U.

S VS Tambunting
Court of First Instance of the city of Manila, finding the accused, Manuel Tambunting,
guilty of stealing a quantity of gas belonging to the Manila Gas Corporation, and
sentencing him to undergo imprisonment. The evidence submitted in behalf of the
prosecution shows that the accused and his wife became occupants of the upper
floor of the house situated Calle Evangelista, in the city of Manila. In this house the
Manila Gas Corporation had previously installed apparatus for the delivery of gas on
both the upper and lower floors, consisting of the necessary piping and a gas meter.
When the occupants at whose request this installation had been made vacated the
premises, the gas company disconnected the gas pipe and removed the meter, thus
cutting off the supply of gas from said premises. one of the inspectors of the gas
company visited the house in question and found that gas was being used, without
the knowledge and consent of the gas company, Manuel Tambunting, was not at
home, but he presently arrived and admitted to the agent to the gas company that
he had made the connection with the rubber tubing between the gas pipe and the
stove, though he denied making the connection below. He also admitted that he
knew he was using gas without the knowledge of the company and that he had
been so using it for probably two or three months

Issue : whether gas can be the subject to larceny

Held: There is nothing in the nature of gas used for illuminating purposes which
renders it incapable of being feloniously taken and carried away. It is a valuable
article of merchandise, bought and sold like other personal property, susceptible of
being severed from a mass or larger quantity and of being transported from place to
place. Likewise water which is confined in pipes and electricity which is conveyed by
wires are subjects of larceny."

Laurel vs abrogar

Facts: PLDT alleges that one of the alternative calling patterns that constitute
network fraud and violate its network integrity is that which is known as
International Simple Resale (ISR). One such alternative calling service is that offered
by Baynet Co., Ltd. (Baynet) which sells "Bay Super Orient Card" phone cards to
people who call their friends and relatives in the Philippines. With said card, one is
entitled to a 27-minute call to the PhilippinesPLDT asserts that Baynet conducts its
ISR activities by utilizing an IPL to course its incoming international long distance

calls from Japan. The IPL is linked to switching equipment, which is then connected
to PLDT telephone lines/numbers and equipment, with Baynet as subscriber.
Through the use of the telephone lines and other auxiliary equipment, Baynet is
able to connect an international long distance call from Japan to any part of the
Philippines, and make it appear as a call originating from Metro Manila.
Consequently, the operator of an ISR is able to evade payment of access,
termination or bypass charges and accounting rates, as well as compliance with the
regulatory requirements of the NTC. Thus, the ISR operator offers international
telecommunication services at a lower rate, to the damage and prejudice of
legitimate operators like PLDT . RTC ruled that baynet ), did then and there willfully,
unlawfully and feloniously take, steal and use the international long distance calls
belonging to PLDT by conducting International Simple Resale (ISR) , thereafter
accused filed a motion to quash . on the ground that the factual allegations in the
Amended Information do not constitute the felony of theft under Article 308 of the
Revised Penal Code. He averred that the Revised Penal Code, or any other special
penal law for that matter, does not prohibit ISR operations. He claimed that
telephone calls with the use of PLDT telephone lines, whether domestic or
international, belong to the persons making the call, not to PLDT. He argued that the
caller merely uses the facilities of PLDT, and what the latter owns are the
telecommunication infrastructures or facilities through which the call is made. PLDT
contended that the movant took their personal property unlawfully. 1) intangible
telephone services that are being offered by PLDT and other telecommunication
companies, i.e., the connection and interconnection to their telephone
lines/facilities; 2) the use of those facilities over a period of time; and 3) the
revenues derived in connection with the rendition of such services and the use of
such facilities. The prosecution asserted that the use of PLDTs intangible telephone
services/facilities allows electronic voice signals to pass through the same, and
ultimately to the called partys number. It averred that such service/facility is akin to
electricity which, although an intangible property, may, nevertheless, be
appropriated and be the subject of theft. Such service over a period of time for a
consideration is the business that PLDT provides to its customers. The prosecution
further alleged that "international business calls and revenues constitute personal
property envisaged in Article 308 of the Revised Penal Code." Moreover, the
intangible telephone services/facilities belong to PLDT and not to the movant and
the other accused, because they have no telephone services and facilities of their
own duly authorized by the NTC; thus, the taking by the movant and his co-accused
of PLDT services was with intent to gain and without the latters consent. Thus, the
acts of the accused were akin to the use of a "jumper" by a consumer to deflect the
current from the house electric meter, thereby enabling one to steal electricity.
Laurel filed a Motion for Reconsideration 17 of the Order, alleging that international
long distance calls are not personal property, and are not capable of appropriation.
He maintained that business or revenue is not considered personal property, and
that the prosecution failed to adduce proof of its existence and the subsequent loss
of personal property belonging to another. the RTC denied the movants Motion for
Reconsideration. This time, it ruled that what was stolen from PLDT was its
"business" because, as alleged in the Amended Information, the international long
distance calls made through the facilities of PLDT formed part of its business. The

OSG maintains that the international long distance calls alleged in the amended
information should be construed to mean "business" of PLDT, which, while abstract
and intangible in form, is personal property susceptible of appropriation. 31 The OSG
avers that what was stolen by petitioner and his co-accused is the business of PLDT
providing international long distance calls which, though intangible, is personal
property of the PLDT. respondent PLDT asserts that personal property under Article
308 of the Revised Penal Code comprehends intangible property such as electricity
and gas which are valuable articles for merchandise, brought and sold like other
personal property, and are capable of appropriation. It insists that the business of
international calls and revenues constitute personal property because the same are
valuable articles of merchandise.

Issue : WON baynet is guilty of theft in the purview of art 308 of the RPC

Held : no , Gas and electrical energy should not be equated with business or
services provided by business entrepreneurs to the public. Business does not have
an exact definition. Business is referred as that which occupies the time, attention
and labor of men for the purpose of livelihood or profit. It embraces everything that
which a person can be employed.66 Business may also mean employment,
occupation or profession. Business is also defined as a commercial activity for gain
benefit or advantage.67 Business, like services in business, although are properties,
are not proper subjects of theft under the Revised Penal Code because the same
cannot be "taken" or "occupied." If it were otherwise, as claimed by the
respondents, there would be no juridical difference between the taking of the
business of a person or the services provided by him for gain, vis--vis, the taking of
goods, wares or merchandise, or equipment comprising his business. 68 If it was its
intention to include "business" as personal property under Article 308 of the Revised
Penal Code, the Philippine Legislature should have spoken in language that is clear
and definite: that business is personal property under Article 308 of the Revised
Penal Code. Respondent PLDT does not acquire possession, much less,
ownership of the voices of the telephone callers or of the electronic voice
signals or current emanating from said calls. The human voice and the
electronic voice signals or current caused thereby are intangible and not
susceptible of possession, occupation or appropriation by the respondent
PLDT or even the petitioner, for that matter. PLDT merely transmits the
electronic voice signals through its facilities and equipment. Baynet Card
Ltd., through its operator, merely intercepts, reroutes the calls and passes
them to its toll center. Indeed, the parties called receive the telephone
calls from Japan. Thus, movable properties under Article 308 of the Revised Penal
Code should be distinguished from the rights or interests to which they relate. A
naked right existing merely in contemplation of law, although it may be very
valuable to the person who is entitled to exercise it, is not the subject of theft or
larceny.

