property i. cases

8/12/2019 Property I. Cases

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EN BANC

G.R. No. L-11658 February 15, 1918

LEUNG YEE, plaintiff-appellant,vs.FRANK L. STRONG MAC!NERY COM"ANY a#$ %. G. &!LL!AMSON, defendants-appellees.

CARSON, J.'

The "Compaia Agricola Filipina" boght a considerable !antit of rice-cleaning machinercompan from the defendant machiner compan, and e#ected a chattel mortgage thereon tosecre pament of the prchase price. $t inclded in the mortgage deed the bilding of strongmaterials in %hich the machiner %as installed, %ithot an reference to the land on %hich itstood. The indebtedness secred b this instrment not having been paid %hen it fell de, themortgaged propert %as sold b the sheriff, in prsance of the terms of the mortgageinstrment, and %as boght in b the machiner compan. The mortgage %as registered in thechattel mortgage registr, and the sale of the propert to the machiner compan in satisfactionof the mortgage %as annotated in the same registr on &ecember '(, )()*.

A fe% %ee+s thereafter, on or abot the )th of anar, )(), the "Compaia Agricola Filipina"e#ected a deed of sale of the land pon %hich the bilding stood to the machiner compan,bt this deed of sale, althogh e#ected in a pblic docment, %as not registered. This deedma+es no reference to the bilding erected on the land and %old appear to have been e#ectedfor the prpose of cring an defects %hich might be fond to e#ist in the machiner companstitle to the bilding nder the sheriffs certificate of sale. The machiner compan %ent intopossession of the bilding at or abot the time %hen this sale too+ place, that is to sa, themonth of &ecember, )()*, and it has contined in possession ever since.

At or abot the time %hen the chattel mortgage %as e#ected in favor of the machinercompan, the mortgagor, the "Compaia Agricola Filipina" e#ected another mortgage to the

plaintiff pon the bilding, separate and apart from the land on %hich it stood, to secrepament of the balance of its indebtedness to the plaintiff nder a contract for the constrctionof the bilding. /pon the failre of the mortgagor to pa the amont of the indebtednesssecred b the mortgage, the plaintiff secred 0dgment for that amont, levied e#ection ponthe bilding, boght it in at the sheriffs sale on or abot the )1th of &ecember, )(), and hadthe sheriffs certificate of the sale dl registered in the land registr of the 2rovince of Cavite.

At the time %hen the e#ection %as levied pon the bilding, the defendant machiner compan%hich %as in possession, filed %ith the sheriff a s%orn statement setting p its claim of title anddemanding the release of the propert from the lev. Thereafter, pon demand of the sheriff, theplaintiff e#ected an indemnit bond in favor of the sheriff in the sm of 2)',333, in reliance

pon %hich the sheriff sold the propert at pblic action to the plaintiff, %ho %as the highestbidder at the sheriffs sale.

This action %as institted b the plaintiff to recover possession of the bilding from themachiner compan.

The trial 0dge, reling pon the terms of article )4* of the Civil Code, gave 0dgment in favorof the machiner compan, on the grond that the compan had its title to the bildingregistered prior to the date of registr of the plaintiffs certificate.

Article )4* of the Civil Code is as follo%s5


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$f the same thing shold have been sold to different vendees, the o%nership shall betransfer to the person %ho ma have the first ta+en possession thereof in good faith, if itshold be personal propert.

6hold it be real propert, it shall belong to the person ac!iring it %ho first recorded it inthe registr.

6hold there be no entr, the propert shall belong to the person %ho first too+

possession of it in good faith, and, in the absence thereof, to the person %ho presents theoldest title, provided there is good faith.

The registr her referred to is of corse the registr of real propert, and it mst be apparentthat the annotation or inscription of a deed of sale of real propert in a chattel mortgage registrcannot be given the legal effect of an inscription in the registr of real propert. B its e#pressterms, the Chattel 7ortgage 8a% contemplates and ma+es provision for mortgages of personapropert9 and the sole prpose and ob0ect of the chattel mortgage registr is to provide for theregistr of "Chattel mortgages," that is to sa, mortgages of personal propert e#ected in themanner and form prescribed in the statte. The bilding of strong materials in %hich the rice-cleaning machiner %as installed b the "Compaia Agricola Filipina" %as real propert, and the

mere fact that the parties seem to have dealt %ith it separate and apart from the land on %hichit stood in no %ise changed its character as real propert. $t follo%s that neither the originalregistr in the chattel mortgage of the bilding and the machiner installed therein, not theannotation in that registr of the sale of the mortgaged propert, had an effect %hatever so faras the bilding %as concerned.

:e conclde that the rling in favor of the machiner compan cannot be sstained on thegrond assigned b the trial 0dge. :e are of opinion, ho%ever, that the 0dgment mst besstained on the grond that the agreed statement of facts in the cort belo% discloses thatneither the prchase of the bilding b the plaintiff nor his inscription of the sheriffs certificateof sale in his favor %as made in good faith, and that the machiner compan mst be held to bethe o%ner of the propert nder the third paragraph of the above cited article of the code, it

appearing that the compan first too+ possession of the propert9 and frther, that the bildingand the land %ere sold to the machiner compan long prior to the date of the sheriffs sale tothe plaintiff.

$t has been sggested that since the provisions of article )4* of the Civil Code re!ire "goodfaith," in e#press terms, in relation to "possession" and "title," bt contain no e#pressre!irement as to "good faith" in relation to the "inscription" of the propert on the registr, itmst be presmed that good faith is not an essential re!isite of registration in order that it mahave the effect contemplated in this article. :e cannot agree %ith this contention. $t cold nothave been the intention of the legislator to base the preferential right secred nder this articleof the code pon an inscription of title in bad faith. 6ch an interpretation placed pon the

langage of this section %old open %ide the door to frad and collsion. The pblic recordscannot be converted into instrments of frad and oppression b one %ho secres an inscriptiontherein in bad faith. The force and effect given b la% to an inscription in a pblic recordprespposes the good faith of him %ho enters sch inscription9 and rights created b statte,%hich are predicated pon an inscription in a pblic registr, do not and cannot accre nder aninscription "in bad faith," to the benefit of the person %ho ths ma+es the inscription.

Constring the second paragraph of this article of the code, the spreme cort of 6pain held inits sentencia of the )*th of 7a, )(31, that5


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This rle is al%as to be nderstood on the basis of the good faith mentioned in the firstparagraph9 therefore, it having been fond that the second prchasers %ho record theirprchase had +no%ledge of the previos sale, the !estion is to be decided in accordance%ith the follo%ing paragraph. ;Note ', art. )4*, Civ. Code, 7edina and 7aranon

Althogh article )4*, in its second paragraph, provides that the title of conveance ofo%nership of the real propert that is first recorded in the registr shall have preference,

this provision mst al%as be nderstood on the basis of the good faith mentioned in thefirst paragraph9 the legislator cold not have %ished to stri+e it ot and to sanction badfaith, 0st to compl %ith a mere formalit %hich, in given cases, does not obtain even inreal disptes bet%een third persons.

The agreed statement of facts clearl discloses that the plaintiff, %hen he boght the bilding atthe sheriffs sale and inscribed his title in the land registr, %as dl notified that the machinercompan had boght the bilding from plaintiffs 0dgment debtor9 that it had gone intopossession long prior to the sheriffs sale9 and that it %as in possession at the time %hen thesheriff e#ected his lev. The e#ection of an indemnit bond b the plaintiff in favor of thesheriff, after the machiner compan had filed its s%orn claim of o%nership, leaves no room fordobt in this regard. ?aving boght in the bilding at the sheriffs sale %ith fll +no%ledge thatat the time of the lev and sale the bilding had alread been sold to the machiner compan bthe 0dgment debtor, the plaintiff cannot be said to have been a prchaser in good faith9 and ofcorse, the sbse!ent inscription of the sheriffs certificate of title mst be held to have beentainted %ith the same defect.

2erhaps %e shold ma+e it clear that in holding that the inscription of the sheriffs certificate ofsale to the plaintiff %as not made in good faith, %e shold not be nderstood as !estioning, inan %a, the good faith and genineness of the plaintiffs claim against the "Compaia AgricolaFilipina." The trth is that both the plaintiff and the defendant compan appear to have had 0stand righteos claims against their common debtor. No criticism can properl be made of thee#ercise of the tmost diligence b the plaintiff in asserting and e#ercising his right to recover

the amont of his claim from the estate of the common debtor. :e are strongl inclined tobelieve that in procring the lev of e#ection pon the factor bilding and in bing it at thesheriffs sale, he considered that he %as doing no more than he had a right to do nder all thecircmstances, and it is highl possible and even probable that he thoght at that time that he%old be able to maintain his position in a contest %ith the machiner compan. There %as nocollsion on his part %ith the common debtor, and no thoght of the perpetration of a frad ponthe rights of another, in the ordinar sense of the %ord. ?e ma have hoped, and dobtless hedid hope, that the title of the machiner compan %old not stand the test of an action in acort of la%9 and if later developments had confirmed his nfonded hopes, no one cold!estion the legalit of the propriet of the corse he adopted.

Bt it appearing that he had fll +no%ledge of the machiner compans claim of o%nership%hen he e#ected the indemnit bond and boght in the propert at the sheriffs sale, and itappearing frther that the machiner compans claim of o%nership %as %ell fonded, he cannotbe said to have been an innocent prchaser for vale. ?e too+ the ris+ and mst stand b theconse!ences9 and it is in this sense that %e find that he %as not a prchaser in good faith.

