Lopez v.

Orosa
LOPEZ V. OROSA AND PLAZA THEATREG.R.
Nos. L-10817-18 February 28, 1958
FACTS:
-Petitioner Lopez was engaged in doing business
under the trade name Lopez-Castelo Sawmill.
HELD:
-The material man’s lien could be charged only to the
building for which the credit was made or which
received the benefit of refection, the lower court was
right in, holding at the interest of the mortgagee over
the land is superior and cannot be made subject to
the material man's lien.

Orosa, a resident of the same province as Lopez,
invited the latter to make an investment in the
theatre business. Lopez declined to invest but agreed
to supply the lumber necessary for the construction
of the proposed theatre. They had an oral agreement
that Orosa would be personally liable for any account
that the said construction might incur and that
payment would be on demand and not cash on
delivery basis.
Lopez delivered the which was used for construction
amounting to P62,255.85. He was paid only
P20,848.50, leaving a balance of P41,771.35.
The land on which the building was erected
previously owned by Orosa, was later on acquired by
the corporation.
-Generally, real estate connotes the land and the
building constructed thereon, it is obvious that the
inclusion of the building in the enumeration of what
may constitute real properties could only mean one
thing—that a building is by itself an immovable
property.
-In 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.
-The law gives preference to unregistered
refectionary credits only with respect to the real
estate upon which the refectionary or work was
made.

. As Lopez was pressing Orosa for payment, the
latter and president of the corporation promised to
obtain a bank loan by mortgaging the properties of
the Plaza Theatre., out of which the unpaid balance
would be satisfied. But unknown to Lopez, the
corporation already obtained a loan with Luzon
Surety Company as surety, and the corporation in
turn executed a mortgage on the land and building in
favor of the said company as counter-security.
Due to the persistent demands of Lopez, Orosa
executed a “deed of assignment” over his shares of
stock in the corporation.
As it remained unsettled, Lopez filed a case against
Orosa and Plaza theatre praying that they be
sentenced to pay him jointly and severally of the
unpaid balance; and in case defendants fail to pay,
the land and building owned by the corporation be
sold in public auction with the proceeds be applied to
the balance; or the shares of stock be sold in public
auction.
- The lien so created attaches merely to the
immovable property for the construction or repair of
which the obligation was incurred. Therefore, the lien
in favor of appellant for the unpaid value of the
lumber used in the construction of the building
attaches only to said structure and to no other
property of the obligors.
YINLU BICOL MINING CORPORATION v.
TRANS-ASIA OIL AND ENERGY DEVELOPMENT
CORPORATION
G.R. No. 207942, 12 January 2015, FIRST
DIVISON (Bersamin, J.)
Rights pertaining to mining patents issued pursuant
to the Philippine Bill of 1902 and
existing prior to November 15, 1935 are vested rights
that cannot be impaired.
An area located in Barrio Larap, Municipality of Jose
Panganiban,

The lower court held that defendants were jointly
liable for the unpaid balance and Lopez thus acquired
the material man’s lien over the construction. The
lien was merely confined to the building and did not
extend to the on which the construction was made.
Lopez tried to secure a modification of the decision,
but was denied.
ISSUES:
Whether the material man’s lien for the value of the
materials used in the construction of the building
attaches to said structure alone and doesn’t extend
to the land on which the building is adhered to.
Whether the lower court and CA erred in not
providing that the material mans liens is superior to
the mortgage executed in favor of surety company
not only on the building but also on the land.
Camarines Norte is the subject of the present
controversy. In 1997, Trans-Asia filed
an application for the approval of Mineral Production
Sharing Agreement (MPSA) over the area in that
Regional Office of the DENR, through the Mines and
Geosciences Bureau (MGB), in Daraga, Albay. The
application, which was amended in 1999, was
granted on July 28, 2007 under MPSA No. 252-2007-
V, by which Trans-Asia was given the exclusive right
to explore, develop and utilize the mineral deposits in
the portion of the mineral lands.
On August 31, 2007, Yinlu Bicol Mining Corporation
(Yinlu) informed the DENR by letter that it had
acquired the mining patents of Philippine Iron Mines,
Inc. (PIMI) from Manila Banking Corporation (MBC) /
Banco De Oro (BDO) by way of a deed of absolute
sale from PIMI which held mining patent over said
area as early as 1930. However, Trans-asia
countered this claim by alleging that Yinlu failed to
register the patent. DENR rejected this claim and
stated that the patents were validly transferred and
were now owned by Yinlu. The areas covered
occupied more than half of the MPSA area of Trans-
Asia.
Trans-Asia sought the assistance of the MGB
Regional Office V in resolving the issues over the
mine. It was at that point that Trans-Asia learned
that the registration of its MPSA had been put on
hold because of Yinlu’s request to
register the deed of absolute sale in its favor.
ISSUE:
Are the mining patents held by Yinlu valid?
RULING:
Yes. Yinlu’s mining patents constituted vested rights
that could not be disregarded. The decision of the OP
was actually unassailable in point of law and
history. The lands and minerals covered by Yinlu’s
mining patents are private properties. The
Government, whether through the DENR or the MGB,
could not alienate or dispose of the lands or mineral
through the MPSA granted to Trans-Asia or any other
person or entity. Yinlu had the exclusive right to
explore, develop and utilize the minerals therein, and
it could legally transfer or assign such exclusive right.