Berkenkotter VS cu unjieng

Facts: It is admitted by the parties that on April 26, 1926, the Mabalacat Sugar
Co., Inc., owner of the sugar central situated in Mabalacat, Pampanga, obtained
from the defendants, Cu Unjieng e Hijos, a loan secured by a first mortgage
constituted on two parcels and land "with all its buildings, improvements, sugarcane mill, steel railway, telephone line, apparatus, utensils and whatever forms part
or is necessary complement of said sugar-cane mill, steel railway, telephone line,
now existing or that may in the future exist is said lots." president of the Mabalacat
Sugar Co., Inc., applied to Cu Unjieng e Hijos for an additional loan of P75,000
offering as security the additional machinery and equipment acquired by said B.A.
Green and installed in the sugar central after the execution of the original mortgage
deed, on April 27, 1927, together with whatever additional equipment acquired with
said loan. B.A. Green failed to obtain said loan. The appellant contends that the
installation of the machinery and equipment claimed by him in the sugar central of
the Mabalacat Sugar Company, Inc., was not permanent in character inasmuch as
B.A. Green, in proposing to him to advance the money for the purchase thereof,
made it appear in the letter, Exhibit E, that in case B.A. Green should fail to obtain
an additional loan from the defendants Cu Unjieng e Hijos, said machinery and
equipment would become security therefor, said B.A. Green binding himself not to
mortgage nor encumber them to anybody until said plaintiff be fully reimbursed for
the corporation's indebtedness to him. If the installation of the machinery and
equipment in question in the central of the Mabalacat Sugar Co., Inc., in lieu of the
other of less capacity existing therein, for its sugar industry, converted them into
real property by reason of their purpose, it cannot be said that their incorporation
therewith was not permanent in character because, as essential and principal
elements of a sugar central, without them the sugar central would be unable to
function or carry on the industrial purpose for which it was established. Inasmuch as
the central is permanent in character, the necessary machinery and equipment
installed for carrying on the sugar industry for which it has been established must
necessarily be permanent.

Issue : Are the additional machines also considered mortgaged

Held:

Article 1877 of the Civil Code provides that mortgage includes all natural
accessions, improvements,growing fruits, and rents not collected when the
obligation falls due, and the amount of anyindemnities paid or due the owner by the
insurers of the mortgaged property or by virtue of theexercise of the power of

eminent domain, with the declarations, amplifications, and limitationsestablished by

law, whether the state continues in the possession of the person who mortgaged it
or whether it passes into the hands of a third person.It is a rule, that in a mortgage
of real estate, the improvements on the same are included; therefore, allobjects
permanently attached to a mortgaged building or land, although they may have
been placedthere after the mortgage was constituted, are also included.Article 334,
paragraph 5, of the Civil Code gives the character of real property to machinery,
liquidcontainers, instruments or implements intended by the owner of any building
or land for use inconnection with any industry or trade being carried on therein and
which are expressly adapted tomeet the requirements of such trade or industry. The
installation of a machinery and equipment in amortgaged sugar central, in lieu of
another of less capacity, for the purpose of carrying out theindustrial functions of
the latter and increasing production, constitutes a permanent improvement onsaid
sugar central and subjects said machinery and equipment to the mortgage
constituted thereon. If the installation of the machinery and equipment in question
in the central of the Mabalacat Sugar Co., Inc., in lieu of the other of less capacity
existing therein, for its sugar industry, converted them into real property by reason
of their purpose, it cannot be said that their incorporation therewith was not
permanent in character because, as essential and principal elements of a sugar
central, without them the sugar central would be unable to function or carry on the
industrial purpose for which it was established. Inasmuch as the central is
permanent in character, the necessary machinery and equipment installed for
carrying on the sugar industry for which it has been established must necessarily be
permanent.

Phil refining co. vs jarque , corominas

Facts : appears that on varying dates the Philippine Refining Co., Inc., and Francisco
Jarque executed three mortgages on the motor vessels Pandan and Zaragozaeach
was therein denominated a "chattel mortgage". Neither of the first two mortgages
had appended an affidavit of good faith. The third mortgage contained such an
affidavit, but this mortgage was not registered in the customs house until May 17,
1932, or within the period of thirty days prior to the commencement of insolvency
proceedings against Francisco Jarque; also, while the last mentioned mortgage was
subscribed by Francisco Jarque and M. N. Brink, there was nothing to disclose in
what capacity the said M. N. Brink signed. A fourth mortgage was executed by
Francisco Jarque and Ramon Aboitiz on the motorship Zaragoza and was entered in
the chattel mortgage registry of the register of deeds on May 12, 1932, or again
within the thirty-day period before the institution of insolvency proceedings. These
proceedings were begun on June 2, 1932, when a petition was filed with the Court of
First Instance of Cebu in which it was prayed that Francisco Jarque be declared an
insolvent debtor, which soon thereafter was granted, with the result that an
assignment of all the properties of the insolvent was executed in favor of Jose
Corominas.

Issue: WON vessels are considered personal property and the aforesaid mortgage
enforceable against third persons.
held : yes Vessels are considered personal property under the civil law. (Code of
Commerce, article 585.) Similarly under the common law, vessels are personal
property although occasionally referred to as a peculiar kind of personal property.
(Reynolds vs. Nielson [1903], 96 Am. Rep., 1000; Atlantic Maritime Co vs. City of
Gloucester [1917], 117 N. E., 924.) Since the term "personal property" includes
vessels, they are subject to mortgage agreeably to the provisions of the Chattel
Mortgage Law. (Act No. 1508, section 2.) Indeed, it has heretofore been accepted
without discussion that a mortgage on a vessel is in nature a chattel mortgage.
(McMicking vs. Banco Espaol-Filipino [1909], 13 Phil., 429; Arroyo vs. Yu de Sane
[1930], 54 Phil., 511.) The only difference between a chattel mortgage of a vessel
and a chattel mortgage of other personalty is that it is not now necessary for a
chattel mortgage of a vessel to be noted n the registry of the register of deeds, but
it is essential that a record of documents affecting the title to a vessel be entered in
the record of the Collector of Customs at the port of entry. (Rubiso and Gelito vs.
Rivera [1917], 37 Phil., 72; Arroyo vs. Yu de Sane, supra.) Otherwise a mortgage on
a vessel is generally like other chattel mortgages as to its requisites and validity. (58
C.J., 92.)
The Chattell Mortgage Law in its section 5, in describing what shall be deemed
sufficient to constitute a good chattel mortgage, includes the requirement of an
affidavit of good faith appended to the mortgage and recorded therewith. The
absence of the affidavit vitiates a mortgage as against creditors and subsequent
encumbrancers. (Giberson vs. A. N. Jureidini Bros. [1922], 44 Phil., 216; Benedicto
de Tarrosa vs. F. M. Yap Tico & Co. and Provincial Sheriff of Occidental Negros [1923],
46 Phil., 753.) As a consequence a chattel mortgage of a vessel wherein the
affidavit of good faith required by the Chattel Mortgage Law is lacking, is
unenforceable against third persons