@ne %ho prchases real estate %ith +no%ledge of a defect or lac+ of title in his vendor cannotclaim that he has ac!ired title thereto in good faith as against the tre o%ner of the land or ofan interest therein9 and the same rle mst be applied to one %ho has +no%ledge of facts %hichshold have pt him pon sch in!ir and investigation as might be necessar to ac!aint him%ith the defects in the title of his vendor. A prchaser cannot close his ees to facts %hich shold


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pt a reasonable man pon his gard, and then claim that he acted in good faith nder the beliefthat there %as no defect in the title of the vendor. ?is mere refsal to believe that sch defecte#ists, or his %illfl closing of his ees to the possibilit of the e#istence of a defect in hisvendors title, %ill not ma+e him an innocent prchaser for vale, if after%ards develops that thetitle %as in fact defective, and it appears that he had sch notice of the defects as %old haveled to its discover had he acted %ith that measre of precation %hich ma reasonabl beac!ired of a prdent man in a li+e sitation. ood faith, or lac+ of it, is in its analsis a !estionof intention9 bt in ascertaining the intention b %hich one is actated on a given occasion, %e

are necessaril controlled b the evidence as to the condct and ot%ard acts b %hich alonethe in%ard motive ma, %ith safet, be determined. 6o it is that "the honest of intention," "thehonest la%fl intent," %hich constittes good faith implies a "freedom from +no%ledge andcircmstances %hich oght to pt a person on in!ir," and so it is that proof of sch +no%ledgeovercomes the presmption of good faith in %hich the corts al%as indlge in the absence ofproof to the contrar. "ood faith, or the %ant of it, is not a visible, tangible fact that can beseen or toched, bt rather a state or condition of mind %hich can onl be 0dged of b actal orfancied to+ens or signs." ;:ilder vs.ilman, t., 3, 39 Cf. Cardenas 8mber Co. vs.6hadel, ' 8a. Ann., '3(-'3(19 2in+erton Bros. Co. vs.Bromle, ))( 7ich., 1, )3, )4.>

:e conclde that pon the gronds herein set forth the disposing part of the decision and0dgment entered in the cort belo% shold be affirmed %ith costs of this instance against theappellant. 6o ordered.

EN BANC

G.R. No(. L-1)81*-18 February +8, 1958

ENR!UE LO"E,petitioner,

vs.!CENTE OROSA, %R., a#$ "LAA TEATRE, !NC.,respondents.

FEL!/, J.'

Enri!e 8opeD is a resident of Balaan, Batangas, doing bsiness nder the trade name of8opeD-Castelo 6a%mill. 6ometime in 7a, )(, icente @rosa, r., also a resident of the sameprovince, dropped at 8opeD hose and invited him to ma+e an investment in the theatrebsiness. $t %as intimated that @rosa, his famil and close friends %ere organiDing a corporationto be +no%n as 2laDa Theatre, $nc., that %old engage in sch ventre. Althogh 8opeDe#pressed his n%illingness to invest of the same, he agreed to sppl the lmber necessar for

the constrction of the proposed theatre, and at @rosas behest and assrance that the latter%old be personall liable for an accont that the said constrction might incr, 8opeD frtheragreed that pament therefor %old be on demand and not cash on deliver basis. 2rsant tosaid verbal agreement, 8opeD delivered the lmber %hich %as sed for the constrction of the2laDa Theatre on 7a )4, )(, p to &ecember of the same ear. Bt of the total cost of thematerials amonting to 2','.1, 8opeD %as paid onl 2'3,11.3, ths leaving a balance of2),44).*.

:e ma state at this 0nctre that the 2laDa Theatre %as erected on a piece of land %ith an areaof 4(.)4 s!are meters formerl o%ned b icente @rosa, r., and %as ac!ired b thecorporation on 6eptember ', )(, for 2,333. As 8opeD %as pressing @rosa for pament of the


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remaining npaid obligation, the latter and Belarmino stia, the president of the corporation,promised to obtain a ban+ loan b mortgaging the properties of the 2laDa Theatre., ot of %hichsaid amont of 2),44).* %old be satisfied, to %hich assrance 8opeD had to accede/n+no%n to him, ho%ever, as earl as November, )(, the corporation alread got a loan for2*3,333 from the 2hilippine National Ban+ %ith the 8Don 6ret Compan as sret, and thecorporation in trn e#ected a mortgage on the land and bilding in favor of said compan asconter-secrit. As the land at that time %as not et broght nder the operation of the Torrens6stem, the mortgage on the same %as registered on November ), )(, nder Act No. **.

6bse!entl, %hen the corporation applied for the registration of the land nder Act (, schmortgage %as not revealed and ths @riginal Certificate of Title No. @-*() %as correspondinglissed on @ctober ', )(4, %ithot an encmbrance appearing thereon.

2ersistent demand from 8opeD for the pament of the amont de him cased icente @rosa, r.to e#ecte on 7arch )4, )(4, an alleged "deed of assignment" of his '3 shares of stoc+ of the2laDa Theater, $nc., at 2)33 per share or %ith a total vale of 2',333 in favor of the creditorand as the obligation still remained nsettled, 8opeD filed on November )', )(4, a complaint%ith the Cort of First $nstance of Batangas ;Civil Case No. 3) %hich later became -4>against icente @rosa, r. and 2laDa Theater, $nc., praing that defendants be sentenced to pahim 0ointl and severall the sm of 2),44).*, %ith legal interest from the firing of the action9that in case defendants fail to pa the same, that the bilding and the land covered b @CT No.@-*() o%ned b the corporation be sold at pblic action and the proceeds thereof be applied tosaid indebtedness9 or that the '3 shares of the capital stoc+ of the 2laDa Theatre, $nc.,assigned b icente @rosa, r., to said plaintiff be sold at pblic action for the same prpose9and for sch other remedies as ma be %arranted b the circmstances. 2laintiff also cased theannotation of a notice of lis pendens on said properties %ith the egister of &eeds.

&efendants icente @rosa, r. and 2laDa Theatre, $nc., filed separate ans%ers, the first deningthat the materials %ere delivered to him as a promoter and later treasrer of the corporation,becase he had prchased and received the same on his personal accont9 that the land on%hich the movie hose %as constrcted %as not charged %ith a lien to secre the pament ofthe aforementioned npaid obligation9 and that the '3 shares of stoc+ of the 2laDa Theatre,

$nc., %as not assigned to plaintiff as collaterals bt as direct secrit for the pament of hisindebtedness. As special defense, this defendant contended that as the '3 shares of stoc+assigned and conveed b the assignor and accepted b 8opeD as direct secrit for the pamentof the amont of 2),44).* %ere personal properties, plaintiff %as barred from recovering andeficienc if the proceeds of the sale thereof at pblic action %old not be sfficient to coverand satisf the obligation. $t %as ths praed that he be declared e#empted from the pament ofan deficienc in case the proceeds from the sale of said personal properties %old not beenogh to cover the amont soght to be collected.

&efendant 2laDa Theatre, $nc., on the other hand, practicall set p the same line of defense balleging that the bilding materials delivered to @rosa %ere on the latters personal accont9 and

that there %as no nderstanding that said materials %old be paid 0ointl and severall b @rosaand the corporation, nor %as a lien charged on the properties of the latter to secre pament ofthe same obligation. As special defense, defendant corporation averred that %hile it %as trethat the materials prchased b @rosa %ere sold b the latter to the corporation, schtransactions %ere in good faith and for valable consideration ths %hen plaintiff failed to claimsaid materials %ithin *3 das from the time of removal thereof from @rosa, lmber became adifferent and distinct specie and plaintiff lost %hatever rights he might have in the same andconse!entl had no recorse against the 2laDa Theatre, $nc., that the claim cold not have beenrefectionar credit, for sch +ind of obligation referred to an indebtedness incrred in the repairor reconstrction of something alread e#isting and this concept did not inclde an entirel ne%%or+9 and that the 2laDa Theatre, $nc., having been incorporated on @ctober ), )(, it cold


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not have contracted an obligation prior to said date. $t %as, therefore, praed that thecomplaint be dismissed9 that said defendant be a%arded the sm 2 ,333 for damages, and schother relief as ma be 0st and proper in the premises.

The sret compan, in the meantime, pon discover that the land %as alread registerednder the Torrens 6stem and that there %as a notice of lis pendens thereon, filed on Agst )4,)(1, or %ithin the )-ear period after the issance of the certificate of title, a petition forrevie% of the decree of the land registration cort dated @ctober )1, )(4, %hich %as made the

basis of @CT No. @-*)(, in order to annotate the rights and interests of the sret compan oversaid properties ;8and egistration Case No. )4 8@ ec. No. '(>. @pposition thereto %asoffered b Enri!e 8opeD, asserting that the amont demanded b him constitted a preferredlien over the properties of the obligors9 that the sret compan %as gilt of negligence %hen itfailed to present an opposition to the application for registration of the propert9 and that if anviolation of the rights and interest of said sret %old ever be made, same mst be sb0ect tothe lien in his favor.

The t%o cases %ere heard 0ointl and in a decision dated @ctober *3, )(', the lo%er Cort,after ma+ing an e#hastive and detailed analsis of the respective stands of the parties and theevidence addced at the trial, held that defendants icente @rosa, r., and the 2laDa Theatre,$nc., %erejointlyliable for the npaid balance of the cost of lmber sed in the constrction ofthe building and the plaintiff ths ac!ired the materialmans lien over the same. $n ma+ing theprononcement that the lien %as merel confined to the bilding and did not e#tend to the landon %hich the constrction %as made, the trial 0dge too+ into consideration the fact that %henplaintiff started the deliver of lmber in 7a, )(, the land %as not et o%ned b thecorporation9 that the mortgage in favor of 8Don 6ret Compan %as previosl registerednder Act No. **9 that the codal provision ;Art. )('* of the old 6panish Civil Code> specifingthat refection credits are preferred cold refer onl to bildings %hich are also classified as realproperties, pon %hich said refection %as made. $t %as, ho%ever, declared that plaintiffs lien onthe bilding %as sperior to the right of the sret compan. And finding that the 2laDa Theatre,$nc., had no ob0ection to the revie% of the decree issed in its favor b the land registrationcort and the inclsion in the title of the encmbrance in favor of the sret compan, the cort

a quo granted the petition filed b the latter compan. &efendants @rosa and the 2laDa Theatre,$nc., %ere ths re!ired to pa jointly the amont of 2),44).* %ith legal interest and costs%ithin (3 das from notice of said decision9 that in case of defalt, the '3 shares of stoc+assigned b @rosa to plaintiff be sold at pblic action and the proceeds thereof be applied tothe pament of the amont de the plaintiff, pls interest and costs9 and that the encmbrancein favor of the sret compan be endorsed at the bac+ of @CT No. @-*(), %ith notation $ that%ith respect to the bilding, said mortgage %as sb0ect to the materialmans lien in favor ofEnri!e 8opeD.

2laintiff tried to secre a modification of the decision in so far as it declared that the obligation oftherein defendants %as 0oint instead of solidar, and that the lien did not e#tend to the land, bt

same %as denied b order the cort of &ecember '*, )('. The matter %as ths appealed tothe Cort of appeals, %hich affirmed the lo%er corts rling, and then to this Tribnal. $n thisinstance, plaintiff-appellant raises ' isses5 ;)> %hether a materialmans lien for the vale of thematerials sed in the constrction of a bilding attaches to said strctre alone and does note#tend to the land on %hich the bilding is adhered to9 and ;'> %hether the lo%er cort and theCort of Appeals erred in not providing that the material mans liens is sperior to the mortgagee#ected in favor sret compan not onl on the bilding bt also on the land.

