PROPERTY CASE DIGESTS (ATTY.

AMPIL) 1st week

1. LOPEZ v OROSA, JR., PLAZA THEATRE, INC.
The Building is an immovable by itself, separate and distinct
from the land from which it is attached.
FACTS:
Orosa invited Lopez to invest with him in building a theatre.
Lopez supplied wood for the construction of the said theatre.
The materials totaled 62k but Orosa was only able to pay 20k
thus leaving a balance of almost 42k. Later on respondents
acquired a bank loan of 30k, wherein Luzon Surety Company
as their surety and the land and buildings as mortgages.
Petitioner sued to collect the unpaid materials and was able
to get a judgment against the respondents making them
jointly liable to pay the remaining amount. Also, he was able
to obtain a materialmans lien on the building of the theatre.
The stocks amounting to 42k shall be sold in public auction in
case the respondents default. Petitioner wasnt happy
because he also wanted a lien on the land, urging that the
judgment lien should include it since the building and the
land are inseparable.
ISSUE: W/N the building and the land are inseperable and
W/N petitioner can obtain a lien on the land as well?
RULING:
NO to both! The contention that the lien executed in favor of
the furnisher of the materials used for the construction,
repair or refection of a building is also extended to land on
which the construction was made is without merit, because
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 (in the CC) of what may constitute
real properties could mean only one thing- that a building
is by itself an immovable property.
The preference to unregistered lien is only with respect to
the real estate upon which the refection or work was made.
The materialmans lien could be charged only to the
building for which the credit was made or which received
the benefit of refection.
2. ASSOCIATED INS. & SURETY CO., INC. v. IYA, et al.
A building is an immovable property irrespective of where or
not said structure and the land on which it is adhered to
belong to the same owner. (same as the previous case)
FACTS:
Adriano Valino and Lucia A. Valino owns a house of strong
materials. Filed a bond fr 11k subscribed by the Associated
Insurance and Surety Co., Inc. and as counter-guaranty
therefr, the spouses Valino executed an alleged chattel
mortgage on the aforementioned house in favor of the surety
company.
The parcel of land on which the house is erected was still
registered in the name of the Philippine Realty Corporation
but was able to obtained the same from them after full
payment of the purchase price. Valinos acquired another loan
from Iya for 12k, executing an REM over the lot and house.
However they werent able to pay off their other loan so the
chattel mortgage was foreclosed. The surety company was
awarded the land as the highest bidder in the auction. The
surety company later on discovered that the land was subject
to a REM. The surety company then requested that the house

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and lot be excluded from the REM. Iya, in her answer, said
that she had a real right over the property and that the
chattel mortgage on which the foreclosure was based should
be declared null and void for non-compliance with the form
required by law. CA allowed only the foreclosure of the REM
only up to the land and they awarded the structure to the
surety company saying that the house is a personal property
and may be subject to chattel mortgage.
ISSUE: Which of the mortgages should have preference?
RULING:
Lopez v Orosa was used as a precedent here saying that the
buildings an immovable itself, separate and distinct from the
land. A building is an immovable property irrespective of
where or not said structure and the land on which it is
adhered to belong to the same owner.
Only personal property is subject to a chattel mortgage and
since the structure in this case is an immovable, it cannot
subject to a chattel mortgage. Therefore the chattel
mortgage and the sale on which it was based should be
declared null and void.
Iya was given the superior right not only to the land but also
to the structure to foreclose them in an auction.
3. BICERRA V. TENEZA
When a house is situated on anothers land, it is still
considered immovable property within the meaning of
Article 415. However, once demolished, it is not longer
considered immovable.
FACTS:
The Bicerras are supposedly the owners of the house (PhP
20,000) built on a lot owned by them in Lagangilang, Abra;
which the Tenezas forcibly demolished in January 1957,
claiming to the owners thereof. The materials of the house
were placed in the custody of the barrio lieutenant. The
Bicerras filed a complaint claiming actual damages of P200,
moral and consequential damages amounting to P600, and the
costs. The CFI Abra dismissed the complaint claiming that the
action was within the exclusive (original) jurisdiction of the
Justice of the Peace Court of Lagangilang, Abra.
The Supreme Court affirmed the order appealed. Having been
admitted in forma pauperis, no costs were adjudged.
ISSUE: w/n the house is immovable property even if it is on
the land of another
RULING: Yes
House is immovable property even if situated on land
belonging to a different owner; Exception, when
demolished
A house is classified as immovable property by reason of its
adherence to the soil on which it is built (Article 415,
paragraph 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.
5. STANDARD OIL COMPANY V JARAMILLO
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PROPERTY CASE DIGESTS (ATTY. AMPIL) 1st week