Mindanao bus co. vs city assessor & treasurer

Facts: Respondent City Assessor of Cagayan de Oro City assessed at P4,400
petitioner's above-mentioned equipment. Petitioner appealed the assessment to the
respondent Board of Tax Appeals on the ground that the same are not realty. That
petitioner is a public utility solely engaged in transporting passengers and cargoes
by motor trucks, over its authorized lines in the Island of Mindanao, collecting rates
approved by the Public Service Commission; That these machineries have never
been or were never used as industrial equipments to produce
finished products
for sale, nor to repair machineries, parts and the like offered to the general public
indiscriminately for business or commercial purposes for which petitioner has never
engaged in, to date,. That these machineries are sitting on cement or wooden

platforms as may be seen in the attached photographs which form part of this
agreed stipulation of facts
Issue : WON such machineries are considered real property.
Held: No , So that movable equipments to be immobilized in contemplation of the
law must first be "essential and principal elements" of an industry or works without
which such industry or works would be "unable to function or carry on the industrial
purpose for which it was established." We may here distinguish, therefore, those
movable which become immobilized by destination because they are essential and
principal elements in the industry for those which may not be so considered
immobilized because they are merely incidental, not essential and principal. Thus,
cash registers, typewriters, etc., usually found and used in hotels, restaurants,
theaters, etc. are merely incidentals and are not and should not be considered
immobilized by destination, for these businesses can continue or carry on their
functions without these equity comments. Airline companies use forklifts, jeepwagons, pressure pumps, IBM machines, etc. which are incidentals, not essentials,
and thus retain their movable nature. On the other hand, machineries of breweries
used in the manufacture of liquor and soft drinks, though movable in nature, are
immobilized because they are essential to said industries; but the delivery trucks
and adding machines which they usually own and use and are found within their
industrial compounds are merely incidental and retain their movable nature.

Similarly, the tools and equipments in question in this instant case are, by their
nature, not essential and principle municipal elements of petitioner's business of
transporting passengers and cargoes by motor trucks. They are merely incidentals
acquired as movables and used only for expediency to facilitate and/or improve
its service. Even without such tools and equipments, its business may be carried on,
as petitioner has carried on, without such equipments, before the war. The
transportation business could be carried on without the repair or service shop if its
rolling equipment is repaired or serviced in another shop belonging to another. But
in the case at bar the equipments in question are destined only to repair or service
the transportation business, which is not carried on in a building or permanently on
a piece of land, as demanded by the law. Said equipments may not, therefore, be
deemed real property.

Sergs Product vs PCI Leasing

Facts: respondent PCI Leasing and Finance, Inc. (PCI Leasing for short)
filed with the RTC-QC a complaint for [a] sum of money upon an ex-parte
application of PCI Leasing, respondent judge issued a writ of replevin (Annex
B) 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.
petitioners filed a motion for special protective order (Annex C), invoking the
power of the court to control the conduct of its officers and amend and control
its processes, praying for a directive for the sheriff to defer enforcement of the
writ of replevin.
This motion was opposed by PCI Leasing (Annex F), on the ground that
the properties [were] still personal and therefore still subject to seizure and a
writ of replevin. In their Reply, petitioners asserted that the properties sought
to be seized [were] immovable as defined in Article 415 of the Civil Code, the
parties agreement to the contrary notwithstanding. They argued that to give
effect to the agreement would be prejudicial to innocent third parties. They
further stated that PCI Leasing [was] estopped from treating these
machineries as personal because the contracts in which the alleged
agreement [were] embodied [were] totally sham and farcical.
Issue : A. Whether or not the machineries purchased and imported by
SERGS became real property by virtue of immobilization

Held : 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. Indisputably, 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.1 In that sense, petitioners are correct in arguing that the said machines are
real, not personal, property pursuant to Article 415 (5) of the Civil Code. 2 The Court has
held that contracting parties may validly stipulate that a real property be considered as
personal.3 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. Clearly then,
petitioners are estopped from denying the characterization of the subject machines as
personal property. Under the circumstances, they are proper subjects of the Writ of
Seizure.

It should be stressed, however, that our holding -- that the machines should be deemed
personal property pursuant to the Lease Agreement is good only insofar as the
contracting parties are concerned.[22] Hence, while the parties are bound by the
1
2
3

Agreement, third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal.[23] In any event, there is no showing
that any specific third party would be adversely affected.

Davao sawmill vs Castillo

Facts : The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the
Government of the Philippine Islands. the land upon which the business was
conducted belonged to another person. On the land the sawmill company erected a
building which housed the machinery used by it. Some of the implements thus used
were clearly personal property, the conflict concerning machines which were placed
and mounted on foundations of cement it should further be explained that the
Davao Saw Mill Co., Inc., has on a number of occasions treated the machinery as
personal property by executing chattel mortgages in favor of third persons. One of
such persons is the appellee by assignment from the original mortgages.

Article 334, paragraphs 1 and 5, of the Civil Code, is in point. According to the Code,
real property consists of
1. Land, buildings, roads and constructions of all kinds adhering to the soil
2. Machinery, liquid containers, instruments or implements intended by the
owner of any building or land for use in connection with any industry or trade
being carried on therein and which are expressly adapted to meet the
requirements of such trade of industry

Issue: WON the machineries herein mentioned are real property or immovable.
Held: no, It is, however not necessary to spend overly must time in the resolution
of this appeal on side issues. It is machinery which is involved; moreover,
machinery not intended by the owner of any building or land for use in
connection therewith, but intended by a lessee for use in a building erected on
the land by the latter to be returned to the lessee on the expiration or
abandonment of the lease.

Prudential bank vs Panis

Facts: laintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale
secured a loan in the sum of P70,000.00 from the defendant Prudential Bank. To
secure payment of this loan, plaintiffs executed in favor of defendant on the
aforesaid date a deed of Real Estate Mortgage over several properties.
released in favor of the herein Mortgage.
From the aforequoted stipulation, it is obvious that the mortgagee (defendant
Prudential Bank) was at the outset aware of the fact that the mortgagors
(plaintiffs) have already filed a Miscellaneous Sales Application over the lot,
possessory rights over which, were mortgaged to it. the Secretary of Agriculture
issued Miscellaneous Sales Patent No. 4776 over the parcel of land, possessory
rights over which were mortgaged to defendant Prudential Bank, in favor of
plaintiffs. For failure of plaintiffs to pay their obligation to defendant Bank after it
became due, and upon application of said defendant, the deeds of Real Estate
Mortgage (Exhibits "A" and "B") were extrajudicially foreclosed. Consequent to
the foreclosure was the sale of the properties therein mortgaged to defendant as
the highest bidder in a public auction sale conducted by the defendant City
Sheriff. Respondent Court, in a Decision dated November 3, 1978 declared the
deeds of Real Estate Mortgage as null and void.
Issue: Whether or not a valid RE mortgage can be constituted on the building
erected on the belonging to another.
Held : The inclusion of building distinct and separate from the land in the Civil Code can only mean
that the building itself is an immovable property.
While it is true that a mortgage of land necessarily includes in the absence of stipulation of the
improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the
land on which it is built. Such a mortgage would still be considered as a REM for the building would
still be considered as immovable property even if dealt with separately and apart from the land.
The original mortgage on the building and right to occupancy of the land was executed before the
issuance of the sales patent and before the government was divested of title to the land. Under the
foregoing, it is evident that the mortgage executed by private respondent on his own
building was a valid mortgage.
As to the second mortgage, it was done after the sales patent was issued and thus prohibits pertinent
provisions of the Public Land Act

Caltex vs central board of assessment

Facts :
This case is about the realty tax on machinery and equipment installed by Caltex
(Philippines) Inc. in its gas stations located on leased land.