$t is to be noted in this appeal that Enri!e 8opeD has not raised an !estion against the part ofthe decision sentencing defendants @rosa and 2laDa Theatre, $nc., to pa jointly the sm of2),44).*, so :e %ill not ta+e p or consider anthing on that point. Appellant, ho%ever,


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contends that the lien created in favor of the frnisher of the materials sed for the constrction,repair or refection of a bilding, is also e#tended to the land %hich the constrction %as made,and in spport thereof he relies on Article )('* of the 6panish Civil Code, pertinent la% on thematter, %hich reads as follo%s5

AT. )('*. :ith respect to determinate real propert and real rights of the debtor, thefollo%ing are preferred5

# # # # # # # # #

. Credits for refection, not entered or recorded, with respect to the estate upon whichthe refection was made, and onl %ith respect to other credits different from thosementioned in for preceding paragraphs.

$t is arged that in vie% of the emploment of the phrase real estate, or immovable propert,and inasmch as said provision does not contain an specification delimiting the lien to thebilding, said article mst be constred as to embrace both the land and the bilding orstrctre adhering thereto. :e cannot sbscribe to this vie%, for %hile it is tre that generall,real estate connotes the land and the bilding constrcted thereon, it is obvios that the

inclsion of the bilding, separate and distinct from the land, in the enmeration of %hat maconstitte real properties cold mean onl one thing G that a bilding is b itself an immovablepropert, a doctrine alread prononced b this Cort in the case of Leung Yee vs. StrongMachinery Co., *4 2hil., . 7oreover, and in vie% of the absence of an specific provision ofla% to the contrar, a bilding is an immovable propert, irrespective of %hether or not saidstrctre and the land on %hich it is adhered to belong to the same o%ner.

A close e#amination of the provision of the Civil Code invo+ed b appellant reveals that the la%gives preference to nregistered refectionar credits onl %ith respect to the real estate pon%hich the refection or %or+ %as made. This being so, the inevitable conclsion mst be that thelien so created attaches merel to the immovable propert for the constrction or repair of %hichthe obligation %as incrred. Evidentl, therefore, the lien in favor of appellant for the npaid

vale of the lmber sed in the constrction of the bilding attaches onl to said strctre andto no other propert of the obligors.

Considering the conclsion ths arrived at, i.e., that the materialmans lien cold be chargedonl to the bilding for %hich the credit %as made or %hich received the benefit of refection, thelo%er cort %as right in, holding at the interest of the mortgagee over the land is sperior andcannot be made sb0ect to the said materialmans lien.

:herefore, and on the strength of the foregoing considerations, the decision appealed from ishereb affirmed, %ith costs against appellant. $t is so ordered.

F$6T &$$6$@N


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G.R. No. L-5)))8 Au0u( 21, 198*

"RU3ENT!AL 4ANK, petitioner,vs.ONORA4LE 3OM!NGO 3. "AN!S, "re($#0 %u$0e o 4ra#7 !!!, Cour o Fr(

!#(a#7e o aba:e( a#$ O:o#0a;o Cy< FERNAN3O MAGCALE = TEO3ULA 4ALUYUT-

MAGCALE, respondents.

"ARAS, J.:

This is a petition for revie% on certiorari of the November )*, )(41 &ecision of the then Cort ofFirst $nstance of Hambales and @longapo Cit in Civil Case No. '*-3 entitled "6posesFernando A. 7agcale and Teodla Balt-7agcale vs. ?on. amon I. 2ardo and 2rdentiaBan+" declaring that the deeds of real estate mortgage e#ected b respondent sposes in favorof petitioner ban+ are nll and void.

The ndispted facts of this case b stiplation of the parties are as follo%s5

... on November )(, )(4), plaintiffs-sposes Fernando A. 7agcale and Teodla

Balt 7agcale secred a loan in the sm of 243,333.33 from the defendant2rdential Ban+. To secre pament of this loan, plaintiffs e#ected in favor ofdefendant on the aforesaid date a deed of eal Estate 7ortgage over the follo%ingdescribed properties5

l. A '-6T@EI, 6E7$-C@NCETE, residential bilding %ith %arehose spacescontaining a total floor area of '* s!. meters, more or less, generall constrctedof mi#ed hard %ood and concrete materials, nder a roofing of cor. g. i. sheets9declared and assessed in the name of FENAN&@ 7ACA8E nder Ta# &eclarationNo. '))3(, issed b the Assessor of @longapo Cit %ith an assessed vale of2*,'(3.33. This bilding is the onl improvement of the lot.

'. T?E 2@2ETI hereb conveed b %a of 7@TAE incldes the right ofoccpanc on the lot %here the above propert is erected, and more particlarldescribed and bonded, as follo%s5

A first class residential land $dentffied as 8ot No. 4'3, ;Ts-*31,@longapo To%nsite 6bdivision> Ardoin 6treet, East Ba0ac-Ba0ac@longapo Cit, containing an area of s!. m. more or less, declaredand assessed in the name of FENAN&@ 7ACA8E nder Ta# &rationNo. )(( issed b the Assessor of @longapo Cit %ith an assessedvale of 2),13.339 bonded on the

N@T?5 B No. , Ardoin 6treet

6@/T?5 B No. ', Ardoin 6treet

EA6T5 B *4 Canda 6treet, and

:E6T5 B Ardoin 6treet.

All corners of the lot mar+ed b conc. clindricamonments of the Brea of 8ands as visible limits; E#hibit "A, " also E#hibit ")" for defendant>.


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Apart from the stiplations in the printed portion of the aforestateddeed of mortgage, there appears a rider tped at the bottom of thereverse side of the docment nder the lists of the propertiesmortgaged %hich reads, as follo%s5

AN& $T $6 F/T?E AEE& that in the event the 6ales2atent on the lot applied for b the 7ortgagors as hereinstated is released or issed b the Brea of 8ands, the

7ortgagors hereb athoriDe the egister of &eeds tohold the egistration of same ntil this 7ortgage iscancelled, or to annotate this encmbrance on the Titlepon athorit from the 6ecretar of Agricltre andNatral esorces, %hich title %ith annotation, shall bereleased in favor of the herein 7ortgage.

From the afore!oted stiplation, it is obvios that the mortgagee;defendant 2rdential Ban+> %as at the otset a%are of the fact thatthe mortgagors ;plaintiffs> have alread filed a 7iscellaneos 6alesApplication over the lot, possessor rights over %hich, %ere mortgagedto it.

E#hibit "A" ;eal Estate 7ortgage> %as registered nder the 2rovisionsof Act ** %ith the egistr of &eeds of Hambales on November '*,)(4).

@n 7a ', )(4*, plaintiffs secred an additional loan from defendant2rdential Ban+ in the sm of 2'3,333.33. To secre pament of thisadditional loan, plaintiffs e#ected in favor of the said defendantanother deed of eal Estate 7ortgage over the same propertiespreviosl mortgaged in E#hibit "A." ;E#hibit "B9" also E#hibit "'" fordefendant>. This second deed of eal Estate 7ortgage %as li+e%ise

registered %ith the egistr of &eeds, this time in @longapo Cit, on7a ', )(4*.

@n April ', )(4*, the 6ecretar of Agricltre issed 7iscellaneos 6ales 2atentNo. 44 over the parcel of land, possessor rights over %hich %ere mortgaged todefendant 2rdential Ban+, in favor of plaintiffs. @n the basis of the aforesaid2atent, and pon its transcription in the egistration Boo+ of the 2rovince ofHambales, @riginal Certificate of Title No. 2-' %as issed in the name of 2laintiffFernando 7agcale, b the E#-@ficio egister of &eeds of Hambales, on 7a ),)(4'.

For failre of plaintiffs to pa their obligation to defendant Ban+ after it becamede, and pon application of said defendant, the deeds of eal Estate 7ortgage;E#hibits "A" and "B"> %ere e#tra0diciall foreclosed. Conse!ent to the foreclosre%as the sale of the properties therein mortgaged to defendant as the highest bidderin a pblic action sale condcted b the defendant Cit 6heriff on April )', )(41;E#hibit "E">. The action sale aforesaid %as held despite %ritten re!est fromplaintiffs throgh consel dated 7arch '(, )(41, for the defendant Cit 6heriff todesist from going %ith the schedled pblic action sale ;E#hibit "&">."

espondent Cort, in a &ecision dated November *, )(41 declared the deeds of eal Estate7ortgage as nll and void,


10/78

@n &ecember ), )(41, petitioner filed a 7otion for econsideration, opposed b privaterespondents on anar , )(4(, and in an @rder dated anar )3, )(4(, the 7otion foreconsideration %as denied for lac+ of merit. ?ence, the instant petition.

The first &ivision of this Cort, in a esoltion dated 7arch (, )(4(, resolved to re!ire therespondents to comment, %hich order %as complied %ith the esoltion dated 7a )1, )(4(,petitioner filed its epl on ne ', )(4(.

Thereafter, in the esoltion dated ne )*, )(4(, the petition %as given de corse and theparties %ere re!ired to sbmit simltaneosl their respective memoranda.

@n l )1, )(4(, petitioner filed its 7emorandm, %hile private respondents filed their7emorandm on Agst ), )(4(.

$n a esoltion dated Agst )3, )(4(, this case %as considered sbmitted for decision.

$n its 7emorandm, petitioner raised the follo%ing isses5

). :?ET?E @ N@T T?E &EE&6 @F EA8 E6TATE 7@TAE AE A8$&9 AN&

'. :?ET?E @ N@T T?E 6/2EEN$N $66/ANCE $N FA@ @F 2$ATE E62@N&ENT6 @F7$6CE88ANE@/6 6A8E6 2ATENT N@. 44 @N A2$8 ', )(4' /N&E ACT N@. 4*3 AN& T?EC@E$N @$$NA8 CET$F$CATE @F T$T8E N@. 2-' @N 7AI ),)(4' ?AE T?E EFFECT @F$NA8$&AT$N T?E &EE&6 @F EA8 E6TATE 7@TAE. ;7emorandm for 2etitioner, ollo, p.)''>.

This petition is impressed %ith merit.

The pivotal isse in this case is %hether or not a valid real estate mortgage can be constittedon the bilding erected on the land belonging to another.

The ans%er is in the affirmative.

$n the enmeration of properties nder Article ) of the Civil Code of the 2hilippines, this Cortrled that, "it is obvios that the inclsion of "bilding" separate and distinct from the land, insaid provision of la% can onl mean that a bilding is b itself an immovable propert." ;8opeDvs. @rosa, r., et al., 8-)31)4-)1, Feb. '1, )(19 Associated $nc. and 6ret Co., $nc. vs. $a, etal., 8-)31*4-*1, 7a *3,)(1>.