The Court uphold the rulings of the DENR Secretary
and the OP to exclude the disputed areas that had
been established to belong exclusively to Yinlu as
registered owner to be taken out of the coverage of
Trans-Asia’s MPSA. Mining rights acquired under the
Philippine Bill of 1902 and prior to the effectivity of
the 1935 Constitution were vested rights that could
not be impaired even by the Government. Indeed,
the mining patents of Yinlu were issued pursuant to
the Philippine Bill of 1902 and were subsisting prior
to the effectivity of the 1935 Constitution.
Consequently, Yinlu and its predecessors-in-interest
had acquired vested rights in the disputed mineral
lands that could not and should not be impaired even
in light of their past failure to comply with the
requirement of registration and annual work
obligations.
STAR TWO (SPV-AMC), INC., V PAPER CITY
CORPORATION OF THE PHILIPPINES
FACTS
For review is a Petition for Review on Certiorari filed
by Rizal Commercial Banking Corporation now
substituted by Star Two (SPV-AMC), Inc.
 Respondent Paper City is a domestic
corporation engaged in the manufacture of paper
products. Paper City applied for and was granted
loans and credit accommodations in peso and dollar
denominations by RCBC secured by 4 Deeds of
Continuing Chattel Mortgages on its machineries and
equipments found inside its paper plants.
 However, a unilateral Cancellation of Deed of
Continuing Chattel Mortgage on Inventory of
Merchandise/Stocks-in-Trade was executed by RCBC
over the merchandise and stocks-in-trade covered by
the continuing chattel mortgages.
 RCBC, Metrobank and Union Bank (creditor
banks with RCBC instituted as the trustee bank)
entered into a Mortgage Trust Indenture (MTI) with
Paper City. In the said MTI, Paper City acquired an
additional P170, 000,000.00 from the creditor banks
in addition to the previous loan from RCBC
amounting to P110, 000,000.00.
 The old loan of P110,000,000.00 was partly
secured by various parcels of land situated in
Valenzuela City. The new loan obligation
of P170,000,000.00 would be secured by the same
five (5) Deeds of Real Estate Mortgage and additional
real and personal properties described in an annex to
MTI, Annex "B" which covered the machineries and
equipments of Paper City.
 The MTI was later amended to increase the
contributions of the RCBC and Union Bank. As
a consequence, they executed a Deed of
Amendment to MTI but still included as part
of the mortgaged properties by way of a first
mortgage the various machineries and
equipments located in and bolted to and/or
forming part of buildings.
 A Second Supplemental Indenture to the MTI
was executed to increase the amount of the
loan secured against the existing properties
composed of land, building, machineries and
equipments and inventories described in
Annexes "A" and "B."
 Finally, a Third Supplemental Indenture to the
MTI was executed to increase the existing
loan obligation with an additional security
composed of a newly constructed two-storey
building and other improvements,
machineries and equipments located in the
existing plant site.
 Paper City was able to comply with its loan
obligations but economic crisis ensued which
made it difficult for Paper City to meet the
terms of its obligations leading to payment
defaults. Consequently, RCBC filed a Petition
for Extrajudicial Foreclosure.
 The petition was for the extra-judicial
foreclosure of eight parcels of land including
all improvements thereon which were sold in
favor of the creditor banks RCBC, Union Bank
and Metrobank as the highest bidders.
This foreclosure sale prompted Paper City to file a
Complaint against the creditor banks alleging that the
extra-judicial sale of the properties and plants was
null and void due to lack of prior notice and
attendance of gross and evident bad faith on the part
of the creditor banks.
Acting on the said motion, the trial court issued an
Order denying the prayer and ruled that the
machineries and equipments were included in the
annexes and form part of the MTI.
Paper City filed its Motion for Reconsideration which
was favorably granted by the trial court with
justification that the disputed machineries and
equipments are chattels by agreement of the parties
through their inclusion in the four Deeds of Chattel
Mortgage and the deed of cancellation executed by
RCBC was not valid because it was done unilaterally
and without the consent of Paper City.
The CA affirmed the Order.

ISSUE
Whether the subject machineries and equipments
were included in the mortgage, extrajudicial
foreclosure and in the consequent sale.
RULING
Yes. By contracts, all uncontested in this case,
machineries and equipments are included in the
mortgage in favor of RCBC, in the foreclosure of the
mortgage and in the consequent sale on foreclosure
also in favor of petitioner.
Repeatedly, the parties stipulated that the properties
mortgaged by Paper City to RCBC are various parcels
of land including the buildings and existing
improvements thereon as well as the machineries
and equipments, which as stated in the granting
clause of the original mortgage, are "more
particularly described and listed that is to say, the
real and personal properties listed in Annexes ‘A’ and
‘B’.”
The plain language and literal interpretation of the
MTIs must be applied. The petitioner, other creditor
banks and Paper City intended from the very first
execution of the indentures that the machineries and
equipments enumerated in Annexes "A" and "B" are
included. Obviously, with the continued increase in
the amount of the loan, totaling hundreds of millions
of pesos, Paper City had to offer all valuable
properties acceptable to the creditor banks.