The machines and equipment consists of underground tanks, elevated tank,

elevated water tanks, water tanks, gasoline pumps, computing pumps, water
pumps, car washer, car hoists, truck hoists, air compressors and tireflators. The
city assessor described the said equipment and machinery as immovable or real
property. Caltex filed this certiorari petition wherein it prayed for the setting
aside of the Board's decision and for a declaration that the said machines and
equipment are personal property not subject to realty tax. The Solicitor General's
contention that the Court of Tax Appeals has exclusive appellate jurisdiction over
this case is not correct. Caltex invokes the rule that machinery which is movable
in its nature only becomes immobilized when placed in a plant by the owner of
the property or plant but not when so placed by a tenant, a usufructuary, or any
person having only a temporary right, unless such person acted as the agent of
the owner
Issue: WON the mentioned machineries shall be considered immovable and shall
be subjected to property tax.
Held: We hold that the said equipment and machinery, as appurtenances to the
gas station building or shed owned by Caltex (as to which it is subject to realty
tax) and which fixtures are necessary to the operation of the gas station, for
without them the gas station would be useless, and which have been attached or
affixed permanently to the gas station site or embedded therein, are taxable
improvements and machinery within the meaning of the Assessment Law and
the Real Property Tax Code. The Central Board of Assessment Appeals did not
commit a grave abuse of discretion in upholding the city assessor's is imposition
of the realty tax on Caltex's gas station and equipment.

Tsai v. CA
(Chattel Mortgage-Real or Personal Property)
Facts: Respondent Ever Textile Mills, Inc. (EVERTEX) obtained a three million peso
(P3,000,000.00) loan from petitioner Philippine Bank of Communications (PBCom).
As security for the loan, EVERTEX executed in favor of PBCom, a deed of Real and
Chattel Mortgage over a lot where its factory stands, and the chattels located.
PBCom granted a second loan of P3,356,000.00 to EVERTEX. The loan was secured
by a Chattel Mortgage over personal properties enumerated in a list attached in the

mortgage contract. After April 23, 1979, the date of the execution of the second
mortgage EVERTEX purchased various machines and equipments. Due to business
reverses, EVERTEX filed insolvency proceedings. The CFI issued an order declaring
the corporation insolvent. All its assets were taken into the custody of the
Insolvency Court, including the collateral, real and personal, securing the two
mortgages. upon EVERTEX's failure to meet its obligation to PBCom, the latter
commenced extrajudicial foreclosure proceedings against EVERTEX and the first
public auction was held where petitioner PBCom emerged as the highest bidder and
a Certificate of Sale was issued in its favor on the same date. Another public auction
was held and again, PBCom was the highest bidder. The sheriff issued a Certificate
of Sale on the same day. PBCom consolidated its ownership over the lot and all the
properties in it. In November 1986, it leased the entire factory premises to
petitioner Ruby L. Tsai and thereafter sold the same. EVERTEX filed a complaint for
annulment of sale alleging that the extrajudicial foreclosure of subject mortgage
was in violation of the Insolvency Law and averred that PBCom, without any legal or
factual basis, appropriated the contested properties, which were not included in the
first Real and Chattel Mortgage nor in the second Chattel Mortgage, and neither
were those properties included in the Notice of Sheriff's Sale. The RTC found that the
lease and sale of said personal properties were irregular and illegal because they
were not duly foreclosed nor sold at the auction sale since these were not included
in the schedules attached to the mortgage contracts. PBCom and Tsai appealed to
the Court of Appeals which then affirmed the decision of the Trial Court. Petitioner
Tsai, in a separate petition for review, averred that the CA erred in effect making a
contract for the parties by treating the 1981 acquired machineries as chattels
instead of real properties within their earlier Deed of Real and Chattel Mortgage or
the second Deed of Chattel Mortgage.
Issue: WON the inclusion of the questioned properties in the foreclosed properties
as real properties is proper.
Held: No. While it is true that the controverted properties appear to be immobile, a
perusal of the contract of Real and Chattel Mortgage executed by the parties herein
gives us a contrary indication. In the case at bar, both the trial and the appellate
courts reached the same finding that the true intention of PBCOM and the owner,
EVERTEX, is to treat machinery and equipment as chattels. The pertinent portion of
respondent appellate court's ruling is quoted below:
As stressed upon by appellees, appellant bank treated the machineries as chattels;
never as real properties. Indeed, the 1975 mortgage contract, which was actually
real and chattel mortgage, militates against appellants' posture. It should be noted
that the printed form used by appellant bank was mainly for real estate mortgages.
But reflective of the true intention of appellant PBCOM and appellee EVERTEX was
the typing in capital letters, immediately following the printed caption of mortgage,
of the phrase "real and chattel." So also, the "machineries and equipment" in the
printed form of the bank had to be inserted in the blank space of the printed
contract and connected with the word "building" by typewritten slash marks. Now,
then, if the machineries in question were contemplated to be included in the real
estate mortgage, there would have been no necessity to ink a chattel mortgage

specifically mentioning as part III of Schedule A a listing of the machineries covered

thereby. It would have sufficed to list them as immovables in the Deed of Real
Estate Mortgage of the land and building involved.
As regards the 1979 contract, the intention of the parties is clear and beyond
question. It refers solely tochattels. The inventory list of the mortgaged properties is
an itemization of sixty-three (63) individually described machineries while the
schedule listed only machines and 2,996,880.50 worth of finished cotton fabrics and
natural cotton fabrics.16
In the absence of any showing that this conclusion is baseless, erroneous or
uncorroborated by the evidence on record, the Court finds no compelling reason to
depart therefrom. Assuming that the properties in question are immovable by
nature, nothing detracts the parties from treating it as chattels to secure an
obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9 SCRA
631 (1963), an immovable may be considered a personal property if there is a
stipulation as when it is used as security in the payment of an obligation where a
chattel mortgage is executed over it, as in the case at bar.
In the instant case, the parties herein:
(1) executed a contract styled as "Real Estate Mortgage and Chattel Mortgage,"
instead of just "Real Estate Mortgage" if indeed their intention is to treat all
properties included therein as immovable, and (2) attached to the said contract a
separate "LIST OF MACHINERIES & EQUIPMENT". These facts, taken together, evince
the conclusion that the parties' intention is to treat these units of machinery as
chattels. A fortiori, the contested after-acquired properties, which are of the same
description as the units enumerated under the title "LIST OF MACHINERIES &
EQUIPMENT," must also be treated as chattels.
Accordingly, the Court find no reversible error in the respondent appellate court's
ruling that inasmuch as the subject mortgages were intended by the parties to
involve chattels, insofar as equipment and machinery were concerned, the Chattel
Mortgage Law applies, which provides in Section 7 thereof that: "a chattel mortgage
shall be deemed to cover only the property described therein and not like or
substituted property thereafter acquired by the mortgagor and placed in the same
depository as the property originally mortgaged, anything in the mortgage to the
contrary notwithstanding." And, since the disputed machineries were acquired in
1981 and could not have been involved in the 1975 or 1979 chattel mortgages, it
was consequently an error on the part of the Sheriff to include subject machineries
with the properties enumerated in said chattel mortgages. As the auction sale of the
subject properties to PBCom is void, no valid title passed in its favor. Consequently,
the sale thereof to Tsai is also a nullity under the elementary principle of nemodat
quod non habet, one cannot give what one does not have. 17