Ths, %hile it is tre that a mortgage of land necessaril incldes, in the absence of stiplationof the improvements thereon, bildings, still a bilding b itself ma be mortgaged apart fromthe land on %hich it has been bilt. 6ch a mortgage %old be still a real estate mortgage for

the bilding %old still be considered immovable propert even if dealt %ith separatel and apartfrom the land ;8eng Iee vs. 6trong 7achiner Co., *4 2hil. >. $n the same manner, thisCort has also established that possessor rights over said properties before title is vested onthe grantee, ma be validl transferred or conveed as in a deed of mortgage ;da. de Batistavs. 7arcos, * 6CA *1 .

Coming bac+ to the case at bar, the records sho%, as aforestated that the original mortgagedeed on the '-store semi-concrete residential bilding %ith %arehose and on the right ofoccpanc on the lot %here the bilding %as erected, %as e#ected on November )(, )(4) andregistered nder the provisions of Act ** %ith the egister of &eeds of Hambales onNovember '*, )(4). 7iscellaneos 6ales 2atent No. 44 on the land %as issed on April ',


11/78

)(4', on the basis of %hich @CT No. ' %as issed in the name of private respondentFernando 7agcale on 7a ), )(4'. $t is therefore %ithot !estion that the original mortgage%as e#ected before the issance of the final patent and before the government %as divested ofits title to the land, an event %hich ta+es effect onl on the issance of the sales patent and itssbse!ent registration in the @ffice of the egister of &eeds ;isaan ealt $nc. vs. 7eer, (2hil. )9 &irector of 8ands vs. &e 8eon, ))3 2hil. '19 &irector of 8ands vs. rado, 8-)43',7a '*, )()9 2ena "8a% on Natral esorces", p. (>. /nder the foregoing considerations, it isevident that the mortgage e#ected b private respondent on his o%n bilding %hich %as

erected on the land belonging to the government is to all intents and prposes a valid mortgage.

As to restrictions e#pressl mentioned on the face of respondents @CT No. 2-', it %ill benoted that 6ections )'), )'' and )' of the 2blic 8and Act, refer to land alread ac!irednder the 2blic 8and Act, or an improvement thereon and therefore have no application to theassailed mortgage in the case at bar %hich %as e#ected before sch eventalit. 8i+e%ise,6ection ' of epblic Act No. 4*3, also a restriction appearing on the face of privaterespondents title has li+e%ise no application in the instant case, despite its reference toencmbrance or alienation before the patent is issed becase it refers specificall toencmbrance or alienation on the land itself and does not mention anthing regarding theimprovements e#isting thereon.

Bt it is a different matter, as regards the second mortgage e#ected over the same propertieson 7a ', )(4* for an additional loan of 2'3,333.33 %hich %as registered %ith the egistr of&eeds of @longapo Cit on the same date. elative thereto, it is evident that sch mortgagee#ected after the issance of the sales patent and of the @riginal Certificate of Title, fallss!arel nder the prohibitions stated in 6ections )'), )'' and )' of the 2blic 8and Act and6ection ' of epblic Act 4*3, and is therefore nll and void.

2etitioner points ot that private respondents, after phsicall possessing the title for five ears,volntaril srrendered the same to the ban+ in )(44 in order that the mortgaged ma beannotated, %ithot re!iring the ban+ to get the prior approval of the 7inistr of Natraesorces beforehand, thereb implicitl athoriDing 2rdential Ban+ to case the annotation of

said mortgage on their title.

?o%ever, the Cort, in recentl rling on violations of 6ection )' %hich refers to 6ections ))1,)'3, )'' and )'* of Common%ealth Act )), has held5

... Nonetheless, %e appl or earlier rlings becase %e believe that as in paridelictoma not be invo+ed to defeat the polic of the 6tate neither ma thedoctrine of estoppel give a validating effect to a void contract. $ndeed, it isgenerall considered that as bet%een parties to a contract, validit cannot be givento it b estoppel if it is prohibited b la% or is against pblic polic ;)( Am. r.13'>. $t is not %ithin the competence of an citiDen to barter a%a %hat pblic

polic b la% %as to preserve ;onDalo 2at J 6ons, $nc. vs. &e los Amas andAlino supra>. ... ;Arsenal vs. $AC, )* 6CA .

This prononcement covers onl the previos transaction alread allded to and does not passpon an ne% contract bet%een the parties ;Ibid>, as in the case at bar. $t shold not precldene% contracts that ma be entered into bet%een petitioner ban+ and private respondents thatare in accordance %ith the re!irements of the la%. After all, private respondents themselvesdeclare that the are not dening the legitimac of their debts and appear to be open to ne%negotiations nder the la% ;Comment9 ollo, pp. (-(>. An ne% transaction, ho%ever, %oldbe sb0ect to %hatever steps the overnment ma ta+e for the reversion of the land in its favor.


12/78

2E7$6E6 C@N6$&EE&, the decision of the Cort of First $nstance of Hambales J @longapo Citis hereb 7@&$F$E&, declaring that the &eed of eal Estate 7ortgage for 243,333.33 is valid btrling that the &eed of eal Estate 7ortgage for an additional loan of 2'3,333.33 is nll andvoid, %ithot pre0dice to an appropriate action the overnment ma ta+e against privaterespondents.

6@ @&EE&.

EN BANC

G.R. No. L-18>56 No?eber 2), 1962

CONRA3O ". NAARRO,plaintiff-appellee,vs.RUF!NO G. "!NE3A, RAMONA REYES, ET AL.,defendants-appellants.

"ARE3ES, J.:

@n &ecember ), )((, defendants fino . 2ineda and his mother ana onDales ;married toregorio 2ineda>, borro%ed from plaintiff Conrado 2. Navarro, the sm of 2',33.33, paable months after said date or on ne ), )((. To secre the indebtedness, fino e#ected adocment captioned "&EE& @F EA8 E6TATE and C?ATTE8 7@TAE6", %hereb anaonDales, b %a of eal !state Mortgage hpothecated a parcel of land, belonging to herregistered %ith the egister of &eeds of Tarlac, nder Transfer Certificate of Title No. '44, andfino . 2ineda, by way of Chattel Mortgage, mortgaged his t%o-stor residential hose, havinga floor area of ()' s!are meters, erected on a lot belonging to Att. icente Castro, located atBo. 6an o!e, Tarlac, Tarlac9 and one motor trc+, registered in his name, nder 7otor ehicleegistration Certificate No. A-)4)13. Both mortgages %ere contained in one instrment, %hich%as registered in both the @ffice of the egister of &eeds and the 7otor ehicles @ffice of Tarlac.

:hen the mortgage debt became de and paable, the defendants, after demands made onthem, failed to pa. The, ho%ever, as+ed and %ere granted e#tension p to ne *3, )(3,%ithin %hich to pa. Came ne *3, defendants again failed to pa and, for the second time,as+ed for another e#tension, %hich %as given, p to l *3, )(3. $n the second e#tension,defendant 2ineda in a docment entitled "2romise", categoricall stated that in the remote eventhe shold fail to ma+e good the obligation on sch date ;l *3, )(3>, the defendant %old nolonger as+ for frther e#tension and there %old be no need for an formal demand, and plaintiffcold proceed to ta+e %hatever action he might desire to enforce his rights, nder the said

mortgage contract. $n spite of said promise, defendants, failed and refsed to pa the obligation.

@n Agst )3, )(3, plaintiff filed a complaint for foreclosre of the mortgage and for damages,%hich consisted of li!idated damages in the sm of 233.33 and )'K per annm interest onthe principal, effective on the date of matrit, ntil fll paid.

&efendants, ans%ering the complaint, among others, stated G

&efendants admit that the loan is overde bt den that portion of paragraph of theFirst Case of Action %hich states that the defendants nreasonabl failed and refse topa their obligation to the plaintiff the trth being the defendants are hard p these das


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and pleaded to the plaintiff to grant them more time %ithin %hich to pa their obligationand the plaintiff refsed9

:?EEF@E, in vie% of the foregoing it is most respectfll praed that this ?onorableCort render 0dgment granting the defendants ntil anar *), )(), %ithin %hich topa their obligation to the plaintiff.

@n 6eptember *3, )(3, plaintiff presented a 7otion for smmar dgment, claiming that the

Ans%er failed to tender an genine and material isse. The motion %as set for hearing, bt therecord is not clear %hat rling the lo%er cort made on the said motion. @n November )), )(3,ho%ever, the parties sbmitted a 6tiplation of Facts, %herein the defendants admitted theindebtedness, the athenticit and de e#ection of the eal Estate and Chattel 7ortgages9 thatthe indebtedness has been de and npaid since ne ), )(39 that a liabilit of )'K perannm as interest %as agreed, pon failre to pa the principal %hen de and 233.33 asli!idated damages9 that the instrment had been registered in the egistr of 2ropert and7otor ehicles @ffice, both of the province of Tarlac9 that the onl isse in the case is %hether ornot the residential hose, sb0ect of the mortgage therein, can be considered a Chattel and thepropriet of the attornes fees.

@n Febrar ', )(), the lo%er cort held G

... :?EEF@E, this Cort renders decision in this Case5

;a> &ismissing the complaint %ith regard to defendant regorio 2ineda9

;b> @rdering defendants ana onDales and the sposes fino 2ineda and amonees, to pa 0ointl and severall and %ithin ninet ;(3> das from the receipt of thecop of this decision to the plaintiff Conrado 2. Navarro the principal sm of 2',3.33%ith )'K componded interest per annm from ne ), )(3, ntil said principal smand interests are fll paid, pls 233.33 as li!idated damages and the costs of this sit,%ith the %arning that in defalt of said pament of the properties mentioned in the deed

of real estate mortgage and chattel mortgage ;Anne# "A" to the complaint> be sold torealiDe said mortgage debt, interests, li!idated damages and costs, in accordance %iththe pertinent provisions of Act *)*, as amended b Act ))1, and Art. ) of the Chattel7ortgage 8a%, Act )319 and

;c> @rdering the defendants fino 2ineda and amona ees, to deliver immediatel tothe 2rovincial 6heriff of Tarlac the personal properties mentioned in said Anne# "A",immediatel after the lapse of the ninet ;(3> das above-mentioned, in defalt of schpament.