The Power of the Registry of Deeds is Ministerial, and The
absolute criterion to determine between real and personal
property is NOT supplied by the civil code. Parties may
agree what to treat as personal property and what to treat
as real property.
FACTS
On November 27, 1922, Gervasia de la Rosa was the lessee of
a parcel of land situated in the City of Manila and owner of
the house of really tough materials built thereon. She
executed that fine day a document in the form of a chattel
mortgage, purporting to convey to Standard Oil Company of
New York (by way of mortgage) both the leasehold interest in
said lot and the building.
After said document had been duly acknowledged and
delivered, Standard Oil presented it to 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, Jaramillo
opined that it was not 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.
Later this confusion was brought to the Supreme Court upon
demurrer by Joaquin Jaramillo, register of deeds of the City
of Manila, to an original petition of the Standard Oil Company
of New York, demanding a mandamus to compel the
respondent to 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 Company of New York.
The Supreme Court overruled the demurrer, and ordered that
unless Jaramillo interposes a sufficient answer to the petition
for mandamus by Standard Oil within 5 days of notification,
the writ would be issued as prayed, but without costs.
ISSUE:
w/n the Registry of Deeds can determine the nature of
property to be registered.
w/n the Registry of Deeds has powers beyond Ministerial
discretion.
1.Jaramillo, register of deeds, does not have judicial or
quasi-judicial power to determine nature of document
registered as chattel mortgage
Section 198 of the Administrative Code, originally of Section
15 of the Chattel Mortgage Law (Act 1508 as amended by Act
2496), does not confer upon the register of deeds any
authority whatever in respect to the "qualification," as the
term is used in Spanish law, of chattel mortgages. His duties
in respect to such instruments are ministerial only. The
efficacy of the act of recording a chattel mortgage consists in
the fact that it operates as 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

| Bedural Bleza Cajucom Cimagala Delos Santos Imperial Noel Plazo Sia 2D 2012|

Article 334 and 335 of the Civil Code supply no absolute

criterion for discriminating between real property and
personal property for purposes 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 be 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 the Supreme
Court, in which the proper classification of one thing or
another as real or personal property may be said to be
doubtful.]
6. PUNZALAN V LACSAMANA
Buildings are always treated as immovable or real property
under the Code even if it was dealt with separately from
the land upon which it stood
FACTS:
Some land belonging to Antonio Punzalan was foreclosed by
the Philippine National Bank Tarlac, Branch in failure of the
former to pay the mortgaged fee amounting to P10 grand
Since PNB was the highest bidder, the land went to PNB.
Sometime 1974, while the property was still in the possession
of Punzalan, Punzalan constructed a warehouse on the said
land by virtue of the permit secured from the Municipal
Mayor of Bamban, Tarlac. Subsequently, in 1978, a contract
of sale was entered into by PNB and Remedios Vda. De
Lacsamana, whom in lieu of the said sale secured a title
over the property involving the warehouse allegedly owned
and constructed by the plaintiff.
Punzalan filed a suit for annulment of the Deed of Sale with
damages against PNB and Lacsamana before the Court of First
Instance of Rizal, Branch 31, impugning the validity of the
sale of the building, requesting the same to be declared null
and void and that damages in the total sum of P23, 200 more
or less be awarded to him.
Respondent Lacsamana in his answer averred the affirmative
defense of lack of cause of action contending that she was a
purchaser for value, while, PNB filed a Motion to Dismiss on
the ground of improper venue, invoking that the building
was a real property under Article 415 of the Civil Code, and
therefore, Section 4 (a) of the Rules of Court should apply.
Punzalan filed a Motion for Reconsideration asserting that the
action he filed is limited to the annulment of sale and that, it
does not involved ownership of or title to property but denied
by the court for lack of merit. A motion for pre-trial was also
set by Punzalan but was also denied by the court invoking
that the case was already dismissed.
Hence, a petition for certiorari was filed by the petitioner.