The MTIs did not describe the equipments and
machineries as personal property. Notably, while
"personal" appeared in the granting clause of the
original MTI, the subsequent Deed of Amendment
specifically stated that:
x x x The machineries and equipment listed in
Annexes "A" and "B" form part of the improvements
listed above and located on the parcels of land
subject of the Mortgage Trust Indenture and the Real
Estate Mortgage.
Considering that the Indenture which is the
instrument of the mortgage that was foreclosed
exactly states through the Deed of Amendment that
the machineries and equipments listed in Annexes
"A" and "B" form part of the improvements listed and
located on the parcels of land subject of the
mortgage, such machineries and equipments are
surely part of the foreclosure of the "real estate
properties, including all improvements thereon" as
prayed for in the petition.
The real estate mortgage over the machineries and
equipments is even in full accord with the
classification of such properties by the Civil Code of
the Philippines as immovable property. Thus:
Article 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all
kinds adhered to the soil;
xxxx
(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.
Jose Burgos vs. Chief of Staff
G.R. No L-64261
December 26, 1984
Facts:
Two warrants were issued against petitioners for the
search on the premises of “Metropolitan Mail” and
“We Forum” newspapers and the seizure of items
alleged to have been used in subversive activities.
Petitioners prayed that a writ of preliminary
mandatory and prohibitory injunction be issued for
the return of the seized articles, and that
respondents be enjoined from using the articles thus
seized as evidence against petitioner.
Petitioners questioned the warrants for the lack of
probable cause and that the two warrants issued
indicated only one and the same address. In
addition, the items seized subject to the warrant
were real properties.
Issue:
Whether or not the two warrants were valid to justify
seizure of the items.
Held:
The defect in the indication of the same address in
the two warrants was held by the court as a
typographical error and immaterial in view of the
correct determination of the place sought to be
searched set forth in the application. The purpose
and intent to search two distinct premises was
evident in the issuance of the two warrant.
As to the issue that the items seized were real
properties, the court applied the principle in the case
of Davao Sawmill Co. v. Castillo, ruling “that
machinery which is movable by nature becomes
immobilized when placed by the owner of the
tenement, property or plant, but not so when placed
by a tenant, usufructuary, or any other person
having only a temporary right, unless such person
acted as the agent of the owner.” In the case at bar,
petitioners did not claim to be the owners of the land
and/or building on which the machineries were
placed. This being the case, the machineries in
question, while in fact bolted to the ground remain
movable property susceptible to seizure under a
search warrant.
However, the Court declared the two warrants null
and void.
Probable cause for a search is defined as such facts
and circumstances which would lead a reasonably
discreet and prudent man to believe that an offense
has been committed and that the objects sought in
connection with the offense are in the place sought
to be searched.
The Court ruled that the affidavits submitted for the
application of the warrant did not satisfy the
requirement of probable cause, the statements of the
witnesses having been mere generalizations.
Furthermore, jurisprudence tells of the prohibition on
the issuance of general warrants. (Stanford vs. State
of Texas). The description and enumeration in the
warrant of the items to be searched and seized did
not indicate with specification the subversive nature
of the said items.
Serg's v. PCI Leasing
Serg’s Products, Inc. vs. PCI Leasing G.R. No.
137705. August 22, 2000
FACTS:
PCI Leasing and Finance filed a complaint for sum of
money, with an application for a writ of replevin.
Judge issued a writ of replevin directing its sheriff to
seize and deliver the machineries and equipment to
PCI Leasing after 5 days and upon the payment of
the necessary expenses.
The sheriff proceeded to petitioner's factory, seized
one machinery, with word that he would return for
other machineries.
Petitioner (Serg’s Products) filed a motion for special
protective order to defer enforcement of the writ of
replevin.
PCI Leasing opposed the motion on the ground that
the properties were still personal and therefore can
still be subjected to seizure and writ of replevin.
Petitioner asserted that properties sought to be
seized were immovable as defined in Article 415 of
the Civil Code.
Sheriff was still able to take possession of two more
machineries
In its decision on the original action for certiorari filed
by the Petitioner, the appellate court, Citing the
Agreement of the parties, held that the subject
machines were personal property, and that they had
only been leased, not owned, by petitioners; and
ruled that the "words of the contract are clear and
leave no doubt upon the true intention of the
contracting parties."
ISSUE: Whether or not the machineries became real
property by virtue of immobilization.
Ruling:
Petitioners contend that the subject machines used in
their factory were not proper subjects of the Writ
issued by the RTC, because they were in fact real
property.
Writ of Replevin: Rule 60 of the Rules of Court
provides that writs of replevin are issued for the
recovery of personal property only.
Article 415 (5) of the Civil Code provides that
machinery, receptacles, instruments or implements
intended by the owner of the tenement for an
industry or works which may be carried on in a
building or on a piece of land, and which tend
directly to meet the needs of the said industry or
works
In the present case, the machines that were the
subjects of the Writ of Seizure were placed by
petitioners in the factory built on their own land.They
were essential and principal elements of their
chocolate-making industry.Hence, although each of
them was movable or personal property on its own,
all of them have become “immobilized by destination
because they are essential and principal elements in
the industry.”