The above 0dgment %as directl appealed to this Cort, the defendants therein assigning onl a

single error, allegedl committed b the lo%er cort, to %it G

$n holding that the deed of real estate and chattel mortgages appended to the complaintis valid, not%ithstanding the fact that the hose of the defendant fino . 2ineda %asmade the sb0ect of the chattel mortgage, for the reason that it is erected on a land thatbelongs to a third person.

Appellants contend that article ) of the Ne% Civil Code, in classifing a hose as immovablepropert, ma+es no distinction %hether the o%ner of the land is or not the o%ner of the bilding9the fact that the land belongs to another is immaterial, it is enogh that the hose adheres tothe land9 that in case of immovables b incorporation, sch as hoses, trees, plants, etc9 the


14/78

Code does not re!ire that the attachment or incorporation be made b the o%ner of the land,the onl criterion being the nion or incorporation %ith the soil. $n other %ords, it is claimed that"a bilding is an immovable propert, irrespective of %hether or not said strctre and the landon %hich it is adhered to, belong to the same o%ner" ;8opeD v. @rosa, .. Nos. 8-)31)4-1, Feb.'1, )(1>. ;6ee also the case of 8eng Iee v. 6trong 7achiner Co., *4 2hil. >. Appellantsarge that since onl movables can be the sb0ect of a chattel mortgage ;sec. ), Act No. *('>then the mortgage in !estion %hich is the basis of the present action, cannot give rise to anaction for foreclosre, becase it is nllit. ;Citing Associated $ns. Co., et al. v. $sabel $a v.

Adriano alino, et al., 8-)31*1, 7a *3, )(1.>

The trial cort did not predicate its decision declaring the deed of chattel mortgage valid solelon the grond that the hose mortgaged %as erected on the land %hich belonged to a thirdperson, bt also and principall on the doctrine of estoppel, in that "the parties have soe"pressly agreed" in the mortgage to consider the hose as chattel "for its smallness and mi#edmaterials of sawali and %ood". $n constring arts. ** and ** of the 6panish Civil Code;corresponding to arts. ) and ), N.C.C.>, for prposes of the application of the Chattel7ortgage 8a%, it %as held that nder certain conditions, "a propert ma have a characterdifferent from that impted to it in said articles. $t is ndeniable that the parties to a contractma by agreement# treat as personal property that whichb natre %old be real propert";6tandard @il Co. of N.I. v. aranillo, 2hil. *'-**>."There can not be an !estion that abilding of mi#ed materials ma be the sb0ect of a chattel mortgage, in %hich case, it isconsidered as bet%een the parties as personal propert. ... The matter depends on thecircmstances and the intention of the parties". "2ersonal propert ma retain its character assch %here it is so agreed b the parties interested even thogh anne#ed to the realt ...". ;'Am. r. '3(-')3, cited in 7anarang, et al. v. @filada, et al., .. No. 8-1)**, 7a )1, )(9 '@.. No. 1, p. *(.> The vie% that parties to a deed of chattel mortgagee ma agree toconsider a hose as personal propert for the prposes of said contract, "is good onl insofar asthe contracting parties are concerned. $t is based partl, pon the principles of estoppel ...";Evangelista v. Alto 6ret, No. 8-)))*(, Apr. '*, )(1>. $n a case, a mortgage hose bilt on arented land, %as held to be a personal propert, not onl becase the deed of mortgageconsidered it as sch, bt also becase it did not form part of the land ;Evangelista v. Abad

. ?ence, if a hose belonging to a person stands on a rented landbelonging to another person, it ma be mortgaged as a personal propert is so stiplated in thedocment of mortgage. ;Evangelista v. Abad, supra.> $t shold be noted, ho%ever, that theprinciple is predicated on statements b the o%ner declaring his hose to be a chattel, a condctthat ma conceivabl estop him from sbse!entl claiming other%ise ;8adera, et al.. v. C. N.?odges, et al., . The doctrine, therefore, gathered from these cases is thatalthogh in some instances, a hose of mi#ed materials has been considered as a chattebet%een them, has been recogniDed, it has been a constant criterion nevertheless that, %ith

respect to third persons, %ho are not parties to the contract, and speciall in e#ectionproceedings, the hose is considered as an immovable propert ;Art. )*), Ne% Civil Code>.

$n the case at bar, the hose in !estion %as treated as personal or movable propert, b theparties to the contract themselves. $n the deed of chattel mortgage, appellant fino . 2inedaconveed b %a of "Chattel 7ortgage" "m personal properties", a residential hose and atrc+. The mortgagor himself groped the hose %ith the trc+, %hich is, inherentl a movablepropert. The hose %hich %as not even declared for ta#ation prposes %as small and made oflight constrction materials5 .$. sheets roofing, sawaliand %ooden %alls and %ooden posts9bilt on land belonging to another.


15/78

The cases cited b appellants are not applicable to the present case. The $a cases ;8-)31*4-*1,supra>, refer to a bilding or a hose of strong materials, permanentl adhered to the land,belonging to the o%ner of the hose himself. $n the case of Lope$ v. %rosa, ;8-)31)4-)1>, thesb0ect bilding %as a theatre, bilt of materials %orth more than 2',333, attachedpermanentl to the soil. $n these cases and in the 8eng Iee case, supra, third persons assailedthe validit of the deed of chattel mortgages9 in the present case, it %as one of the parties tothe contract of mortgages %ho assailed its validit.

C@NF@7AB8I :$T? A88 T?E F@E@$N, the decision appealed from, shold be, as it ishereb affirmed, %ith costs against appellants.

EN BANC

G.R. No. L-+)2+9 Mar7 16, 19+2

TE STAN3AR3 O!L COM"ANY OF NE& YORK,petitioner,vs.%OAU!N %ARAM!LLO, a( re0(er o $ee$( o e Cy o Ma#:a,respondent.

STREET, J.:

This case is before s pon demrrer interposed b the respondent, oa!in aramillo, registerof deeds of the Cit of 7anila, to an original petition of the 6tandard @il Compan of Ne% Ior+,see+ing a peremptor mandamusto compel the respondent to record in the proper register adocment prporting to be a chattel mortgage e#ected in the Cit of 7anila b ervasia de laosa, da. de era, in favor of the 6tandard @il Compan of Ne% Ior+.

$t appears from the petition that on November '4, )('', ervasia de la osa, da. de era, %asthe lessee of a parcel of land sitated in the Cit of 7anila and o%ner of the hose of strongmaterials bilt thereon, pon %hich date she e#ected a docment in the form of a chattelmortgage, prporting to conve to the petitioner b %a of mortgage both the leasehold interestin said lot and the bilding %hich stands thereon.

The clases in said docment describing the propert intended to be ths mortgage aree#pressed in the follo%ing %ords5

No%, therefore, the mortgagor hereb conves and transfer to the mortgage, b %a ofmortgage, the follo%ing described personal propert, sitated in the Cit of 7anila, andno% in possession of the mortgagor, to %it5

;)> All of the right, title, and interest of the mortgagor in and to the contract of leasehereinabove referred to, and in and to the premises the sb0ect of the said lease9

;'> The bilding, propert of the mortgagor, sitated on the aforesaid leased premises.

After said docment had been dl ac+no%ledge and delivered, the petitioner cased the sameto be presented to the respondent, oa!in aramillo, as register of deeds of the Cit of 7anila,


16/78

for the prpose of having the same recorded in the boo+ of record of chattel mortgages. /pone#amination of the instrment, the respondent %as of the opinion that it %as not a chattelmortgage, for the reason that the interest therein mortgaged did not appear to be personalpropert, %ithin the meaning of the Chattel 7ortgage 8a%, and registration %as refsed on thisgrond onl.

:e are of the opinion that the position ta+en b the respondent is ntenable9 and it is his dtto accept the proper fee and place the instrment on record. The dties of a register of deeds in

respect to the registration of chattel mortgage are of a prel ministerial character9 and noprovision of la% can be cited %hich confers pon him an 0dicial or !asi-0dicial po%er todetermine the natre of an docment of %hich registration is soght as a chattel mortgage.

The original provisions toching this matter are contained in section ) of the Chattel 7ortgage8a% ;Act No. )31>, as amended b Act No. '(9 bt these have been transferred to section)(1 of the Administrative Code, %here the are no% fond. There is nothing in an of theseprovisions conferring pon the register of deeds an athorit %hatever in respect to the"!alification," as the term is sed in 6panish la%, of chattel mortgage. ?is dties in respect tosch instrments are ministerial onl. The efficac of the act of recording a chattel mortgageconsists in the fact that it operates as constrctive notice of the e#istence of the contract, andthe legal effects of the contract mst be discovered in the instrment itself in relation %ith thefact of notice. egistration adds nothing to the instrment, considered as a sorce of title, andaffects nobods rights e#cept as a specifies of notice.

Articles ** and ** of the Civil Code sppl no absolte criterion for discriminating bet%eenreal propert and personal propert for prpose of the application of the Chattel 7ortgage 8a%.Those articles state rles %hich, considered as a general doctrine, are la% in this 0risdiction9 btit mst not be forgotten that nder given conditions propert ma have character different fromthat impted to it in said articles. $t is ndeniable that the parties to a contract ma bagreement treat as personal propert that %hich b natre %old be real propert9 and it is afamiliar phenomenon to see things classed as real propert for prposes of ta#ation %hich ongeneral principle might be considered personal propert. @ther sitations are constantl arising,

and from time to time are presented to this cort, in %hich the proper classification of one thingor another as real or personal propert ma be said to be dobtfl.

The point sbmitted to s in this case %as determined on 6eptember 1, )(), in anadministrative rling promlgated b the ?onorable ames A. @strand, no% a stice of thisCort, bt acting at that time in the capacit of dge of the forth branch of the Cort of First$nstance of the Ninth dicial &istrict, in the Cit of 7anila9 and little of vale can be here addedto the observations contained in said rling. :e accordingl !ote therefrom as follo%s5

$t is nnecessar here to determine %hether or not the propert described in thedocment in !estion is real or personal9 the discssion ma be confined to the point as

to %hether a register of deeds has athorit to den the registration of a docmentprporting to be a chattel mortgage and e#ected in the manner and form prescribed bthe Chattel 7ortgage 8a%.

Then, after !oting section of the Chattel 7ortgage 8a% ;Act No. )31>, his ?onor contined5

Based principall pon the provisions of section !oted the Attorne-eneral of the2hilippine $slands, in an opinion dated Agst )), )(3(, held that a register of deeds hasno athorit to pass pon the capacit of the parties to a chattel mortgage %hich ispresented to him for record.& fortioria register of deeds can have no athorit to passpon the character of the propert soght to be encmbered b a chattel mortgage. @f


17/78

corse, if the mortgaged propert is real instead of personal the chattel mortgage %oldno dobt be held ineffective as against third parties, bt this is a !estion to bedetermined b the corts of 0stice and not b the register of deeds.