Makati Leasing v. Wearever textile

(Real or Personal Property- Chattel Mortgage)
Facts:
Private respondent Wearever Textile Mills, Inc., discounted and assigned several
receivables withpetitioner Makati Leasing and Finance Corporationunder a
Receivable Purchase Agreementin order to obtain financial accommodations. To
secure the collection of the receivables assigned, private respondent executed a
Chattel Mortgage over certain raw materials inventory as well as a machinery
described as an Artos Aero Dryer Stentering Range.Upon private respondent's
default, petitioner filed a petition for extrajudicial foreclosure of the properties
mortgage to it. However, the Deputy Sheriff assigned to implement the foreclosure
failed to gain entry into private respondent's premises and was not able to effect
the seizure of the aforedescribed machinery.Petitioner thereafter filed a complaint
for judicial foreclosure. After several incidents, the lower court finally issuedan
order lifting the restraining order for the enforcement of the writ of seizure and an
order to break open the premises of private respondent to enforce said writ. The
sheriff enforcing the seizure order, repaired to the premises of private respondent
and removed the main drive motor of the subject machinery. Private
respondent filedcertiorari and prohibition proceedings to set aside the Orders of the
lower court and ordered the return of the drive motor seized by the sheriff pursuant
to said Orders, after ruling that the machinery in suit cannot be the subject of
replevin, much less of a chattel mortgage, because it is a real property pursuant to
Article 415 of the new Civil Code, the same being attached to the ground by means
of bolts and the only way to remove it from respondent's plant would be to drill out
or destroy the concrete floor, the reason why all that the sheriff could do to enfore
the writ was to take the main drive motor of said machinery. The appellate court
rejected petitioner's argument that private respondent is estopped from claiming
that the machine is real property by constituting a chattel mortgage thereon.
Issue: WON the machinery in suit is real or personal property?
Held: The Supreme Court find no logical justification to exclude the rule in Tumalad
case, as the appellate court did that if a house of strong materials, like what was
involved in same case may be considered as personal property for purposes of
executing a chattel mortgage thereon as long as the parties to the contract so
agree and no innocent third party will be prejudiced thereby, there is absolutely no
reason why a machinery, which is movable in its nature and becomes immobilized
only by destination or purpose, may not be likewise treated as such. This is really
because one who has so agreed is estopped from denying the existence of the
chattel mortgage. The appellate court 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 should not lay down distinctions not contemplated by law.It
must be pointed out that the characterization of the subject machinery as chattel by
the private respondent is indicative of intention and impresses upon the property
the character determined by the parties.The contention of the private respondents

that estoppel cannot apply against it because it had never represented nor agreed
that the machinery in suit be considered as personal property but was merely
required and dictated on by herein petitioner to sign a printed form of chattel
mortgage which was in a blank form at the time of signinglacks persuasiveness. As
aptly pointed out by petitioner and not denied by the respondent, the status of the
subject machinery as movable or immovable was never placed in issue before the
lower court and the Court of Appeals except in a supplemental memorandum in
support of the petition filed in the appellate court. The error of the appellate court in
ruling that the questioned machinery is real, not personal property, becomes very
apparent. Moreover, the case of Machinery and Engineering Supplies, Inc. v. CA, 96
Phil. 70, heavily relied upon by said court is not applicable to the case at bar, the
nature of the machinery and equipment involved therein as real properties never
having been disputed nor in issue, and they were not the subject of a Chattel
Mortgage. Undoubtedly, the Tumalad case bears more nearly perfect parity with the
instant case to be the more controlling jurisprudential authority.WHEREFORE, the
questioned decision and resolution of the Court of Appeals are hereby reversed and
set aside, and the Orders of the lower court are hereby reinstated, with costs
against the private respondent
G.R. No. L-64261 December 26, 1984
JOSE BURGOS, SR., JOSE BURGOS, JR., BAYANI SORIANO and J. BURGOS
MEDIA SERVICES, INC.,petitioners,
vs.
THE CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, THE CHIEF,
PHILIPPINE CONSTABULARY, THE CHIEF LEGAL OFFICER, PRESIDENTIAL
SECURITY COMMAND, THE JUDGE ADVOCATE GENERAL, ET AL., respondents.

Facts: ssailed in this petition for certiorari prohibition and mandamus with
preliminary mandatory and prohibitory injunction is the validity of two [2] search
warrants issued by respondent Judge Ernani Cruz-Pano, under which the premises
known as No. 19, Road 3, Project 6, Quezon City, and 784 Units C & D, RMS Building,
Quezon Avenue, Quezon City, business addresses of the "Metropolitan Mail" and
"We Forum" newspapers, respectively, were searched, and office and printing
machines, equipment, paraphernalia, motor vehicles and other articles used in the
printing, publication and distribution of the said newspapers, as well as numerous
papers, documents, books and other written literature alleged to be in the
possession and control of petitioner Jose Burgos, Jr. publisher-editor of the "We
Forum" newspaper, were seized. At the hearing on July 7, 1983, the Solicitor
General, while opposing petitioners' prayer for a writ of preliminary mandatory
injunction, manifested that respondents "will not use the aforementioned articles as
evidence in the aforementioned case until final resolution of the legality of the
seizure of the aforementioned articles.

Respondents would have this Court dismiss the petition on the ground that
petitioners had come to this Court without having previously sought the quashal of
the search warrants before respondent judge. Indeed, petitioners, before impugning
the validity of the warrants before this Court, should have filed a motion to quash
said warrants in the court that issued them. Respondents likewise urge dismissal of
the petition on ground of laches. Considerable stress is laid on the fact that while
said search warrants were issued on December 7, 1982, the instant petition
impugning the same was filed only on June 16, 1983 or after the lapse of a period of
more than six [6] months. Although the reason given by petitioners may not be
flattering to our judicial system, We find no ground to punish or chastise them for an
error in judgment. On the contrary, the extrajudicial efforts exerted by petitioners
quite evidently negate the presumption that they had abandoned their right to the
possession of the seized property, thereby refuting the charge of laches against
them. Several and diverse reasons have been advanced by petitioners to nullify the
search warrants in question:

a) Petitioners fault respondent judge for his alleged failure to conduct an

examination under oath or affirmation of the applicant and his witnesses,
as mandated by the above-quoted constitutional provision as wen as Sec.
4, Rule 126 of the Rules of Court
b) Search Warrants No. 20-82[a] and No. 20- 82[b] were used to search two
distinct places: No. 19, Road 3, Project 6, Quezon City and 784 Units C &
D, RMS Building, Quezon Avenue, Quezon City, respectively. Objection is
interposed to the execution of Search Warrant No. 20-82[b] at the latter
address on the ground that the two search warrants pinpointed only one
place where petitioner Jose Burgos, Jr. was allegedly keeping and
concealing the articles listed therein
c) Another ground relied upon to annul the search warrants is the fact that
although the warrants were directed against Jose Burgos, Jr. alone, articles
b belonging to his co-petitioners Jose Burgos, Sr., Bayani Soriano and the J.
Burgos Media Services, Inc. were seized.

