to the lessor would be affected with the recorded
that the lessee was entitled to gather the products corresponding to the agricultural year,
privilege. The law cannot be construed so as to result in such absurd
because said fruits did not go with the land but belonged separately to the lessee; and
consequences.
(3) that under the Spanish Mortgage Law of 1909, as amended, the mortgage of a piece
of land does not include the fruits and products existing thereon, unless the contract
expressly provides otherwise.
In the case of Citizen's Bank vs. Wiltz (31 La. Ann., 244)the court said:
An examination of the decisions of the Supreme Court of Louisiana may give us some
light on the question which we are discussing. Article 465 of the Civil Code of Louisiana,
which corresponds to paragraph 2 of article 334 of our Civil Code, provides: "Standing

If the crop quoad the pledge thereof under the act of 1874 was an immovable, it
would be destructive of the very objects of the act, it would render the pledge of
the crop objects of the act, it would render the pledge of the crop impossible, for
if the crop was an inseparable part of the realty possession of the latter would

be necessary to that of the former; but such is not the case. True, by article 465
C. C. it is provided that "standing crops and the fruits of trees not gathered and
trees before they are cut down are likewise immovable and are considered as
part of the land to which they are attached;" but the immovability provided for is
only one in abstracto and without reference to rights on or to the crop acquired
by other than the owners of the property to which the crop was attached. The
immovability of a growing crop is in the order of things temporary, for the crop
passes from the state of a growing to that of a gathered one, from an
immovable to a movable. The existence of a right on the growing crop is a
mobilization by anticipation, a gathering as it were in advance, rendering the
crop movable quoad the right acquired thereon. The provision of our Code is
identical with the Napoleon Code 520, and we may therefore obtain light by an
examination of the jurisprudence of France.

It is contended on the part of the appellee that paragraph 2 of article 334 of the Civil
Code has been modified by section 450 of the Code of Civil Procedure as well as by Act
No. 1508, the Chattel Mortgage Law. Said section 450 enumerates the property of a
judgment debtor which may be subjected to execution. The pertinent portion of said
section reads as follows: "All goods, chattels, moneys, and other property, both real and
personal, * * * shall be liable to execution. Said section 450 and most of the other
sections of the Code of Civil Procedure relating to the execution of judgment were taken
from the Code of Civil Procedure of California. The Supreme Court of California, under
section 688 of the Code of Civil Procedure of that state (Pomeroy, p. 424) has held,
without variation, that growing crops were personal property and subject to execution.