However, contracting parties may validly stipulate
that a real property be considered as personal. After
agreeing to such stipulation, they are consequently
estopped from claiming otherwise.Under the principle
of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact
found therein.
Section 12.1 of the Agreement between the parties
provides “The PROPERTY is, and shall at all times be
and remain, personal property notwithstanding that
the PROPERTY or any part thereof may now be, or
hereafter become, in any manner affixed or attached
to or embedded in, or permanently resting upon, real
property or any building thereon, or attached in any
manner to what is permanent.”
The machines are personal property and they are
proper subjects of the Writ of Replevin
Magdalena Villasi vs Filomeno Garcia,
substituted by his heirs
Facts:
In 1990, Villasi engaged the services of Fil-Garcia
Construction, Inc to construct a 7-storey
condominium building in QC. For failure to fully pay,
FGCI initiated a suit for collection of sum of money.
Villasi filed an answer n=denying the lateral
allegations of the complaint, averring that she
delivered the total amount but FGCI accomplished
only 28% of the construction. RTC ruled in favor of
FGCI.
Villasi appealed with CA, CA reversed the judgment
of RTC. FGCI filed a petition for review on Certiorari,
but CA denied the appeal for being filed out of time.
To satisfy the CA judgment, the sheriff levied on a
building registered under Garcia, then later a public
auction was scheduled.
To forestall the execution, Garcia filed an affidavit of
3rd party claim to set aside the sale execution for
they are the lawful owners of the building levied by
the sheriff. Garcia claimed that the city assessor
made a mistake in the assessment of the property
levied. RTC suspend the execution.
Villasi filed a motion for reconsideration, but it was
denied by RTC. Thus this instant petition.
Issue:
Whether CA erred in granting Villasi ownership of the
property.
Held:
It is a basic principle of law that money judgments
are enforceable only against the property
incontrovertibly belonging to the judgment debtor,
and if the property belonging to any third person is
mistakenly levied upon to answer for another man’s
indebtedness, such person has all the right to
challenge the levy through any of the remedies
provided for under the Rules of Court. The duty of
the sheriff is to levy the property of the judgment
debtor not that of a third person.
The right of a third-party claimant to file a terceria is
founded on his title or right of possession. Corollary
thereto, before the court can exercise its supervisory
power to direct the release of the property
mistakenly levied and the restoration thereof to its
rightful owner, the claimant must first unmistakably
establish his ownership or right of possession
thereon.
Spouses Garcia failed to prove that they have a bona
fide title to the building in question. Aside from their
postulation that as title holders of the land, the law
presumes them to be owners of the improvements
built thereon, the Spouses Garcia were unable to
adduce credible evidence to prove their ownership of
the property. In contrast, Villasi was able to
satisfactorily establish the ownership of FGCI thru the
pieces of evidence she appended to her opposition.
Although tax declarations or realty tax payment of
property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in
the concept of owner for no one in his right mind
would be paying taxes for a property that is not in
his actual or at least constructive possession. They
constitute at least proof that the holder has a claim
of title over the property.
Finally, the issue regarding the piercing of the veil of
corporate fiction is irrelevant in this case. The
Spouses Garcia are trying to protect FGCI from
liability by asserting that they, not FGCI, own the
levied property. The Spouses Garcia are asserting
their separation from FGCI. FGCI, the judgment
debtor, is the proven owner of the building. Piercing
FGCI’s corporate veil will not protect FGCI from its
judgment debt. Piercing will result in the
identification of the Spouses Garcia as FGCI itself and
will make them liable for FGCI’s judgment debt.
Davao Sawmill Co. vs Castillo
61 PHIL 709
GR No. L-40411
August 7, 1935
A tenant placed machines for use in a saw mill on the
landlord's land.
FACTS
Davao Sawmill Co., operated a sawmill. The land
upon which the business was conducted was leased
from another person. On the land, Davao Sawmill
erected a building which housed the machinery it
used. Some of the machines were mounted and
placed on foundations of cement. In the contract of
lease, Davo Sawmill agreed to turn over free of
charge all improvements and buildings erected by it
on the premises with the exception of machineries,
which shall remain with the Davao Sawmill. In an
action brought by the Davao Light and Power Co.,
judgment was rendered against Davao Sawmill. A
writ of execution was issued and the machineries
placed on the sawmill were levied upon as personalty
by the sheriff. Davao Light and Power Co., proceeded
to purchase the machinery and other properties
auctioned by the sheriff.
ISSUE
Are the machineries real or personal property?
HELD
Art.415 of the New Civil Code provides that Real
Property consists of:
(1) Lands, buildings, roads and constructions of all
kinds adhered to the soil;
xxx
(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;
Appellant should have registered its protest before or
at the time of the sale of the property. While not
conclusive, the appellant's characterization of the
property as chattels is indicative of intention and
impresses upon the property the character
determined by the parties.
Machinery is naturally movable. However, machinery
may be immobilized by destination or purpose under
the following conditions:
General Rule: The machinery only becomes
immobilized if placed in a plant by the owner of the
property or plant.