$n Leung Yee vs. 'ran( L. Strong Machinery Co. and )illiamson;*4 2hil., >, this cort heldthat %here the interest conveed is of the natre of real, propert, the placing of the docmenton record in the chattel mortgage register is a ftile act9 bt that decision is not decisive of the!estion no% before s, %hich has reference to the fnction of the register of deeds in placing

the docment on record.

$n the light of %hat has been said it becomes nnecessar for s to pass pon the point %hetherthe interests conveed in the instrment no% in !estion are real or personal9 and %e declare itto be the dt of the register of deeds to accept the estimate placed pon the docment b thepetitioner and to register it, pon pament of the proper fee.

The demrrer is overrled9 and nless %ithin the period of five das from the date of thenotification hereof, the respondent shall interpose a sfficient ans%er to the petition, the %rit ofmandamus%ill be issed, as praed, bt %ithot costs. 6o ordered.

EN BANC

G.R. No. L-16+18 No?eber +9, 196+

ANTON!A 4!CERRA, 3OM!NGO 4!CERRA, 4ERNAR3O 4!CERRA, CAYETANO 4!CERRA

L!N3A 4!CERRA, "!O 4!CERRA a#$ EUFR!C!NA 4!CERRA, plaintiffs-appellants,

vs.TOMASA TENEA a#$ 4EN%AM!N 4AR4OSA,defendants-appellees.

MAKAL!NTAL, J.:

This case is before s on appeal from the order of the Cort of First $nstance of Abra dismissingthe complaint filed b appellants, pon motion of defendants-appellate on the grond that theaction %as %ithin the e#clde ;original> 0risdiction of the stice of the 2eace Cort of8agangilang, of the same province.

The complaint alleges in sbstance that appellants %ere the o%ners of the hose, %orth

2'33.33, bilt on and o%ned b them and sitated in the said mnicipalit 8agangilang9 thatsometime in anar )(4 appealed forcibl demolished the hose, claiming to be the o%nersthereof9 that the materials of the hose, after it %as dismantled, %ere placed in the cstod ofthe barrio lietenant of the place9 and that as a reslt of appellates refsal to restore the hoseor to deliver the material appellants the latter have sffered actal damages the amont of2'33.33, pls moral and conse!ential damages in the amont of 233.33. The relief praed foris that "the plaintiffs be declared the o%ners of the hose in !estion andLor the materials thatreslted in ;sic> its dismantling9 ;and> that the defendants be orders pa the sm of 2'33.33,pls 233.33 as damages, the costs."


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The isse posed b the parties in this appeal is %hether the action involves title to real propert,as appellants contend, and therefore is cogniDable b the Cort of First $nstance ;6ec. , par)

The dismissal of the complaint %as proper. A hose is classified as immovable propert breason of its adherence to the soil on %hich it is bilt ;Art. ), par. ), Civil Code>. This

classification holds tre regardless of the fact that the hose ma be sitated on land belongingto a different o%ner. Bt once the hose is demolished, as in this case, it ceases to e#ist as schand hence its character as an immovable li+e%ise ceases. $t shold be noted that the complainthere is for recover of damages. This is the onl positive relief praed for b appellants. To besre, the also as+ed that the be declared o%ners of the dismantled hose andLor of thematerials. ?o%ever, sch declaration in no %ise constittes the relief itself %hich if granted bfinal 0dgment cold be enforceable b e#ection, bt is onl incidental to the real case ofaction to recover damages.

The order appealed from is affirmed. The appeal having been admitted informa pauperis, nocosts are ad0dged.

EN BANC

G.R. No. L-1522> %a#uary 21, 196>

4OAR3 OF ASSESSMENT A""EALS, C!TY ASSESSOR a#$ C!TY TREASURER OF UEON

C!TY, petitioners,vs.MAN!LA ELECTR!C COM"ANY,respondent.

"ARE3ES, J.:

From the stiplation of facts and evidence addced dring the hearing, the follo%ing appear5

@n @ctober '3, )(3', the 2hilippine Commission enacted Act No. 1 %hich athoriDed the7nicipal Board of 7anila to grant a franchise to constrct, maintain and operate an electricstreet rail%a and electric light, heat and po%er sstem in the Cit of 7anila and its sbrbs to

the person or persons ma+ing the most favorable bid. Charles 7. 6%ift %as a%arded the saidfranchise on 7arch )(3*, the terms and conditions of %hich %ere embodied in @rdinance No. approved on 7arch ', )(3*. espondent 7anila Electric Co. ;7eralco for short>, became thetransferee and o%ner of the franchise.

7eralcos electric po%er is generated b its hdro-electric plant located at Botocan Falls, 8agnaand is transmitted to the Cit of 7anila b means of electric transmission %ires, rnning fromthe province of 8agna to the said Cit. These electric transmission %ires %hich carr highvoltage crrent, are fastened to inslators attached on steel to%ers constrcted b respondentat intervals, from its hdro-electric plant in the province of 8agna to the Cit of 7anila. Therespondent 7eralco has constrcted 3 of these steel to%ers %ithin MeDon Cit, on land


19/78

belonging to it. A photograph of one of these steel to%ers is attached to the petition for revie%,mar+ed Anne# A. Three steel to%ers %ere inspected b the lo%er cort and parties and thefollo%ing %ere the descriptions given there of b said cort5

The first steel to%er is located in 6oth Tatalon, Espaa E#tension, MeDon Cit. Thefindings %ere as follo%s5 the grond arond one of the for posts %as e#cavated to adepth of abot eight ;1> feet, %ith an opening of abot one ;)> meter in diameterdecreased to abot a !arter of a meter as it %e deeper ntil it reached the bottom of the

post9 at the bottom of the post %ere t%o parallel steel bars attached to the leg means ofbolts9 the to%er proper %as attached to the leg three bolts9 %ith t%o cross metals toprevent mobilit9 there %as no concrete fondation bt there %as adobe stonenderneath9 as the bottom of the e#cavation %as covered %ith %ater abot three incheshigh, it cold not be determined %ith certaint to %hether said adobe stone %as placedprposel or not, as the place abonds %ith this +ind of stone9 and the to%er carried fivehigh voltage %ires %ithot cover or an inslating materials.

The second to%er inspected %as located in amning oad, -F, MeDon Cit, on lando%ned b the petitioner appro#imate more than one +ilometer from the first to%er. As inthe first to%er, the grond arond one of the for legs %as e#cavate from seven to eight;1> feet deep and one and a half ;)-O> meters %ide. There being ver little %ater at thebottom, it %as seen that there %as no concrete fondation, bt there soft adobe beneath.The leg %as li+e%ise provided %ith t%o parallel steel bars bolted to a s!are metal framealso bolted to each corner. 8i+e the first one, the second to%er is made p of metal rods

0oined together b means of bolts, so that b nscre%ing the bolts, the to%er cold bedismantled and reassembled.

The third to%er e#amined is located along amias oad, MeDon Cit. As in the first t%oto%ers given above, the grond arond the t%o legs of the third to%er %as e#cavated to adepth abot t%o or three inches beond the otside level of the steel bar fondation. $t%as fond that there %as no concrete fondation. 8i+e the t%o previos ones, the bottomarrangement of the legs thereof %ere fond to be resting on soft adobe, %hich, probabl

de to high hmidit, loo+s li+e md or cla. $t %as also fond that the s!are metalframe spporting the legs %ere not attached to an material or fondation.

@n November ), )(, petitioner Cit Assessor of MeDon Cit declared the aforesaid steelto%ers for real propert ta# nder Ta# declaration Nos. *)((' and )(. After deningrespondents petition to cancel these declarations, an appeal %as ta+en b respondent to theBoard of Assessment Appeals of MeDon Cit, %hich re!ired respondent to pa the amont of2)),).1 as real propert ta# on the said steel to%ers for the ears )(' to )(. espondentpaid the amont nder protest, and filed a petition for revie% in the Cort of Ta# Appeals ;CTAfor short> %hich rendered a decision on &ecember '(, )(1, ordering the cancellation of the saidta# declarations and the petitioner Cit Treasrer of MeDon Cit to refnd to the respondent the

sm of 2)),).1. The motion for reconsideration having been denied, on April '', )((, theinstant petition for revie% %as filed.

$n pholding the case of respondents, the CTA held that5 ;)> the steel to%ers come %ithin theterm "poles" %hich are declared e#empt from ta#es nder part $$ paragraph ( of respondentsfranchise9 ;'> the steel to%ers are personal properties and are not sb0ect to real propert ta#9and ;*> the Cit Treasrer of MeDon Cit is held responsible for the refnd of the amont paid.These are assigned as errors b the petitioner in the brief.

The ta# e#emption privilege of the petitioner is !oted herender5


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2A (. The grantee shall be liable to pa the same ta#es pon its real estate, bildings,plant ;not inclding poles, %ires, transformers, and inslators>, machiner and personalpropert as other persons are or ma be hereafter re!ired b la% to pa ... 6aidpercentage shall be de and paable at the time stated in paragraph nineteen of 2art @nehereof, ... and shall be in lieu of all ta"es and assessments of whatsoever nature and bywhatsoever authority upon the privileges# earnings# income# franchise# and poles, %ires,transformers, and inslators of the grantee from %hich ta#es and assessments thegrantee is hereby e"pressly e"empted. ;2ar. (, 2art T%o, Act No. 1 espondents

Franchise9 emphasis spplied.>

The %ord "pole" means "a long, comparativel slender sall clindrical piece of %ood ortimber, as tpicall the stem of a small tree stripped of its branches9 also b e#tension, a similartpicall clindrical piece or ob0ect of metal or the li+e". The term also refers to "an uprightstandard to the top of which something is affi"ed or by which something is supported9 as adovecote set on a pole9 telegraph poles9 a tent pole9 sometimes, specificall a vessels master;:ebsters Ne% $nternational &ictionar 'nd Ed., p. )(34.> Along the streets, in the Cit of7anila, ma be seen clindrical metal poles, cbical concrete poles, and poles of the 28&T Co.%hich are made of t%o steel bars 0oined together b an interlacing metal rod. The are called"poles" not%ithstanding the fact that the are no made of %ood. $t mst be noted fromparagraph (, above !oted, that the concept of the "poles" for %hich e#emption is granted, isnot determined b their place or location, nor b the character of the electric crrent it carries,nor the material or form of %hich it is made, bt the se to %hich the are dedicated. $naccordance %ith the definitions, pole is not restricted to a long clindrical piece of %ood or metal,bt incldes "pright standards to the top of %hich something is affi#ed or b %hich something isspported. As heretofore described, respondents steel spports consists of a frame%or+ of forsteel bars or strips %hich are bond b steel cross-arms atop of %hich are cross-arms spportingfive high voltage transmission %ires ;6ee Anne# A> and their sole fnction is to spport or carrsch %ires.