2.Article 334 and 335 of the Civil Code does not supply
absolute criterion on distinction between real and personal
property for purpose of the application of the Chattel
Mortgage Law

ISSUE: w/n or not the judgment rendered by the court is

proper.
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PROPERTY CASE DIGESTS (ATTY. AMPIL) 1st week

HELD:
While it is true that the petitioner does not directly seek the
recovery of the 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 petitioners
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 objective and nature of the case,
which is to recover said property. It is a real action.
Respondent Court did not err in dismissing the case on the
ground of improper venue under Section 12 Rule 4 which was
timely raised under Section 1 Rule 16 of the Rules of Court.
Personal Observation: The venue was improperly laid by the
petitioner in the case at bar. Such ground was sufficient to
render dismissal of the case, as the same is one of the
grounds provided for under Rule 16 (c) of the Rules of Court.
The Denial of Motion to Dismiss rendered by the court in
the instant case is appealable. If such denial constitute grave
abuse of discretion on the part of the court , Punzalan may
file either Prohibition or Certiorari under Rule 65 of the Rules
of Court
7. PRUDENTIAL BANK v PANIS
A REM can be constituted on the building erected on the
land belonging to another.
FACTS:
Spouses Magcale secured a loan with Prudential Bank. To
further secure said loan, the spouses executed a REM over the
residential building, with a right to occupy the lot. The REM
also included information about the Sales Patent applied for
by the spouses for the lot to which the building stood. The
spouses got another loan, which was secured by another REM
over the same properties.
The Sec. of Agriculture issued a Miscellaneous Sales Patent
over the lot which was then mortgaged to the bank in favor
of the Macales.
The spouses defaulted on both loans. Thus, the REM was
extrajudicially foreclosed, and sold in a public auction.
The RTC held that the REM was null and void.
ISSUE: Whether or not a REM can be constituted on the
building erected on a lot belonging to another?
HELD: Yes.
The fact that the spouses executed the REM over the building
before executing the second REM over the land proved that
the spouses intended for the building to be an immovable
separate and distinct from the land on which it is built.
9. NAVARRO v PINEDA
With regard to third persons who are not parties to the
contract, a house is still considered as an immovable
property.
FACTS:

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Pineda and his mother secured a loan from Navarro. In line