Immobilization cannot be made by a tenant, a
usufructuary, or any person having only a temporary
right.
Exception: The tenant, usufructuary, or temporary
possessor acted as agent of the owner of the
premises; or he intended to permanently give away
the property in favor of the owner.
As a rule, therefore, the machinery should be
considered as Personal Property, since it was not
placed on the land by the owner of the said land.
Makati Leasing and Finance Corp., vs Wearever
Textile Mills, Inc.,
122 SCRA 296
GR No. L-58469
May 16, 1983
FACTS
Wearever Textile Mills, Inc. executed a chattel
mortgage contract in favor of Makati Leasing and
Finance Corporation covering certain raw materials
and machinery. Upon default, Makati Leasing fi led a
petition for judicial foreclosure of the properties
mortgaged. Acting on Makati Leasing’s application for
replevin, the lower court issued a writ of seizure.
Pursuant thereto, the sheriff enforcing the seizure
order seized the machinery subject matter of the
mortgage. In a petition for certiorari and prohibition,
the Court of Appeals ordered the return of the
machinery on the ground that the same can-not be
the subject of replevin because it is a real property
pursuant to Article415 of the new Civil Code, the
same being attached to the ground by means of bolts
and the only way to remove it from Wearever
textile’s plant would be to drill out or destroy the
concrete fl oor. When the motion for reconsideration
of Makati Leasing was denied by the Court of
Appeals, Makati Leasing elevated the matter to the
Supreme Court.
ISSUE
Whether the machinery in suit is real or personal
property from the point of view of the parties.
HELD
There is no logical justification to exclude the rule out
the present case from the application of the
pronouncement in Tumalad v Vicencio, 41 SCRA
143. If a house of strong materials, like what
was involved in the Tumalad case, may be
considered as personal property for purposes
of executing a chattel mortgage thereon as
long as theparties 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 becomesimmobilized
only by destination or purpose, may not be likewise
treated as such. This is really because one who has
so agreed is estopped from the denying the
existence of the chattel mortgage.
In rejecting petitioner’s assertion on the applicability
of the Tumalad doctrine, the CA lays stress on the
fact that the house involved therein was built on a
land that did not belong to the owner of such house.
But the law makes no distinction with respect
to the ownership of the land on which the
house is built and We should not lay down
distinctions not contemplated by law.
It must be pointed out that the characterization by
the private respondent is indicative of the
intention and impresses upon the property the
character determined by the parties. As stated
in Standard Oil Co. of New York v. Jaramillo, 44 Phil.
630, it is undeniable that the parties to a contract
may, by agreement, treat as personal property that
which by nature would be a real property as long as
no interest of third parties would be prejudiced
thereby.
The status of the subject matter as movable or
immovable property was not raised as an issue
before the lower court and the CA, except in a
supplemental memorandum in support of the petition
filed in the appellate court. There is no record
showing that the mortgage has been annulled, or
that steps were taken to nullify the same. On the
other hand, respondent has benefited from the said
contract.
Equity dictates that one should not benefit at
the expense of another.
As such, private respondent could no longer be
allowed to impugn the efficacy of the chattel
mortgage after it has benefited therefrom.
Therefore, the questioned machinery should be
considered as personal property.
TUMALAD V. VICENCIO
41 SCRA 143
FACTS:
Vicencio and Simeon executed a chattel mortgage in
favor of plaintiffs Tumalad over their house, which
was being rented by Madrigal and company. This
was executed to guarantee a loan, payable in one
year with a 12% per annum interest.
The mortgage was extrajudicially foreclosed upon
failure to pay the loan. The house was sold at a
public auction and the plaintiffs were the highest
bidder. A corresponding certificate of sale was
issued. Thereafter, the plaintiffs filed an action for
ejectment against the defendants, praying that the
latter vacate the house as they were the proper
owners.
ISSUE:
W/N the chattel mortgage was null and void ab initio
because only personal properties can be subject of a
chattel mortgage.
HELD:
Certain deviations have been allowed from the
general doctrine that buildings are immovable
property such as when through stipulation, parties
may agree to treat as personal property those by
their nature would be real property. This is partly
based on the principle of estoppel wherein the
principle is predicated on statements by the owner
declaring his house as chattel, a conduct that may
conceivably stop him from subsequently claiming
otherwise.
In the case at bar, though there be no specific
statement referring to the subject house as personal
property, yet by ceding, selling or transferring a
property through chattel mortgage could only have
meant that defendant conveys the house as chattel,
or at least, intended to treat the same as such, so
that they should not now be allowed to make an
inconsistent stand by claiming otherwise.
PEOPLE'S BANK AND TRUST COMPANY vs.