Issue: whether or not the seized properties are subject to search warrant.
Held: S ection 2, Rule 126 of the Rules of Court, enumerates the personal
properties that may be seized under a search warrant, to wit:
Sec. 2. Personal Property to be seized. A search warrant may be issued for the
search and seizure of the following personal property:

[a] Property subject of the offense;

[b] Property stolen or embezzled and other proceeds or fruits of the offense; and
[c] Property used or intended to be used as the means of committing an offense.
The above rule does not require that the property to be seized should be owned by
the person against whom the search warrant is directed. It may or may not be
owned by him. In fact, under subsection [b] of the above-quoted Section 2, one of
the properties that may be seized is stolen property. Necessarily, stolen property
must be owned by one other than the person in whose possession it may be at the
time of the search and seizure. Ownership, therefore, is of no consequence, and it is
sufficient that the person against whom the warrant is directed has control or
possession of the property sought to be seized, as petitioner Jose Burgos, Jr. was
alleged to have in relation to the articles and property seized under the warrants.
Neither is there merit in petitioners' assertion that real properties were seized under
the disputed warrants. Under Article 415[5] of the Civil Code of the Philippines,
"machinery, receptables, 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" are considered immovable property. In Davao Sawmill Co. v. Castillo 9 where
this legal provision was invoked, this Court ruled 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 do 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.
G.R. Nos. L-10817-18

February 28, 1958

ENRIQUE LOPEZ, petitioner,

vs.
VICENTE OROSA, JR., and PLAZA THEATRE, INC., respondents.

Facts: Enrique Lopez is a resident of Balayan, Batangas, doing business under the
trade name of Lopez-Castelo Sawmill. Sometime in May, 1946, Vicente Orosa, Jr.,
also a resident of the same province, dropped at Lopez' house and invited him to
make an investment in the theatre business. It was intimated that Orosa, his family
and close friends were organizing a corporation to be known as Plaza Theatre, Inc.,

that would engage in such venture. Although Lopez expressed his unwillingness to
invest of the same, he agreed to supply the lumber necessary for the construction
of the proposed theatre, and at Orosa's behest and assurance that the latter would
be personally liable for any account that the said construction might incur, Lopez
further agreed that payment therefor would be on demand and not cash on delivery
basis. Pursuant to said verbal agreement, Lopez delivered the lumber which was
used for the construction of the Plaza Theatre on May 17, 1946, up to December 4
of the same year. But of the total cost of the materials amounting to P62,255.85,
Lopez was paid only P20,848.50, thus leaving a balance of P41,771.35.
As Lopez was pressing Orosa for payment of the remaining unpaid obligation, the
latter and Belarmino Rustia, the president of the corporation, promised to obtain a
bank loan by mortgaging the properties of the Plaza Theatre., out of which said
amount of P41,771.35 would be satisfied, to which assurance Lopez had to accede.
Unknown to him, however, as early as November, 1946, the corporation already got
a loan for P30,000 from the Philippine National Bank with the Luzon Surety
Company as surety, and the corporation in turn executed a mortgage on the land
and building in favor of said company as counter-security.
Persistent demand from Lopez for the payment of the amount due him caused
Vicente Orosa, Jr. to execute on March 17, 1947, an alleged "deed of assignment" of
his 420 shares of stock of the Plaza Theater, Inc., at P100 per share or with a total
value of P42,000 in favor of the creditor, and as the obligation still remained
unsettled, Lopez filed on November 12, 1947, a complaint with the Court of First
Instance of Batangas against Vicente Orosa, Jr. and Plaza Theater, Inc., praying that
defendants be sentenced to pay him jointly and severally the sum of P41,771.35,
with legal interest from the firing of the action; that in case defendants fail to pay
the same, that the building and the land covered by OCT No. O-391 owned by the
corporation be sold at public auction and the proceeds thereof be applied to said
indebtedness; or that the 420 shares of the capital stock of the Plaza Theatre, Inc.,
assigned by Vicente Orosa, Jr., to said plaintiff be sold at public auction for the same
purpose; and for such other remedies as may be warranted by the circumstances.
Plaintiff also caused the annotation of a notice of lis pendens on said properties with
the Register of Deeds.

Issue:
1) whether a materialman's lien for the value of the materials used in the
construction of a building attaches to said structure alone and does not extend to
the land on which the building is adhered to

(2) whether the lower court and the Court of Appeals erred in not providing that the
material mans liens is superior to the mortgage executed in favor surety company
not only on the building but also on the land.

Held:ART. 1923. With respect to determinate real property and real rights of the
debtor, the following are preferred:
5. Credits for refection, not entered or recorded, with respect to the estate upon
which the refection was made, and only with respect to other credits different from
those mentioned in four preceding paragraphs.
It is argued that in view of the employment of the phrase real estate, or immovable
property, and inasmuch as said provision does not contain any specification
delimiting the lien to the building, said article must be construed as to embrace
both the land and the building or structure adhering thereto. We cannot subscribe to
this view, for while it is true that generally, real estate connotes the land and the
building constructed thereon, it is obvious that the inclusion of the building,
separate and distinct from the land, in the enumeration of what may constitute real
properties1 could mean only one thing that a building is by itself an immovable
property, a doctrine already pronounced by this Court in the case of Leung Yee vs.
Strong Machinery Co., 37 Phil., 644. Moreover, and in view of the absence of any
specific provision of law 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.
A close examination of the provision of the Civil Code invoked by appellant reveals
that the law gives preference to unregistered refectionary credits only with respect
to the real estate upon which the refection or work was made. This being so, the
inevitable conclusion must be that the lien so created attaches merely to the
immovable property for the construction or repair of which the obligation was
incurred. Evidently, 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.
Considering the conclusion thus arrived at, i.e., that the materialman'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 said
materialman's lien.
G.R. No. L-32917 July 18, 1988
JULIAN S. YAP, petitioner,
vs.

HON. SANTIAGO O. TAADA, etc., and GOULDS PUMPS INTERNATIONAL

(PHIL.), INC., respondents.