with this, they executed a REM over the land owned by his
mother, and a Chattel Mortgage over the residential house.
They defaulted on the payment of the loan, but they were
able to ask for an extension. However, they still defaulted,
which caused Navarro to file for a foreclosure of the
mortgages.
ISSUE:
Whether or not the house should be considered as a movable
or immovable property?
HELD:
The stipulation of the parties still govern. Thus, with regard
to a building erected on a lot belonging to another, this may
be the subject matter of a chattel mortgage if the parties so
stipulate. However, with regard to third persons who are not
parties to the contract, the house is still considered as an
immovable property.
9. TUMALAD V. VICENCIO
Although a building is an immovable; the parties to a contract
may by agreement treat as personal property that which by
nature is a real property however they are estopped from
subsequently claiming otherwise.
FACTS:
Alberta Vicencio and Emiliano Simeon received a loan of P4,
800 from Gavino and Generosa Tumalad. To guaranty said
loan, Vicencio executed a chattel mortgage in favor of
Tumalad over their house of strong materials which stood on
a land which was rented from the Madrigal & Company, Inc.
When Vicencio defaulted in paying, the house was
extrajudicially foreclosed, pursuant to their contract. It was
sold to Tumalad and they instituted a Civil case in the
Municipal Court of Manila to have Vicencio vacate the house
and pay rent.
The MTC decided in favor of Tumalad ordering Vicencio to
vacate the house and pay rent until they have completely
vacated the house. Vicencio is questioning the legality of the
chattel mortgage on the ground that 1) the signature on it
was obtained thru fraud and 2) the mortgage is a house of
strong materials which is an immovable therefore can only be
the subject of a REM. On appeal, the CFI found in favor of
Tumalad, and since the Vicencio failed to deposit the rent
ordered, it issued a writ of execution, however the house was
already demolished pursuant to an order of the court in an
ejectment suit against Vicencio for non-payment of rentals.
Thus the case at bar.
Issue: W/N the chattel mortgage is void since its subject is an
immovable
HELD: NO
Although a building is by itself an immovable property,
parties to a contract may treat as personal property that
which by nature would be real property and it would be valid
and good only insofar as the contracting parties are
concerned. By principle of estoppel, the owner declaring his
house to be a chattel may no longer subsequently claim
otherwise.
When Vicencio executed the Chattel Mortgage, it specifically
provides that the mortgagor cedes, sells and transfers by way
of Chattel mortgage. They intended to treat it as chattel
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PROPERTY CASE DIGESTS (ATTY. AMPIL) 1st week

therefore are now estopped from claiming otherwise. Also
the house stood on rented land which was held in previous
jurisprudence to be personalty since it was placed on the
land by one who had only temporary right over the property
thus it does not become immobilized by attachment.
[Vicencio though was not made to pay rent since the action
was instituted during the period of redemption therefore
Vicencio still had a right to remain in possession of the
property]
10. MAKATI LEASING AND FINANCE CORP. V. WEAREVER
TEXTILE MILLS, INC.
Parties to a contract may by agreement treat as personal
property that which by nature is a real property, as long as
no interest of 3rd party would be prejudiced.
FACTS:
To obtain financial accommodations from Makati Leasing,
Wearever Textile discounted and assigned several receivables
under a Receivable Purchase Agreement with Makati Leasing.
To secure the collection of receivables, it executed a chattel
mortgage over several raw materials and a machinery Artos
Aero Dryer Stentering Range (Dryer).
Wearever defaulted thus the properties mortgaged were
extrajudicially foreclosed. The sheriff, after the restraining
order was lifted, was able to enter the premises of Wearever
and removed the drive motor of the Dryer. The CA reversed
the order of the CFI, ordering the return of the drive motor
since it cannot be the subject of a replevin suit being an
immovable bolted to the ground. Thus the case at bar.
ISSUE: W/N the dryer is an immovable property
HELD: NO
The SC relied on its ruling in Tumalad v. Vicencio, that if a
house of strong materials can be the subject of a Chattel
Mortgage as long as the parties to the contract agree and no
innocent 3rd party will be prejudiced then moreso that a
machinery may treated as a movable since it is movable by
nature and becomes immobilized only by destination. And
treating it as a chattel by way of a Chattel Mortgage,
Wearever is estopped from claiming otherwise.
11. TUMALAD V. VICENCIO, 41 SCRA 143
FACTS:
Vicencio executed a chattel mortgage in favor of Tumalad
over their house of strong materials to guarantee a loan.
Vicencio defaulted, the mortgage was foreclosed and
auctioned with Tumalad as the highest bidder. Tumalad
subsequently filed a complaint asking Vicencio to vacate the
premises.
MTC granted Tumalads complaint and ordered Vicencio to
vacate and deliver possession of the premises. On appeal in
the CFI, the court ordered execution of the MTC order to
vacate but could not enforce delivery of possession since the
house has been demolished. Back rentals were also
adjudicated to Tumalad. CA certified the appeal to SC.
ISSUE: W/N MTC had jurisdiction? W/N award of back rentals
is valid?