DAHICAN LUMBER COMPANY (G.R. No. L-
17500 May 16, 1967)
Facts:
On September 8, 1948, Atlantic Gulf & Pacific
Company of Manila, a West Virginia corporation
licensed to do business in the Philippines sold and
assigned all its rights in the Dahican Lumber
concession to Dahican Lumber Company - hereinafter
referred to as DALCO - for the total sum of
$500,000.00, of which only the amount of
$50,000.00 was paid. Thereafter, to develop the
concession, DALCO obtained various loans from the
People's Bank & Trust Company amounting, as of
July 13, 1950, to P200,000.00. In addition, DALCO
obtained, through the BANK, a loan of $250,000.00
from the Export-Import Bank of Washington D.C.,
evidenced by five promissory notes of $50,000.00
each, maturing on different dates, executed by both
DALCO and the Dahican America Lumber
Corporation, a foreign corporation and a stockholder
of DALCO,
As security for the payment of the abovementioned
loans, on July 13, 1950 DALCO executed in favor of
the BANK a deed of mortgage covering five parcels of
land situated in the province of Camarines Norte
together with all the buildings and other
improvements existing thereon and all the personal
properties of the mortgagor located in its place of
business in the municipalities of Mambulao and
Capalonga, Camarines Norte. On the same date,
DALCO executed a second mortgage on the same
properties in favor of ATLANTIC to secure payment
of the unpaid balance of the sale price of the lumber
concession amounting to the sum of $450,000.00.
Both deeds contained a provision extending the
mortgage lien to properties to be subsequently
acquired by the mortgagor.
Both mortgages were registered in the Office of the
Register of Deeds of Camarines Norte. In addition
thereto DALCO and DAMCO pledged to the BANK
7,296 shares of stock of DALCO and 9,286 shares of
DAMCO to secure the same obligation.
Upon DALCO's and DAMCO's failure to pay the fifth
promissory note upon its maturity, the BANK paid the
same to the Export-Import Bank of Washington D.C.,
and the latter assigned to the former its credit and
the first mortgage securing it. Subsequently, the
BANK gave DALCO and DAMCO up to April 1, 1953 to
pay the overdue promissory note.c
After July 13, 1950 - the date of execution of the
mortgages mentioned above - DALCO purchased
various machineries, equipment, spare parts and
supplies in addition to, or in replacement of some of
those already owned and used by it on the date
aforesaid. Pursuant to the provision of the mortgage
deeds quoted theretofore regarding "after acquired
properties," the BANK requested DALCO to submit
complete lists of said properties but the latter failed
to do so. In connection with these purchases, there
appeared in the books of DALCO as due to Connell
Bros. Company (Philippines) - a domestic corporation
who was acting as the general purchasing agent of
DALCO -the sum of P452,860.55 and to DAMCO, the
sum of P2,151,678.34.chan
On December 16, 1952, the Board of Directors of
DALCO, in a special meeting called for the purpose,
passed a resolution agreeing to rescind the alleged
sales of equipment, spare parts and supplies by
CONNELL and DAMCO to it.
On January 13, 1953, the BANK, in its own behalf
and that of ATLANTIC, demanded that said
agreements be cancelled but CONNELL and DAMCO
refused to do so. As a result, on February 12, 1953;
ATLANTIC and the BANK, commenced foreclosure
proceedings in the Court of First Instance of
Camarines Norte against DALCO and DAMCO.
Upon motion of the parties the Court, on September
30, 1953, issued an order transferring the venue of
the action to the Court of First Instance of Manila.
On August 30, 1958, upon motion of all the parties,
the Court ordered the sale of all the machineries,
equipment and supplies of DALCO, and the same
were subsequently sold for a total consideration of
P175,000.00 which was deposited in court pending
final determination of the action. By a similar
agreement one-half (P87,500.00) of this amount was
considered as representing the proceeds obtained
from the sale of the "undebated properties" (those
not claimed by DAMCO and CONNELL), and the other
half as representing those obtained from the sale of
the "after acquired properties".
ISSUE:
WON the "after acquired properties" were subject to
the deeds of mortgage mentioned heretofore.
Assuming that they are subject thereto,
WON the mortgages are valid and binding on the
properties aforesaid inspite of the fact that they were
not registered in accordance with the provisions of
the Chattel Mortgage Law.
HELD:
Under the fourth paragraph of both deeds of
mortgage, it is crystal clear that all property of every
nature and description taken in exchange or
replacement, as well as all buildings, machineries,
fixtures, tools, equipments, and other property that
the mortgagor may acquire, construct, install, attach;
or use in, to upon, or in connection with the premises
- that is, its lumber concession - "shall immediately
be and become subject to the lien" of both
mortgages in the same manner and to the same
extent as if already included therein at the time of
their execution. Such stipulation is neither unlawful
nor immoral, its obvious purpose being to maintain,
to the extent allowed by circumstances, the original
value of the properties given as security.
Article 415 does not define real property but
enumerates what are considered as such, among
them being machinery, receptacles, instruments or
replacements intended by owner of the tenement for
an industry or works which may be carried on in a
building or on a piece of land, and shall tend directly
to meet the needs of the said industry or works.
SIBAL v. VALDEZ
FACTS: The deputy sheriff of Tarlac attached and
sold to Valdez the sugarcane planted by the plaintiff.
The plaintiff asked for the redemption of the
sugarcane. Valdez said that it cannot be subject to
redemption because it is a personal property.
ISSUE: WON the sugarcane in question is a personal
or real property.
HELD:Sugarcane is under real property as
ungathered products. The Supreme Court of
Louisiana provided that standing crops are
considered as part of the land to which they are
attached but the immovability provided for is only
one in abstract. The existence of a right on the
growing crop is mobilization by anticipation, a
gathering as it were in advance, rendering the crop
movable quoad the right acquired therein.