Facts: The case began in the City Court of Cebu with the filing by Goulds Pumps
International (Phil.), Inc. of a complaint against Yap and his wife seeking recovery
of P1,459.30 representing the balance of the price and installation cost of a water
pump in the latter's premises. When this case was called for trial today, Atty.
Paterno Natinga appeared for the plaintiff Goulds and informed the court that he is
ready for trial. However, none of the defendants appeared despite notices having
been served upon them. Goulds presented evidence ex parte and judgment by
default was rendered the following day by Judge Taada requiring Yap to pay to
Goulds (1) Pl,459.30 representing the unpaid balance of the pump purchased by
him; (2) interest of 12% per annum thereon until fully paid; and (3) a sum
equivalent to 25% of the amount due as attorney's fees and costs and other
expenses in prosecuting the action. Notice of the judgment was served on Yap on
September 1, 1969. On September 16, 1969 Yap filed a motion for
reconsideration. In it he insisted that his motion for postponement should have
been granted since it expressed his desire to explore the possibility of an amicable
settlement; that the court should give the parties time to arrive at an amicable
settlement failing which, he should be allowed to present evidence in support of his
defenses (discrepancy as to the price and breach of warranty).
n October 15, 1969 Judge Taada issued an Order granting Goulds' Motion for
Issuance of Writ of Execution dated October 14, 1969, declaring the reasons therein
alleged to be meritorious. In the meantime the Sheriff levied on the water pump in
question, and by notice dated November 4, 1969, scheduled the execution sale
thereof on November 14, 1969. But in view of the pendency of Yap's motion for
reconsideration of October 29, 1969, suspension of the sale was directed by Judge
Taada in an order dated November 6, 1969. It appears however that a copy of this
Order was not transmitted to the Sheriff "through oversight, inadvertence and
pressure of work" of the Branch Clerk of Court. So the Deputy Provincial Sheriff went
ahead with the scheduled auction sale and sold the property levied on to Goulds as
the highest bidder. He later submitted the requisite report to the Court dated
November 17, 1969, as well as the "Sheriffs Return of Service" dated February 13,
1970, in both of which it was stated that execution had been "partially satisfied." It
should be observed that up to this time, February, 1970, Yap had not bestirred
himself to take an appeal from the judgment of August 29, 1969.

Issue: Whether or not the water pump had become immovable property by it being
installed in his residence.

Held: No. Yap's next argument that the water pump had become immovable
property by its being installed in his residence is also untenable. The Civil Code
considers as immovable property, among others, anything "attached to an
immovable in a fixed manner, in such a way that it cannot be separated therefrom
without breaking the material or deterioration of the object." 42 The pump does not
fit this description. It could be, and was in fact separated from Yap's premises
without being broken or suffering deterioration. Obviously the separation or removal
of the pump involved nothing more complicated than the loosening of bolts or
dismantling of other fasteners.
Yap's last claim is that in the process of the removal of the pump from his house,
Goulds' men had trampled on the plants growing there, destroyed the shed over the
pump, plugged the exterior casings with rags and cut the electrical and conduit
pipes; that he had thereby suffered actual-damages in an amount of not less than P
2,000.00, as well as moral damages in the sum of P 10,000.00 resulting from his
deprivation of the use of his water supply; but the Court had refused to allow him to
prove these acts and recover the damages rightfully due him. Now, as to the loss of
his water supply, since this arose from acts legitimately done, the seizure on
execution of the water pump in enforcement of a final and executory judgment, Yap
most certainly is not entitled to claim moral or any other form of damages therefor.

G.R. No. L-7057

October 29, 1954

MACHINERY & ENGINEERING SUPPLIES, INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, HON. POTENCIANO PECSON, JUDGE
OF THE COURT OF FIRST INSTANCE OF MANILA, IPO LIMESTONE CO., INC.,
and ANTONIO VILLARAMA, respondents.

Facts: On March 13, 1953, the herein petitioner filed a complaint for replevin in the
Court of First Instance of Manila,for the recovery of the machinery and equipment
sold and delivered to said defendants at their factory in barrio Bigti, Norzagaray,
Bulacan. Upon application ex-parte of the petitioner company, and upon approval of
petitioner's bond in the sum of P15,769.00, on March 13,1953, respondent judge
issued an order, commanding the Provincial Sheriff of Bulacan to seize and take
immediate possession of the properties specified in the order. On March 19, 1953,
two deputy sheriffs of Bulacan, the said Ramon S. Roco, and a crew of technical
men and laborers proceeded to Bigti, for the purpose of carrying the court's order

into effect. Leonardo Contreras, Manager of the respondent Company, and Pedro
Torres, in charge thereof, met the deputy sheriffs, and Contreras handed to them a
letter addressed to Atty. Leopoldo C. Palad, ex-oficio Provincial Sheriff of Bulacan,
signed by Atty. Adolfo Garcia of the defendants therein, protesting against the
seizure of the properties in question, on the ground that they are not personal
properties. Contending that the Sheriff's duty is merely ministerial, the deputy
sheriffs, Roco, the latter's crew of technicians and laborers, Contreras and Torres,
went to the factory. On March 20, 1953, the defendant Company filed an urgent
motion, with a counter-bond in the amount of P15,769, for the return of the
properties seized by the deputy sheriffs. On the same day, the trial court issued an
order, directing the Provincial Sheriff of Bulacan to return the machinery and
equipment to the place where they were installed at the time of the seizure. The
deputy sheriffs returned the properties seized, by depositing them along the road,
near the quarry, of the defendant Company, at Bigti, without the benefit of
inventory and without re-installing hem in their former position and replacing the
destroyed posts, which rendered their use impracticable. The Provincial Sheriff filed
an urgent motion in court, manifesting that Roco had been asked to furnish the
Sheriff's office with the expenses, laborers, technical men and equipment, to carry
into effect the court's order, to return the seized properties in the same way said
Roco found them on the day of seizure, but said Roco absolutely refused to do so,
and asking the court that the Plaintiff therein be ordered to provide the required aid
or relieve the said Sheriff of the duty of complying with the said order.

Issue:
a)whether the machinery or equipment in litigation are immovable

b)whether the Provincial Sheriff of Bulacan, at the Petitioner's instance, was justified
in destroying the machinery and in refusing to restore them to their original form ,
at the expense of the Petitioner.

Held:
a) When the sheriff repaired to the premises of respondent, Ipo Limestone Co.,
Inc., machinery and equipment in question appeared to be attached to the
land, particularly to the concrete foundation of said premises, in a fixed

manner, in such a way that the former could not be separated from the latter
"without breaking the material or deterioration of the object." Hence, in order
to remove said outfit, it became necessary, not only to unbolt the same, but ,
also, to cut some of its wooden supports. Moreover, said machinery and
equipment were "intended by the owner of the tenement for an industry"
carried on said immovable and tended." For these reasons, they were already
immovable property pursuant to paragraphs 3 and 5 of Article 415 of Civil
Code of the Philippines, which are substantially identical to paragraphs 3 and
5 of Article 334 of the Civil Code of Spain. As such immovable property, they
were not subject to replevin.
In so far as an article, including a fixture annexed by a tenant, is regarded as
part of the realty, it is not the subject for personality; . . . .
. . . the action of replevin does not lie for articles so annexed to the realty as
to be part as to be part thereof, as, for example, a house or a turbine pump
constituting part of a building's cooling system; . .
b) Lastly, although the parties have not cited, and We have not found, any
authority squarely in point obviously real property are not subject to
replevin it is well settled that, when the restitution of what has been
ordered, the goods in question shall be returned in substantially the same
condition as when taken (54 C.J., 590-600, 640-641). Inasmuch as the
machinery and equipment involved in this case were duly installed and
affixed in the premises of respondent company when petitioner's
representative caused said property to be dismantled and then removed, it
follows that petitioner must also do everything necessary to the reinstallation
of said property in conformity with its original condition.
Wherefore, the decision of the Court of Appeals is hereby affirmed, with costs
against the petitioner. So ordered.
Province of Zamboanga Del Norte v. City of Zamboanga
G.R. No. L-24440
Facts: Prior to its incorporation as a chartered city, the Municipality of Zamboanga
used to be the provincial capital of the then Zamboanga Province. On October 12,
1936, Commonwealth Act 39 was approved converting the Municipality of
Zamboanga into Zamboanga City. Sec. 50 of the Act also provided that
Buildings and properties which the province shall abandon upon the transfer
of the capital to another place will be acquired and paid for by the City of
Zamboanga at a price to be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings
constructed thereon, located in the City of Zamboanga and covered individually by
Torrens certificates of title in the name of Zamboanga Province.

