DAVAO SAW MILL vs. APRONIANO G. CASTILLO and DAVAO LIGHT & POWER CO., INC. G.R. No.

L40411 August 7, 1935

CASE SUMMARY:
Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the Philippine
Islands. However, the land upon which the business was conducted belonged to another person. On the
land the sawmill company erected a building which housed the machinery used by it. Some of the
implements thus used were clearly personal property, the conflict concerning machines which were
placed and mounted on foundations of cement. In the contract of lease between the sawmill company and
the owner of the land there appeared the following provision: That on the expiration of the period agreed
upon, all the improvements and buildings introduced and erected by the party of the second part shall
pass to the exclusive ownership of the lessor without any obligation on its part to pay any amount for said
improvements and buildings; which do not include the machineries and accessories in the improvements.
In another action wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao, Saw, Mill
Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that action against the
defendant; a writ of execution issued thereon, and the properties now in question were levied upon as
personalty by the sheriff. No third party claim was filed for such properties at the time of the sales thereof
as is borne out by the record made by the plaintiff herein
It must be noted also that on number of occasion, Davao Sawmill treated the machinery as personal
property by executing chattel mortgages in favor of third persons. One of such is the appellee by
assignment from the original mortgages.
The lower court rendered decision in favor of the defendants herein. Hence, this instant appeal.
b. ISSUE:
Whether or not the machineries and equipments were personal in nature.
c. LAW APPLICABLE:
Art. 415 (5) of the NCC, regarding IMMOVABLE PROPERTY; which states that:
5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for
an industry or works which may be carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works;
d. DECISION OF THE CASE:
Yes. The Supreme Court affirmed the decision of the lower court.
Machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner
of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a
temporary right, unless such person acted as the agent of the owner.
e. OPINION
I agree with the ruling of the Supreme Court. For me, it is true that a machinery, which is movable
in its nature, becomes immobilized when placed in a plant by the owner of the property or plant. It is
untenable to say that it is placed by a tenant, a usufructuary, or any person having only a temporary right,
unless such person acted as the agent of the owner.
Board of Assessment Appeals v. MERALCO.

January 31, 1964

a. CASE SUMMARY:
On 20 October 1902, the Philippine Commission enacted Act 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 44 approved on 24 March 1903. Meralco became the
transferee and owner of the franchise. Meralcos 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 which carry high voltage current, are fastened to insulators attached on steel towers constructed by
respondent at intervals, from its hydroelectric plant in the province of Laguna to the City of Manila.
Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it.
On November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to real
property tax. After the denial of MERALCO's petition to cancel these declarations, an appeal was taken to
the QC Board of Assessment Appeals, which required respondent to pay P11,651.86 as real property tax
on the said steel towers for the years 1952 to 1956.
MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals
(CTA) which rendered a decision ordering the cancellation of the said tax declarations and the refunding
to MERALCO by the QC City Treasurer of P11,651.86.
b. ISSUE:
Whether or not the steel towers of an electric company constitute real property for the purposes of real
property tax
c. LAW APPLICABLE:
Art. 415 of the NCC classifies the following as immovable property:
(1) Lands, buildings, roads and constructions of all kinds adhered to the soil;
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated
therefrom without breaking the material or deterioration of the object;
(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an
industry ot works which may be carried on in a building or on a piece of land, and which tend directly to
meet the needs of the said industry or works;

d. DECISION OF THE CASE:

According to the Supreme Court, the steel towers of an electric company dont constitute real property for
the purposes of real property tax because steel towers are not immovable property under paragraph 1, 3
and 5 of Article 415.
The steel towers or supports do not come within the objects mentioned in paragraph 1, because they do
not constitute buildings or constructions adhered to the soil. They are not constructions analogous to
buildings nor adhering to the soil. Rather, they are removable and merely attached to a square metal
frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to
place. Furthermore, they cannot be included under paragraph 3, as they are not attached to an
immovable in a fixed manner, and they can be separated without breaking the material or causing
deterioration upon the object to which they are attached. Each of these steel towers or supports consists
of steel bars or metal strips, joined together by means of bolts, which can be disassembled by unscrewing

the bolts and reassembled by screwing the same. These steel towers or supports do not also fall under
paragraph 5, for they are not machineries or receptacles, instruments or implements, and even if they
were, they are not intended for industry or works on the land. The Supreme Court affirmed the decision
appealed from, with costs against the petitioners.
e. OPINION
I agree. They are not real property in this case. The steel towers of MERALCO should be
considered personal property. The reason for that is because the steel towers are neither buildings nor
constructions adhered to the soil; are not attached to an immovable in a fixed manner in which they can
be separated without breaking the material or deterioration of the object; and that are not machineries,
receptacles or instruments, and even if they are, they are not intended for an industry to be carried on in
the premises.