Act No. 1508, the Chattel Mortgage Law, fully recognized that growing crops are
personal property. Section 2 of said Act provides: "All personal property shall be subject
to mortgage, agreeably to the provisions of this Act, and a mortgage executed in
The rule above announced, not only by the Tribunal Supremo de Espaa but by the pursuance thereof shall be termed a chattel mortgage." Section 7 in part provides: "If
Supreme Court of Louisiana, is followed in practically every state of the Union.
growing crops be mortgaged the mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and protect the crop while growing.
From an examination of the reports and codes of the State of California and other states
we find that the settle doctrine followed in said states in connection with the attachment It is clear from the foregoing provisions that Act No. 1508 was enacted on the
of property and execution of judgment is, that growing crops raised by yearly labor and assumption that "growing crops" are personal property. This consideration tends to
cultivation are considered personal property. (6 Corpuz Juris, p. 197; 17 Corpus Juris, p. support the conclusion hereinbefore stated, that paragraph 2 of article 334 of the Civil
379; 23 Corpus Juris, p. 329: Raventas vs. Green, 57 Cal., 254; Norris vs. Watson, 55 Code has been modified by section 450 of Act No. 190 and by Act No. 1508 in the sense
Am. Dec., 161; Whipple vs. Foot, 3 Am. Dec., 442; 1 Benjamin on Sales, sec. 126; that "ungathered products" as mentioned in said article of the Civil Code have the nature
McKenzie vs. Lampley, 31 Ala., 526; Crine vs. Tifts and Co., 65 Ga., 644; Gillitt vs. Truax, of personal property. In other words, the phrase "personal property" should be
27 Minn., 528; Preston vs. Ryan, 45 Mich., 174; Freeman on Execution, vol. 1, p. 438; understood to include "ungathered products."
Drake on Attachment, sec. 249; Mechem on Sales, sec. 200 and 763.)
At common law, and generally in the United States, all annual crops which are
Mr. Mechem says that a valid sale may be made of a thing, which though not yet actually
raised by yearly manurance and labor, and essentially owe their annual
in existence, is reasonably certain to come into existence as the natural increment or
existence to cultivation by man, . may be levied on as personal property." (23 C.
usual incident of something already in existence, and then belonging to the vendor, and
J., p. 329.) On this question Freeman, in his treatise on the Law of Executions,
then title will vest in the buyer the moment the thing comes into existence.
says: "Crops, whether growing or standing in the field ready to be harvested,
(Emerson vs. European Railway Co., 67 Me., 387; Cutting vs. Packers Exchange, 21
are, when produced by annual cultivation, no part of the realty. They are,
Am. St. Rep., 63.) Things of this nature are said to have a potential existence. A man
therefore, liable to voluntary transfer as chattels. It is equally well settled that
may sell property of which he is potentially and not actually possessed. He may make a
they may be seized and sold under execution. (Freeman on Executions, vol. p.
valid sale of the wine that a vineyard is expected to produce; or the gain a field may grow
438.)
in a given time; or the milk a cow may yield during the coming year; or the wool that shall
thereafter grow upon sheep; or what may be taken at the next cast of a fisherman's net; We may, therefore, conclude that paragraph 2 of article 334 of the Civil Code has been
or fruits to grow; or young animals not yet in existence; or the good will of a trade and the modified by section 450 of the Code of Civil Procedure and by Act No. 1508, in the sense
like. The thing sold, however, must be specific and identified. They must be also owned that, for the purpose of attachment and execution, and for the purposes of the Chattel
at the time by the vendor. (Hull vs. Hull, 48 Conn., 250 [40 Am. Rep., 165].)
Mortgage Law, "ungathered products" have the nature of personal property. The lower
court, therefore, committed no error in holding that the sugar cane in question was
personal property and, as such, was not subject to redemption.

All the other assignments of error made by the appellant, as above stated, relate to
questions of fact only. Before entering upon a discussion of said assignments of error, we
deem it opportune to take special notice of the failure of the plaintiff to appear at the trial
during the presentation of evidence by the defendant. His absence from the trial and his
failure to cross-examine the defendant have lent considerable weight to the evidence
then presented for the defense.
Coming not to the ownership of parcels 1 and 2 described in the first cause of action of
the complaint, the plaintiff made a futile attempt to show that said two parcels belonged
to Agustin Cuyugan and were the identical parcel 2 which was excluded from the
attachment and sale of real property of Sibal to Valdez on June 25, 1924, as stated
above. A comparison of the description of parcel 2 in the certificate of sale by the sheriff
(Exhibit A) and the description of parcels 1 and 2 of the complaint will readily show that
they are not the same.

Parcels No. 4. Terreno palayero, ubicado en el barrio de Culubasa,Bamban,


Tarlac, I. F. de 145,000 metros cuadrados de superficie, lindante al Norte con
Road of the barrio of Culubasa that goes to Concepcion; al Este con Juan
Dizon; al Sur con Lucio Mao y Canuto Sibal y al Oeste con Esteban Lazatin,
su valor amillarado asciende a la suma de P2,990. Tax No. 2856.
As will be noticed, there is hardly any relation between parcels 1 and 2 of the complaint
and parcel 4 (Exhibit 2 and B) and parcel 3 (Exhibit A). But, inasmuch as the plaintiff did
not care to appear at the trial when the defendant offered his evidence, we are inclined to
give more weight to the evidence adduced by him that to the evidence adduced by the
plaintiff, with respect to the ownership of parcels 1 and 2 of the compliant. We, therefore,
conclude that parcels 1 and 2 of the complaint belong to the defendant, having acquired
the same from Macondray & Co. on June 25, 1924, and from the plaintiff Leon Sibal on
the same date.