-A crop raised on leased premises in no sense forms
part of the immovable. It belongs to the lessee and
may be sold by him.
-Act 1508 (Chattel Mortgage Law) recognize growing
crops as personal property.
– Crops whether growing or ready to be harvested,
when produced by annual cultivation, is not part of
realty.
– Paragraph 2 of Art. 334 of the Civil Code has been
modified by Sec. 450 of Code of Civil Procedure and
Act no. 1508 in the sense that for purposes of
attachment and execution and Chattel Mortgage Law,
ungathered products have the nature of personal
property.
Macasiano vs Diokno GR 97764 (August 10,
1992)
Posted on October 19, 2012
211 SCRA 464
G.R. No. 97764
August 10, 1992
Facts:
Respondent Municipality passed Ordinance No. 86
which authorized the closure of J.Gabriel, G.G. Cruz,
Bayanihan, Lt. Garcia Extension and Opena Streets
and the establishment of a flea market thereon. This
was passed pursuant to MMC Ordinance No.2 and
was approved by the Metropolitan Manila Authority
on July 20, 1990.
On August 8, 1990, respondent municipality and
Palanyag entered into a contract agreement whereby
the latter shall operate, maintain & manage the flea
markets and/or vending areas in the aforementioned
streets with the obligation to remit dues to the
treasury of the municipal government of Parañaque.
On September 13, 1990 Brig. Gen. Macasiano
ordered the destruction and confiscation of stalls
along G.G. Cruz & Gabriel Street in Baclaran. He also
wrote a letter to Palanyag ordering the destruction of
the flea market.
Hence, respondent filed a joint petition praying for
preliminary injunction. The trial court upheld the
assailed Ordinance and enjoined petitioner from
enforcing his letter-order against Palanyag.
Issues:
WON an ordinance/resolution issued by the municipal
council of Parañaque authorizing the lease & use of
public streets/thoroughfares as sites for the flea
market is valid.
Held: No.
J. Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension
and Opena Streets are local roads used for public
service and are therefore considered public
properties of respondent municipality. Properties of
the local government devoted to public service are
deemed public and are under the absolute control of
Congress. Hence, local governments have no
authority to control/regulate the use of public
properties unless specific authority is vested upon
them by Congress.
Sec. 10, Chapter II of the LGC should be read and
interpreted in accordance with basic principles
already established by law.
The closure should be for the sole purpose of
withdrawing the road or other public property from
public use when circumstances show that such
property is no longer intended/necessary for public
use/service. Once withdrawn, the property then
becomes patrimonial property of the LGU concerned
and only then can said LGU use the property as an
object of an ordinary contract. Roads and streets
available to the public and ordinarily used for
vehicular traffic are still considered public property
devoted to public use. The LGU has no power to use
it for another purpose or to dispose of or lease it to
private persons.
Also, the disputed ordinance cannot be validly
implemented because it can’t be considered
approved by the Metropolitan Manila Authority due to
non-compliance with the conditions it imposed for
the approval of said ordinance.
The powers of an LGU are not absolute, but subject
to the limitations laid down by the Constitution and
laws such as the Civil Code. Every LGU has the sworn
obligation to enact measures that will enhance the
public health, safety & convenience, maintain peace
& order and promiote the general prosperity of the
inhanbitants pf the local units.
As in the Dacanay case, the general public have the
right to demand the demolition of the illegally
constructed stalls in public roads & streets. The
officials of the respondent municipality have the
corresponding duty arising from public office to clear
the city streets and restore them to their specific
public purpose.
The ordinance is void and illegal for lack of basis in
authority in laws applicable during its time.
DREAM VILLAGE NEIGHBORHOOD
ASSOCIATION, INC.
v. BASES DEVELOPMENT AUTHORITY
[G.R. No. 192896. July 24, 2013]
Land Titles and Deeds Case Digest by John Paul C.
Ladiao (21 Sept 2015)
Topic: Survey of the Land – Form & Contents
Sections 15-19
FACTS:
Petitioner Dream Village Neighborhood Association,
Inc. (Dream Village) claims to represent more than
2,000 families who have been occupying a 78,466-
square meter lot in Western Bicutan, Taguig City
since 1985 "in the concept of owners continuously,
exclusively and notoriously."
On October 16, 1987, President Corazon C. Aquino
issued Proclamation No. 172 amending Proclamation
No. 2476 by limiting to Lots 1 and 2 of the survey
Swo-13-000298 the areas in Western Bicutan open
for disposition.
Now charging the Bases Conversion and
Development Authority (BCDA) of wrongfully
asserting title to Dream Village and unlawfully
subjecting its members to summary demolition,
resulting in unrest and tensions among the residents,
on November 22, 1999, the latter filed a letter-
complaint with the COSLAP to seek its assistance in
the verification survey of the subject 78,466-sq m
property, which they claimed is within Lot 1 of Swo-
13-000298 and thus is covered by Proclamation No.
172. They claim that they have been occupying the
area for thirty (30) years "in the concept of owners
continuously, exclusively and notoriously for several
years," and have built their houses of sturdy
materials thereon and introduced paved roads,
drainage and recreational and religious facilities.