Laurel vs. Garcia

Salvador H. Laurel vs. Ramon Garcia, et. Al.
G. R. No. 92013. July 25, 1990.
a. CASE SUMMARY:
The subject property in this case is one of the 4 properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan, the Roppongi property. The said
property was acquired from the Japanese government through Reparations Contract No. 300. It consists
of the land and building for the Chancery of the Philippine Embassy. As intended, it became the site of the
Philippine Embassy until the latter was transferred to Nampeidai when the Roppongi building needed
major repairs. President Aquino created a committee to study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan. The President issued EO 296 entitling non-Filipino
citizens or entities to avail of separations' capital goods and services in the event of sale, lease or
disposition.
b. ISSUE:
Whether or not the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property.
c. LAW APPLICABLE:
Art. 1409. The following contracts are inexistent and void from the beginning:
(4) Those whose object is outside the commerce of men;
d. DECISION OF THE CASE:
The Roppongi property was acquired together with the other properties through reparation agreements.
They were assigned to the government sector and that the Roppongi property was specifically designated
under the agreement to house the Philippine embassy. It is of public dominion unless it is convincingly
shown that the property has become patrimonial. The respondents have failed to do so.
It is not for the President to convey valuable real property of the government on his or her own sole will.
Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires
executive and legislative concurrence.
As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated.
Its ownership is a special collective ownership for general use and payment, in application to the
satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as
the juridical person but the citizens; it is intended for the common and public welfare and cannot be the
object of appropriation.
A property continues to be part of the public domain, not available for private appropriation or ownership
until there is a formal declaration on the part of the government to withdraw it from being such. The fact
that the Roppongi site has not been used for a long time for actual Embassy service doesnt automatically
convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from
public use.
e. OPINION
I concur. The Roppongi property is a property of public dominion, which is outside the commerce
of man. The Roppongi property was acquired together with the other properties through reparation
agreements. They were assigned to the government sector and that the Roppongi property was

specifically designated under the agreement to house the Philippine embassy. It is of public dominion and
it is unconvincingly shown that the property has become patrimonial. Therefore, the Chief Executive, nor
her officers and agents, have the authority and jurisdiction, to sell the Roppongi property because it is a
public property, and it is beyond their prerogative to do that.

BELEN UY TAYAG and JESUS B. TAYAG, petitioners, v ROSARIO AND JOAQUIN

YUSECO, respondents.
Oct. 24, 1955
CASE SUMMARY:
During the 1930s, Maria Lim offered two lots to Atty. Joaquin Yuseco and his
wife, Rosario, to show her appreciation for the professional services rendered by the
latter to the former. So, the Yusecos built a house and an annex for servants
quarters on the two lots which are improvements. The lots are 11-A and 11-B, block
2251 of the Government Subdivision known as Hacienda de San Lazaro. Atty. Yuseco
claims that the two lots were donated to him although the certificates of title
already mentioned remained in the name of Maria.
At that time, there was an executed lease of contract to the effect that the
lease was to run for a period of five years, with a rental of P120 a year; that the
owner of the lots was to pay all the land taxes. Failure to pay the rent when due
would be sufficient cause for the rescission of the contract. This agreement was
noted on the certificates of title.
A few days before her death, Maria sold the two lots to her daughter, Belen
Uy, with her husband, Jesus B. Tayag for and in consideration of the sum of P4,000.
The new owners in 1946 asked the Yusecos to remove their houses from the land
because the couple planned to build their own house on the two lots, or else pay a
monthly rent of P120. Because of failure to pay, the couple filed an action of
ejectment in the Municipal Court of Manila. The court ruled in favor of the plaintiffs
(Belen Uy and Jesus Tayag.) However, an appeal was rendered in favor of the
defendants in the Court of First Instance, making the plaintiffs entitled to the
properties but they must pay P50000, the amount of two lots. Again, an appeal was
made by the plaintiffs, stating that the Yusecos were builders in good faith and
because of that, they may not be compelled to remove their house unless they get
paid.
ISSUE:
Whether or not Yusecos are entitled to possession because they are builders
in good faith.
LAW APPLICABLE:
Art. 361 of the Old Civil Code
DECISION OF THE CASE:

No. They are not entitled. The court ruled that Art. 361 of the Old Civil Code
must prevail over the Art. 448 of the New Civil Code because the construction in
good faith occurred during the 1930 and that the New Civil Code did not go into
effect until 1950. Therefore, they declared that the respondents to be possessors in
good faith, giving an opportunity to the plaintiffs to refund or pay the value of the
land under Art. 361 of the OCC.
e. OPINION
I agree because the case happened during the 1930 and Art. 448 is not
applicable because it took effect only on 1950.