The description of the parcels in the complaint is as follows:

It appears, however, that the plaintiff planted the palay in said parcels and harvested
therefrom 190 cavans. There being no evidence of bad faith on his part, he is therefore
1. La caa dulce sembrada por los inquilinos del ejecutado Leon Sibal 1. en entitled to one-half of the crop, or 95 cavans. He should therefore be condemned to pay
una parcela de terreno de la pertenencia del citado ejecutado, situada en to the defendant for 95 cavans only, at P3.40 a cavan, or the sum of P323, and not for
Libutad, Culubasa, Bamban, Tarlac, de unas dos hectareas poco mas o menos the total of 190 cavans as held by the lower court.
de superficie.
As to the ownership of parcel 7 of the complaint, the evidence shows that said parcel
2. La caa dulce sembrada por el inquilino del ejecutado Leon Sibal 1., corresponds to parcel 1 of the deed of sale of Macondray & Co, to Valdez (Exhibit B and
Ilamado Alejandro Policarpio, en una parcela de terreno de la pertenencia del 2), and to parcel 4 in the certificate of sale to Valdez of real property belonging to Sibal,
ejecutado, situada en Dalayap, Culubasa, Bamban, Tarlac de unas dos executed by the sheriff as above stated (Exhibit A). Valdez is therefore the absolute
hectareas de superficie poco mas o menos." The description of parcel 2 given owner of said parcel, having acquired the interest of both Macondray and Sibal in said
parcel.
in the certificate of sale (Exhibit A) is as follows:
2a. Terreno palayero situado en Culubasa, Bamban, Tarlac, de 177,090 metros
cuadrados de superficie, linda al N. con Canuto Sibal, Esteban Lazatin and
Alejandro Dayrit; al E. con Francisco Dizon, Felipe Mau and others; al S. con
Alejandro Dayrit, Isidro Santos and Melecio Mau; y al O. con Alejandro Dayrit
and Paulino Vergara. Tax No. 2854, vador amillarado P4,200 pesos.

On the other hand the evidence for the defendant purported to show that parcels 1 and 2
of the complaint were included among the parcels bought by Valdez from Macondray on
June 25, 1924, and corresponded to parcel 4 in the deed of sale (Exhibit B and 2), and
were also included among the parcels bought by Valdez at the auction of the real
property of Leon Sibal on June 25, 1924, and corresponded to parcel 3 in the certificate
of sale made by the sheriff (Exhibit A). The description of parcel 4 (Exhibit 2) and parcel
3 (Exhibit A) is as follows:

With reference to the parcel of land in Pacalcal, Tarlac, described in paragraph 3 of the
second cause of action, it appears from the testimony of the plaintiff himself that said
parcel corresponds to parcel 8 of the deed of sale of Macondray to Valdez (Exhibit B and
2) and to parcel 10 in the deed of sale executed by the sheriff in favor of Valdez (Exhibit
A). Valdez is therefore the absolute owner of said parcel, having acquired the interest of
both Macondray and Sibal therein.
In this connection the following facts are worthy of mention:
Execution in favor of Macondray & Co., May 11, 1923. Eight parcels of land were
attached under said execution. Said parcels of land were sold to Macondray & Co. on the
30th day of July, 1923. Rice paid P4,273.93. On September 24, 1923, Leon Sibal paid to
Macondray & Co. P2,000 on the redemption of said parcels of land. (See Exhibits B and
C ).

Attachment, April 29, 1924, in favor of Valdez. Personal property of Sibal was attached,
including the sugar cane in question. (Exhibit A) The said personal property so attached,
sold at public auction May 9 and 10, 1924. April 29, 1924, the real property was attached
under the execution in favor of Valdez (Exhibit A). June 25, 1924, said real property was
sold and purchased by Valdez (Exhibit A).

1,220.40

for the sugar cane shoots;

323.00

for the palay harvested by plaintiff in parcels 1 and 2;

600.00

for the palay which defendant could have raised.