The conclsion of the CTA that the steel spports in !estion are embraced in the term "poles" isnot a novelt. 6everal corts of last resort in the /nited 6tates have called these steel spports

"steel to%ers", and the denominated these spports or to%ers, as electric poles. $n theirdecisions the %ords "to%ers" and "poles" %ere sed interchangeabl, and it is %ell nderstood inthat 0risdiction that a transmission to%er or pole means the same thing.

$n a proceeding to condemn land for the se of electric po%er %ires, in %hich the la% providedthat %ires shall be constrcted pon sitable poles, this term %as constred to mean either%ood or metal poles and in vie% of the land being sb0ect to overflo%, and the necessarcarring of nmeros %ires and the distance bet%een poles, the statte %as interpreted toinclde towersorpoles.

The term "poles" %as also sed to denominate the steel spports or to%ers sed b an

association sed to conve its electric po%er frnished to sbscribers and members, constrctedfor the prpose of fastening high voltage and dangeros electric %ires alongside pblichigh%as. The steel spports or to%ers %ere made of iron or other metals consisting of t%opieces rnning from the grond p some thirt feet high, being %ider at the bottom than at thetop, the said t%o metal pieces being connected %ith criss-cross iron rnning from the bottom tothe top, constrcted li+e ladders and loaded %ith high voltage electricit. $n form and strctre,the are li+e the steel to%ers in !estion.

The term "poles" %as sed to denote the steel to%ers of an electric compan engaged in thegeneration of hdro-electric po%er generated from its plant to the To%er of @#ford and Cit of:aterbr. These steel to%ers are abot ) feet s!are at the base and e#tended to a height of


21/78

abot * feet to a point, and are embedded in the cement fondations sn+ in the earth, the topof %hich e#tends above the srface of the soil in the to%er of @#ford, and to the to%ers areattached inslators, arms, and other e!ipment capable of carring %ires for the transmission ofelectric po%er ;Connectict 8ight and 2o%er Co. v. @#ford, )3) Conn. *1*, )' Atl. p. )>.

$n a case, the defendant admitted that the strctre on %hich a certain person met his death%as bilt for the prpose of spporting a transmission %ire sed for carring high-tensionelectric po%er, bt claimed that the steel to%ers on %hich it is carried %ere so large that their

%ire too+ their strctre ot of the definition of a pole line. $t %as held that in defining the %ordpole, one shold not be governed b the %ire or material of the spport sed, bt %asconsidering the danger from an elevated %ire carring electric crrent, and that regardless ofthe siDe or material %ire of its individal members, an continos series of strctres intendedand sed solel or primaril for the prpose of spporting %ires carring electric crrents is apole line ;$nspiration Consolidation Cooper Co. v. Bran '' 2. )3)>.

$t is evident, therefore, that the %ord "poles", as sed in Act No. 1 and incorporated in thepetitioners franchise, shold not be given a restrictive and narro% interpretation, as to defeatthe ver ob0ect for %hich the franchise %as granted. The poles as contemplated thereon, sholdbe nderstood and ta+en as a part of the electric po%er sstem of the respondent 7eralco, forthe conveance of electric crrent from the sorce thereof to its consmers. $f the respondent%old be re!ired to emplo "%ooden poles", or "ronded poles" as it sed to do fift earsbac+, then one shold admit that the 2hilippines is one centr behind the age of space. $tshold also be conceded b no% that steel to%ers, li+e the ones in !estion, for obvios reasons,can better effectate the prpose for %hich the respondents franchise %as granted.

ranting for the prpose of argment that the steel spports or to%ers in !estion are notembraced %ithin the term poles, the logical !estion posited is %hether the constitte realproperties, so that the can be sb0ect to a real propert ta#. The ta# la% does not provide for adefinition of real propert9 bt Article ) of the Civil Code does, b stating the follo%ing areimmovable propert5

;)> 8and, bildings, roads, and constrctions of all +inds adheredto the soil9

# # # # # # # # #

;*> Everthing attached to an immovable in a fi"ed manner, in sch a %a that it cannotbe separated therefrom %ithot brea+ing the material or deterioration of the ob0ect9

# # # # # # # # #

;> 7achiner, receptacles, instrments or implements intended b the o%ner of thetenement for an indstr or %or+s %hich ma be carried in a bilding or on a piece of

land, and %hich tends directl to meet the needs of the said indstr or %or+s9

# # # # # # # # #

The steel to%ers or spports in !estion, do not come %ithin the ob0ects mentioned in paragraph), becase the do not constitte bildings or constrctions adhered to the soil. The are notconstrction analogos to bildings nor adhering to the soil. As per description, given b thelo%er cort, the are removable and merel attached to a s!are metal frame b means ofbolts, %hich %hen nscre%ed cold easil be dismantled and moved from place to place. Thecan not be inclded nder paragraph *, as the are not attached to an immovable in a fi#edmanner, and the can be separated %ithot brea+ing the material or casing deterioration pon


22/78

the ob0ect to %hich the are attached. Each of these steel to%ers or spports consists of steelbars or metal strips, 0oined together b means of bolts, %hich can be disassembled bnscre%ing the bolts and reassembled b scre%ing the same. These steel to%ers or spports donot also fall nder paragraph , for the are not machineries, receptacles, instrments orimplements, and even if the %ere, the are not intended for indstr or %or+s on the land.2etitioner is not engaged in an indstr or %or+s in the land in %hich the steel spports orto%ers are constrcted.

$t is finall contended that the CTA erred in ordering the Cit Treasrer of MeDon Cit to refndthe sm of 2)),).1, despite the fact that MeDon Cit is not a part to the case. $t is argedthat as the Cit Treasrer is not the real part in interest, bt MeDon Cit, %hich %as not apart to the sit, not%ithstanding its capacit to se and be sed, he shold not be ordered toeffect the refnd. This !estion has not been raised in the cort belo%, and, therefore, it cannotbe properl raised for the first time on appeal. The herein petitioner is indlging in legatechnicalities and niceties %hich do not help him an9 for factall, it %as he ;Cit Treasrer>%hom had insisted that respondent herein pa the real estate ta#es, %hich respondent paidnder protest. ?aving acted in his official capacit as Cit Treasrer of MeDon Cit, he %oldsrel +no% %hat to do, nder the circmstances.

$N $E: ?EE@F, the decision appealed from is hereb affirmed, %ith costs against thepetitioners.

6EC@N& &$$6$@N

G.R. No. L->*9>2 May 21, 198+

MAN!LA ELECTR!C COM"ANY, petitioner,vs.CENTRAL 4OAR3 OF ASSESSMENT A""EALS, 4OAR3 OF ASSESSMENT A""EALS OF4ATANGAS a#$ "RO!NC!AL ASSESSOR OF 4ATANGAS, respondents.

AU!NO, J.:

This case is abot the imposition of the realt ta# on t%o oil storage tan+s installed in )(( b7anila Electric Compan on a lot in 6an 2ascal, Batangas %hich it leased in )(1 from Calte#;2hil.>, $nc. The tan+s are %ithin the Calte# refiner compond. The have a total capacit of

,333 barrels. The are sed for storing fel oil for 7eralcos po%er plants.

According to 7eralco, the storage tan+s are made of steel plates %elded and assembled on thespot. Their bottoms rest on a fondation consisting of compacted earth as the otermost laer, asand pad as the intermediate laer and a t%o-inch thic+ bitminos asphalt stratm as the toplaer. The bottom of each tan+ is in contact %ith the asphalt laer.

The steel sides of the tan+ are directl spported nderneath b a circlar %all made ofconcrete, eighteen inches thic+, to prevent the tan+ from sliding. ?ence, according to 7eralco,the tan+ is not attached to its fondation. $t is not anchored or %elded to the concrete circlar%all. $ts bottom plate is not attached to an part of the fondation b bolts, scre%s or similar


23/78

devices. The tan+ merel sits on its fondation. Each empt tan+ can be floated b flooding itsdi+e-inclosed location %ith %ater for feet deep. ;pp. '(-*3, ollo.>

@n the other hand, according to the hearing commissioners of the Central Board of AssessmentAppeals, the area %here the t%o tan+s are located is enclosed %ith earthen di+es %ith electricsteel poles on top thereof and is divided into t%o parts as the site of each tan+. The fondationof the tan+s is elevated from the remaining area. @n both sides of the earthen di+es are t%oseparate concrete steps leading to the fondation of each tan+.

Tan+ No. ' is spported b a concrete fondation %ith an asphalt lining abot an inch thic+.2ipelines %ere installed on the sides of each tan+ and are connected to the pipelines of the7anila Enterprises $ndstrial Corporation %hose bildings and pmping station are near Tan+ No.'.

The Board concldes that %hile the tan+s rest or sit on their fondation, the fondation itself andthe %alls, di+es and steps, %hich are integral parts of the tan+s, are affi#ed to the land %hile thepipelines are attached to the tan+s. ;pp. 3-), ollo.> $n )(43, the mnicipal treasrer ofBaan, Batangas, on the basis of an assessment made b the provincial assessor, re!ired7eralco to pa realt ta#es on the t%o tan+s. For the five-ear period from )(43 to )(4, the

ta# and penalties amonted to 2*),43*.( ;p. '4, ollo>. The Board re!ired 7eralco to pathe ta# and penalties as a condition for entertaining its appeal from the adverse decision of theBatangas board of assessment appeals.

The Central Board of Assessment Appeals ;composed of Acting 6ecretar of Finance 2edro 7.AlmanDor as chairman and 6ecretar of stice icente Abad 6antos and 6ecretar of 8ocalovernment and Commnit &evelopment ose oo as members> in its decision datedNovember , )(4 rled that the tan+s together %ith the fondation, %alls, di+es, steps,pipelines and other apprtenances constitte ta#able improvements.

7eralco received a cop of that decision on Febrar '1, )(44. @n the fifteenth da, it filed amotion for reconsideration %hich the Board denied in its resoltion of November ', )(44, a

cop of %hich %as received b 7eralco on Febrar '1, )(41.