| Bedural Bleza Cajucom Cimagala Delos Santos Imperial Noel Plazo Sia 2D 2012|

HELD: Yes. MTC had jurisdiction. Although a house of strong

materials is by nature and immovable, the parties may
stipulate that it be treated as a movable by subjecting it to a
chattel mortgage. The doctrine of estoppel, having treated
the subject house as personalty, precludes the defendant
from assailing its validity.
No. 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 plaintiffsappellees' right to possess was not yet born at the filing of
the complaint, there could be no violation or breach thereof.
12. MAKATI LEASING v. WEAREVER, 122 SCRA 296
FACTS: In order to obtain financial accommodations from
herein petitioner Makati Leasing and Finance Corporation, the
private respondent Wearever Textile Mills, Inc., discounted
and assigned several receivables with the former under a
Receivable Purchase Agreement. To secure the collection of
the receivables assigned, private respondent executed a
Chattel Mortgage over certain raw materials inventory as well
as a machinery described as an Artos Aero Dryer Stentering
Range. Upon default, Makati Leasing foreclosed on the
mortgage and was issued a writ of replevin. The sheriff
enforcing the seizure order, repaired to the premises of
private respondent and removed the main drive motor of the
subject machinery.
ISSUES: W/N the machinery in suit is real or personal
property?
HELD:
Personal property. Examining the records of the instant case,
We find no logical justification to exclude the rule out, as the
appellate court did, the present case from the application of
the abovequoted pronouncement. If a house of strong
materials, like what was involved in the above Tumalad case,
may be considered as personal property for purposes of
executing a chattel mortgage thereon as long as the parties
to the contract so agree and no innocent third party will be
prejudiced thereby, there is absolutely no reason why a
machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be
likewise treated as such. This is really because one who has
so agreed is estopped from denying the existence of the
chattel mortgage.
18. CALTEX V. CENTRAL BOARD
BARE FACTS
This case is concerned with tax on machinery and equipment
installed by Caltex in its gas stations located on leased land.
The machines were loaned by Caltex to gas station operators
under a lease agreement. It was stipulated in the contract
that the operators, upon demand, shall return to Caltex the
machines and equipment in good condition. The city assessor
characterized said machines as taxable realty.
ISSUE
Whether said machines and equipments are realty property
and thus subject to realty tax.
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| Bedural Bleza Cajucom Cimagala Delos Santos Imperial Noel Plazo Sia 2D 2012|

HELD
Said equipment and machinery, as appurtenances to the gas
station building owned by Caltex and which are necessary o
the operation of the gas station and are thus taxable as
realty. This ruling is different from the one in Davao Saw Mill
since here, the machinery were permanently affixed by
Caltex to its gas stations. The tenement was owned by
Caltex. Differentiate this also from the Manila Electric Case
where the materials were only attached by bolts and could be
moved from place to place.
19. MANILA ELECTRIC CO. V. CENTRAL BOARD
BARE FACTS
This is about the imposition of realty tax on two oil storage
tanks installed by Manila Electric on land which it leased from
Caltex. The tanks, as alleged, merely sit on its foundation.
City board alleges that the area where the two tanks are
located is enclosed with earthen dikes with electric steel
poles on top.
ISSUE
Whether the tanks are realty or personalty.
HELD
For purposes of taxation, the term "real property" may
include things which should generally be regarded as personal
property. The other Manila Electric case is not in point since
in that case the steel towers were regarded as poles and
under its franchise, Meralco's poles were exempt from
taxation. Moreover, the steel towers were not attached to
any land, or building. They were removable from their metal
frames. Although the two tanks here were not embedded in
the land, they were installed with some degree of
permanence. Moreover, they are useful and necessary to the
industry.