Professional Documents
Culture Documents
Williamson
G. R. No. L-11658 February 15, 1918
Concepts:
Issue:
Who is the owner of the property?
Ruling:
Strong Machinery should be upheld in this case. However, the reasoning of the trial court cannot be
sustained. Under the Chattel Mortgage Law, only personal movable properties are subject to this law.
The attachment and different treatment of the building to the land does not change its nature: the building
is a real property. Even if the parties dealt with it as a chattel; the manner on how it is dealt with the parties
does not change its nature. Not being under the Chattel Mortgage Law due to its very nature, the building
should be registered to the registry of lands, not to the chattel registry. It follows that neither the original
registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the
building and the machinery installed therein, nor the annotation in the registry of the sale of the
mortgaged property, had any effect whatever so far as the building is concerned.
The court ruled that the reasoning should not be anchored on 1473(1) of the Civil Code which pertains to
personal property but on its 3rd paragraph which contemplates a scenario that no one registered the property.
The Supreme Court ruled that SMC had better rights over Yee. This is due to Yee’s conduct. It is apparent
that Yee acted in bad faith—he already knew that SMC took possession of the building through the
constructive notice by the registry as well as the registered building itself and the possession of SMC. Still,
Yee proceeded with the foreclosure and sale to acquire the building.
Despite the defect that SMC’s title was registered to chattel registry, Supreme Court treated this as no-entry
to the land registry, not recognizing Yee’s registration despite having it first registered in land registry.
Therefore, the court applied 1473(3) which states that: Should there be no entry, the property shall belong
to the person who first took possession of it in good faith, and, in the absence thereof, to the person who
presents the oldest title, provided there is good faith.
In this case, SMC took first possession in good faith and should therefore be the owners.