June 25, 1924, Macondray & Co. sold all of the land which they had purchased at public
auction on the 30th day of July, 1923, to Valdez.

8,900.80
============

As to the loss of the defendant in sugar cane by reason of the injunction, the evidence In all other respects, the judgment appealed from is hereby affirmed, with costs. So
shows that the sugar cane in question covered an area of 22 hectares and 60 ares ordered.
(Exhibits 8, 8-b and 8-c); that said area would have yielded an average crop of 1039
picos and 60 cates; that one-half of the quantity, or 519 picos and 80 cates would have
corresponded to the defendant, as owner; that during the season the sugar was selling
at P13 a pico (Exhibit 5 and 5-A). Therefore, the defendant, as owner, would have netted
FACTS: Plaintiff, Sibal alleged that the defendant Vitaliano Mamawal, deputy
P 6,757.40 from the sugar cane in question. The evidence also shows that the defendant
sheriff of the Province of Tarlac, by virtue of a writ of execution issued by the
could have taken from the sugar cane 1,017,000 sugar-cane shoots (puntas de cana)
Court of FirstInstance of Pampanga, attached and sold to the defendant
and not 1,170,000 as computed by the lower court. During the season the shoots were
Emiliano J. Valdez thesugar cane planted by the plaintiff and his tenants on
selling at P1.20 a thousand (Exhibits 6 and 7). The defendant therefore would have
seven parcels of land and thatwithin 1 year from the date of the attachment and
netted P1,220.40 from sugar-cane shoots and not P1,435.68 as allowed by the lower
sale the plaintiff ordered toredeem said sugar cane and tendered to Valdez the
court.
amount sufficient to cover theprice paid by the latter, the interest thereon and
any assessments or taxes which hemay have paid thereon after the purchase,
As to the palay harvested by the plaintiff in parcels 1 and 2 of the complaint, amounting
and the interest corresponding thereto.However, Valdez refused to accept the
to 190 cavans, one-half of said quantity should belong to the plaintiff, as stated above,
money and to return the sugar cane to theplaintiff. The Court rendered
and the other half to the defendant. The court erred in awarding the whole crop to the
judgment in favor of the defendant holding that thesugar cane in question was
defendant. The plaintiff should therefore pay the defendant for 95 cavans only, at P3.40 a
personal property and, as such, was not subject toredemption; among others.
cavan, or P323 instead of P646 as allowed by the lower court.
The evidence also shows that the defendant was prevented by the acts of the plaintiff
from cultivating about 10 hectares of the land involved in the litigation. He expected to
have raised about 600 cavans of palay, 300 cavans of which would have corresponded
to him as owner. The lower court has wisely reduced his share to 150 cavans only. At P4
a cavan, the palay would have netted him P600.
In view of the foregoing, the judgment appealed from is hereby modified. The plaintiff and
his sureties Cenon de la Cruz, Juan Sangalang and Marcos Sibal are hereby ordered to
pay to the defendant jointly and severally the sum of P8,900.80, instead of P9,439.08
allowed by the lower court, as follows:
P6,757.40

for the sugar cane;

ISSUE:
Whether or not the sugar cane is to be classified as personal property.
RULING:
Yes, sugar cane is a personal property. Under the facts of the record
notwithstanding the provisions of par. 2 of Article 334, of the Civil Code that
growing sugar cane is considered personal property and not real property and is
subject to attachment and sale. Chattel Mortgage law provides that all personal
property shal lbe subject to mortgage. At common law all annual crops which
are raised by yearly manurance and labor and especially owe their existence to
cultivation may be leviedas personal property. Although standing crops and the
fruits of the trees not gathered and trees before they are cut down are

considered as part of the land to which they are attached. The existence of a
right on the growing crop is mobilization by anticipation, a gathering as it were in
advance, rendering the crop movable and theright acquired therein. Our
jurisprudence recognizes the possible mobilization of the growing crop. Hence,
the sugar cane in question is considered personal property.

WHEREFORE, In all other respects the judgment appealed from is hereby


affirmed, with costs. So ordered.