Dream Village, thus, asserts that the lot is not among
those transferred to the BCDA under R.A. No. 7227,
and therefore patent applications by the occupants
should be processed by the Land Management
Bureau (LMB).
On April 1, 2004, the COSLAP received the final
report of the verification survey and a blueprint copy
of the survey plan from Atty. Rizaldy Barcelo,
Regional Technical Director for Lands of DENR.
Specifically, Item No. 3 of the DENR report states:
3. Lot-1, Swo-000298 is inside Proclamation 172.
Dream Village Neighborhood Association, Inc. is
outside Lot-1, Swo-13-000298 and inside Lot-10, 11
& Portion of Lot 13, Swo-00-0001302 with an actual
area of 78,466 square meters. Likewise, the area
actually is outside Swo-00-0001302 of BCDA.
On the basis of the DENR’s verification survey report,
the COSLAP resolved that Dream Village lies outside
of BCDA, and particularly, outside of Swo-00-
0001302, and thus directed the LMB of the DENR to
process the applications of Dream Village’s members
for sales patent, noting that in view of the length of
time that they "have been openly, continuously and
notoriously occupying the subject property in the
concept of an owner, x x x they are qualified to apply
for sales patent on their respective occupied lots
pursuant to R.A. Nos. 274 and 730 in relation to the
provisions of the Public Land Act."
The CA in its Decision dated September 10, 2009
ruled that the COSLAP has no jurisdiction over the
complaint because the question of whether Dream
Village is within the areas declared as available for
disposition in Proclamation No. 172 is beyond its
competence to determine, even as the land in
dispute has been under a private title since 1906,
and presently its title is held by a government
agency, the BCDA, in contrast to the case of Bañaga
relied upon by Dream Village, where the disputed
land was part of the public domain and the
disputants were applicants for sales patent thereto.
Dream Village’s motion for reconsideration was
denied in the appellate court’s Order of July 13,
2010, thus the petition for Review in the Supreme
Court.
ISSUE:
Whether or not the area occupied by Dream Village,
on the basis of the DENR’s verification survey report,
that sits on the abandoned C-5 Road, which lies
outside the area of BCDA, declared in Proclamation
Nos. 2476 and 172 as alienable and disposable.
HELD:
NO. The petition is DENIED.
The mere fact that the original plan for C-5 Road to
cross Swo-00-0001302 was abandoned by deviating
it northward to traverse the southern part of Libingan
ng mga Bayani does not signify abandonment by the
government of the bypassed lots, nor that these lots
would then become alienable and disposable. They
remain under the title of the BCDA, even as it is
significant that under Section 8(d) of R.A. No. 7227,
a relocation site of 30.5 has. was to be reserved for
families affected by the construction of C-5 Road. It
is nowhere claimed that Lots 10, 11 and 13 of Swo-
00-0001302 are part of the said relocation site.
These lots border C-5 Road in the south, making
them commercially valuable to BCDA, a farther
argument against a claim that the government has
abandoned them to Dream Village.
Article 1113 of the Civil Code provides that "property
of the State or any of its subdivisions not patrimonial
in character shall not be the object of prescription."
Thus, under Article 422 of the Civil Code, public
domain lands become patrimonial property only if
there is a declaration that these are alienable or
disposable, together with an express government
manifestation that the property is already patrimonial
or no longer retained for public service or the
development of national wealth. Only when the
property has become patrimonial can the prescriptive
period for the acquisition of property of the public
dominion begin to run.
US vs Carlos
G.R. No. 6295, 21 Phil 543September 1, 1911
FACTS:
Ignacio Carlos has been a consumer of electricity
furnished by the Manila Electric Railroad and Light
Company for a building containing the residence of
the accused and 3 other residences. Believing that
more light is consumed than what is shown in the
meter installed, the company installed an additional
meter on the pole outside Carlos’s house to compare
the actual consumption. They found out that Carlos
used a jumper. Further, a jumper was found in a
drawer of a small cabinet in the room of the
defendant’s house where the meter was installed. In
the absence of any explanation for his possession of
said device, the presumption raised was that Carlos
was the owner of the device whose only use was to
deflect the flow of electricity, causing loss to the
Meralco of over 2000 kilowatts of current. Accused of
theft, Carlos’s defense was that electricity was an
unknown force, not a fluid, and being intangible,
could not be the object of theft.
ISSUE:
Whether the court erred in declaring that electricity
can be the object of theft.
HELD:
While electric current is not a fluid, still, its
manifestations and effects like those of gas may be
seen and felt. The true test of what may be stolen is
not whether it is corporeal or incorporeal, but
whether, being possessed of value, a person other
than the owner may appropriate the same.
Electricity, like gas, is a valuable merchandise and
may thus be stolen. (See also U.S. v. Tambunting, 41
Phil. 364).The court further ruled that electricity, the
same as gas, is a valuable article of merchandise,
bought and sold like other personal property and is
capable of appropriation by another. It is also
susceptible of being severed from a mass or larger
quantity and of being transported from place to
place. Hence, noerror was committed by the trial
court in holding that electricity is a subject of larceny.