@n 7arch ), )(41, 7eralco filed this special civil action of certiorari to annl the Boardsdecision and resoltion. $t contends that the Board acted %ithot 0risdiction and committed agrave error of la% in holding that its storage tan+s are ta#able real propert.

7eralco contends that the said oil storage tan+s do not fall %ithin an of the +inds of reapropert enmerated in article ) of the Civil Code and, therefore, the cannot be categoriDedas realt b natre, b incorporation, b destination nor b analog. 6tress is laid on the factthat the tan+s are not attached to the land and that the %ere placed on leased land, not on theland o%ned b 7eralco.

This is one of those highl controversial, borderline or penmbral cases on the classification ofpropert %here strong divergent opinions are inevitable. The isse raised b 7eralco has to beresolved in the light of the provisions of the Assessment 8a%, Common%ealth Act No. 43, andthe eal 2ropert Ta# Code, 2residential &ecree No. %hich too+ effect on ne ), )(4.

6ection ' of the Assessment 8a% provides that the realt ta# is de "on real propert, incldingland, bildings, machiner, and other improvements" not specificall e#empted in section *thereof. This provision is reprodced %ith some modification in the eal 2ropert Ta# Code %hichprovides5


24/78

6ec. *1. Incidence of eal *roperty +a". G The shall be levied, assessed andcollected in all provinces, cities and mnicipalities an annal ad valorem ta" on reapropert, sch as land, bildings, machiner and other improvements affi#ed orattached to real propert not hereinafter specificall e#empted.

The Code contains the follo%ing definition in its section *5

+> ImprovementsG is a valable addition made to propert or an amelioration in

its condition, amonting to more than mere repairs or replacement of %aste,costing labor or capital and intended to enhance its vale, beat or tilit or toadapt it for ne% or frther prposes.

:e hold that %hile the t%o storage tan+s are not embedded in the land, the ma, nevertheless,be considered as improvements on the land, enhancing its tilit and rendering it sefl to theoil indstr. $t is ndeniable that the t%o tan+s have been installed %ith some degree ofpermanence as receptacles for the considerable !antities of oil needed b 7eralco for itsoperations.

@il storage tan+s %ere held to be ta#able realt in 6tandard @il Co. of Ne% erse vs. Atlantic

Cit, ) Atl. 'nd '4).

For prposes of ta#ation, the term "real propert" ma inclde things %hich shold generall beregarded as personal propert;1 C..6. )4), Note 1>. $t is a familiar phenomenon to see thingsclassed as real propert for prposes of ta#ation %hich on general principle might be consideredpersonal propert ;6tandard @il Co. of Ne% Ior+ vs. aramillo, 2hil. *3, **>.

The case of Board of Assessment Appeals vs. 7anila Electric Compan, ))( 2hil. *'1, %herein7eralcos steel to%ers %ere held not to be sb0ect to realt ta#, is not in point becase in thatcase the steel to%ers %ere regarded as poles and nder its franchise 7eralcos poles are e#emptfrom ta#ation. 7oreover, the steel to%ers %ere not attached to an land or bilding. The %ereremovable from their metal frames.

Nor is there an parallelism bet%een this case and 7indanao Bs Co. vs. Cit Assessor, )) 2hil.3), %here the tools and e!ipment in the repair, carpentr and blac+smith shops of atransportation compan %ere held not sb0ect to realt ta# becase the %ere personal propert

:?EEF@E, the petition is dismissed. The Boards !estioned decision and resoltion areaffirmed. No costs.

6@ @&EE&.

EN BANC

G.R. No. L-+6+*8 Au0u( >, 19+*

LEON S!4AL ,plaintiff-appellant,vs.EM!L!ANO %. AL3E ET AL.,defendants.EM!L!ANO %. AL3E,appellee.


25/78

%ONSON, J.:

The action %as commenced in the Cort of First $nstance of the 2rovince of Tarlac on the )thda of &ecember )('. The facts are abot as conflicting as it is possible for facts to be, in thetrial cases.

As a first case of action the plaintiff alleged that the defendant italiano 7ama%al, deptsheriff of the 2rovince of Tarlac, b virte of a %rit of e#ection issed b the Cort of First

$nstance of 2ampanga, attached and sold to the defendant Emiliano . aldeD the sgar caneplanted b the plaintiff and his tenants on seven parcels of land described in the complaint in thethird paragraph of the first case of action9 that %ithin one ear from the date of the attachmentand sale the plaintiff offered to redeem said sgar cane and tendered to the defendant aldeDthe amont sfficient to cover the price paid b the latter, the interest thereon and anassessments or ta#es %hich he ma have paid thereon after the prchase, and the interestcorresponding thereto and that aldeD refsed to accept the mone and to retrn the sgar caneto the plaintiff.

As a second case of action, the plaintiff alleged that the defendant Emiliano . aldeD %asattempting to harvest the pala planted in for of the seven parcels mentioned in the first case

of action9 that he had harvested and ta+en possession of the pala in one of said seven parcelsand in another parcel described in the second case of action, amonting to *33 cavans9 andthat all of said pala belonged to the plaintiff.

2laintiff praed that a %rit of preliminar in0nction be issed against the defendant Emiliano .aldeD his attornes and agents, restraining them ;)> from distribting him in the possession ofthe parcels of land described in the complaint9 ;'> from ta+ing possession of, or harvesting thesgar cane in !estion9 and ;*> from ta+ing possession, or harvesting the pala in said parcelsof land. 2laintiff also praed that a 0dgment be rendered in his favor and against the defendantsordering them to consent to the redemption of the sgar cane in !estion, and that thedefendant aldeD be condemned to pa to the plaintiff the sm of 2),3 the vale of palaharvested b him in the t%o parcels above-mentioned ,%ith interest and costs.

@n &ecember '4, )(', the cort, after hearing both parties and pon approval of the bond for2,333 filed b the plaintiff, issed the %rit of preliminar in0nction praed for in the complaint.

The defendant Emiliano . aldeD, in his amended ans%er, denied generall and specificall eachand ever allegation of the complaint and step p the follo%ing defenses5

;a> That the sgar cane in !estion had the natre of personal propert and %as not,therefore, sb0ect to redemption9

;b> That he %as the o%ner of parcels ), ' and 4 described in the first case of action of

the complaint9

;c> That he %as the o%ner of the pala in parcels ), ' and 49 and

;d> That he never attempted to harvest the pala in parcels and .

The defendant Emiliano . aldeD b %a of conterclaim, alleged that b reason of thepreliminar in0nction he %as nable to gather the sgar cane, sgar-cane shoots ;puntas decana dulce> pala in said parcels of land, representing a loss to him of 21,*4.'3 and that, inaddition thereto, he sffered damages amonting to 2*,1.. ?e praed, for a 0dgment ;)>absolving him from all liabilit nder the complaint9 ;'> declaring him to be the absolte o%ner


26/78

of the sgar cane in !estion and of the pala in parcels ), ' and 49 and ;*> ordering theplaintiff to pa to him the sm of 2)),1**.4, representing the vale of the sgar cane andpala in !estion, inclding damages.

/pon the isses ths presented b the pleadings the case %as broght on for trial. Afterhearing the evidence, and on April '1, )(', the ?onorable Caetano 8+ban, 0dge, rendered a

0dgment against the plaintiff and in favor of the defendants G

;)> ?olding that the sgar cane in !estion %as personal propert and, as sch, %as notsb0ect to redemption9

;'> Absolving the defendants from all liabilit nder the complaint9 and

;*> Condemning the plaintiff and his sreties Cenon de la CrD, an 6angalang and7arcos 6ibal to 0ointl and severall pa to the defendant Emiliano . aldeD the sm of2(,*(.31 as follo%s5

;a> 2,44.3, the vale of the sgar cane9

;b> ),*.1, the vale of the sgar-cane shoots9

;c> .33, the vale of pala harvested b plaintiff9

;d> 33.33, the vale of )3 cavans of pala %hich the defendant %as not able toraise b reason of the in0nction, at 2 cavan. (,*(.31 From that 0dgment theplaintiff appealed and in his assignments of error contends that the lo%er corterred5 ;)> $n holding that the sgar cane in !estion %as personal propert and,therefore, not sb0ect to redemption9

;'> $n holding that parcels ) and ' of the complaint belonged to aldeD, as %ell as parcels4 and 1, and that the pala therein %as planted b aldeD9

;*> $n holding that aldeD, b reason of the preliminar in0nction failed to realiDed2,44.3 from the sgar cane and 2),*.1 from sgar-cane shoots ;pntas de canadlce>9

;> $n holding that, for failre of plaintiff to gather the sgar cane on time, the defendant%as nable to raise pala on the land, %hich %old have netted him the sm of 2339and.

;> $n condemning the plaintiff and his sreties to pa to the defendant the sm of2(,*(.31.

$t appears from the record5

;)> That on 7a )), )('*, the dept sheriff of the 2rovince of Tarlac, b virte of %rit ofe#ection in civil case No. '3'3* of the Cort of First $nstance of 7anila ;7acondra JCo., $nc. vs.8eon 6ibal>,levied an attachment on eight parcels of land belonging to said8eon 6ibal, sitated in the 2rovince of Tarlac, designated in the second of attachment asparcels ), ', *, , , , 4 and 1 ;E#hibit B, E#hibit '-A>.


27/78

;'> That on l *3, )('*, 7acondra J Co., $nc., boght said eight parcels of land, at theaction held b the sheriff of the 2rovince of Tarlac, for the sm to 2,'4*.(*, having paidfor the said parcels separatel as follo%s ;E#hibit C, and '-A>5

2arcel

) ..................................................................... 2).33

' ..................................................................... ',333.33

* ..................................................................... )'3.(*

..................................................................... ),333.33

..................................................................... ).33

..................................................................... ).33

4 %ith the hose thereon .......................... )3.33

1 ..................................................................... ),333.33

PPPPPPPPPP

,'4*.(*

;*> That %ithin one ear from the sale of said parcel of land, and on the 'th da of6eptember, )('*, the 0dgment debtor, 8eon 6ibal, paid 2',333 to 7acondra J Co., $nc.,for the accont of the redemption price of said parcels of land, %ithot specifing theparticlar parcels to %hich said amont %as to applied. The redemption price said eightparcels %as redced, b virte of said transaction, to 2',4(.(4 inclding interest ;E#hibitC and '>.

The record frther sho%s5

;)> That on April '(, )(', the defendant italiano 7ama%al, dept sheriff of the2rovince of Tarlac, b virte of a %rit of e#ection in civil case No. )*3) of the 2rovince of2ampanga ;Emiliano . aldeD vs.8eon 6ibal ).

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