It appears that in 1945, the capital of Zamboanga Province was transferred to

Dipolog. 2 Subsequently, or on June 16, 1948, Republic Act 286 was approved
creating the municipality of Molave and making it the capital of Zamboanga
Province.
On May 26, 1949, the Appraisal Committee formed by the Auditor General, pursuant
to Commonwealth Act 39, fixed the value of the properties and buildings in question
left by Zamboanga Province in Zamboanga City at P1,294,244.00. 3
On June 6, 1952, Republic Act 711 was approved dividing the province of
Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. As to how
the assets and obligations of the old province were to be divided between the two
new ones, Sec. 6 of that law provided:
Upon the approval of this Act, the funds, assets and other properties and the
obligations of the province of Zamboanga shall be divided equitably between
the Province of Zamboanga del Norte and the Province of Zamboanga del Sur
by the President of the Philippines, upon the recommendation of the Auditor
General.
the Executive Secretary, by order of the President, issued a ruling 4 holding that
Zamboanga del Norte had a vested right as owner (should be co-owner pro-indiviso)
of the properties mentioned in Sec. 50 of Commonwealth Act 39, and is entitled to
the price thereof, payable by Zamboanga City. This ruling revoked the previous
Cabinet Resolution of July 13, 1951 conveying all the said 50 lots and buildings
thereon to Zamboanga City for P1.00, effective as of 1945, when the provincial
capital of the then Zamboanga Province was transferred to Dipolog.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that
All buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga are hereby
transferred, free of charge, in favor of the said City of Zamboanga. (Stressed
for emphasis).
Consequently, the Secretary of Finance, on July 12, 1961, ordered the Commissioner
of Internal Revenue to stop from effecting further payments to Zamboanga del
Norte and to return to Zamboanga City the sum of P57,373.46 taken from it out of
the internal revenue allotment of Zamboanga del Norte.
Zamboanga Del Norte file, a complaint entitled "Declaratory Relief with Preliminary
Mandatory Injunction" in the Court of First Instance of Zamboanga del Norte against
defendants-appellants Zamboanga City, the Secretary of Finance and the
Commissioner of Internal Revenue. It was prayed that: (a) Republic Act 3039 be
declared unconstitutional for depriving plaintiff province of property without due
process and just compensation; (b) Plaintiff's rights and obligations under said law
be declared; (c) The Secretary of Finance and the Internal Revenue Commissioner
be enjoined from reimbursing the sum of P57,373.46 to defendant City; and (d) The

latter be ordered to continue paying the balance of P704,220.05 in quarterly

installments of 25% of its internal revenue allotments.
Issue: won Republic Act 3039 is unconstitutional for depriving plaintiff province of
property without due process and just compensation
Held: The validity of the law ultimately depends on the nature of the 50 lots and
buildings thereon in question. For, the matter involved here is the extent of
legislative control over the properties of a municipal corporation, of which a
province is one. The principle itself is simple: If the property is owned by the
municipality (meaning municipal corporation) in its public and governmental
capacity, the property is public and Congress has absolute control over it. But if the
property is owned in its private or proprietary capacity, then it is patrimonial and
Congress has no absolute control. The municipality cannot be deprived of it without
due process and payment of just compensation
The Civil Code classification is embodied in its Arts. 423 and 424 which
provide:1wph1.t
ART. 423. The property of provinces, cities, and municipalities is divided into
property for public use and patrimonial property.
ART. 424. Property for public use, in the provinces, cities, and municipalities,
consists of the provincial roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public works for public service paid for
by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be governed
by this Code, without prejudice to the provisions of special laws
Applying the above cited norm, all the properties in question, except the two (2) lots
used as High School playgrounds, could be considered as patrimonial properties of
the former Zamboanga province. Even the capital site, the hospital and leprosarium
sites, and the school sites will be considered patrimonial for they are not for public
use. They would fall under the phrase "public works for public service" for it has
been held that under the ejusdem generis rule, such public works must be for free
and indiscriminate use by anyone, just like the preceding enumerated properties in
the first paragraph of Art 424. 7 The playgrounds, however, would fit into this
category.On the other hand, applying the norm obtaining under the principles
constituting the law of Municipal Corporations, all those of the 50 properties in
question which are devoted to public service are deemed public; the rest remain
patrimonial. Under this norm, to be considered public, it is enough that the property
be held and, devoted for governmental purposes like local administration, public
education, public health, etc.
Regarding the several buildings existing on the lots above-mentioned, the records
do not disclose whether they were constructed at the expense of the former
Province of Zamboanga. Considering however the fact that said buildings must have
been erected even before 1936 when Commonwealth Act 39 was enacted and the
further fact that provinces then had no power to authorize construction of buildings

such as those in the case at bar at their own expense, 14 it can be assumed that
said buildings were erected by the National Government, using national funds.
Hence, Congress could very well dispose of said buildings in the same manner that
it did with the lots in question.
But even assuming that provincial funds were used, still the buildings constitute
mere accessories to the lands, which are public in nature, and so, they follow the
nature of said lands, i.e., public. Moreover, said buildings, though located in the city,
will not be for the exclusive use and benefit of city residents for they could be
availed of also by the provincial residents. The province then and its successorsin-interest are not really deprived of the benefits thereof.
But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its
share in the value of the rest of the 26 remaining lots which are patrimonial
properties since they are not being utilized for distinctly, governmental purposes.
The controversy here is more along the domains of the Law of Municipal
Corporations State vs. Province than along that of Civil Law. Moreover, this
Court is not inclined to hold that municipal property held and devoted to public
service is in the same category as ordinary private property. The consequences are
dire. As ordinary private properties, they can be levied upon and attached. They can
even be acquired thru adverse possession all these to the detriment of the local
community. Lastly, the classification of properties other than those for public use in
the municipalities as patrimonial under Art. 424 of the Civil Code is "... without
prejudice to the provisions of special laws." For purpose of this article, the
principles, obtaining under the Law of Municipal Corporations can be considered as
"special laws". Hence, the classification of municipal property devoted for distinctly
governmental purposes as public should prevail over the Civil Code classification in
this particular case.

Tumalad vs vicencio
Facts: defendants-appellants executed a chattel mortgage in favor of plaintiffs-appellees over

their house of strong materials which were being rented from Madrigal & Company, Inc. The
mortgage was registered in the Registry of Deeds of Manila. When defendants-appellants
defaulted in paying, the mortgage was extrajudicially foreclosed, and on 27 March 1956, the
house was sold at public auction pursuant to the said contract. As highest bidder, plaintiffsappellees were issued the corresponding certificate of sale. the judgment regarding the surrender
of possession to plaintiffs-appellees could not be executed because the subject house had been
already demolished on 14 January 1957 pursuant to the order of the court in a separate civil case
(No. 25816) for ejectment against the present defendants for non-payment of rentals on the land
on which the house was constructed. Defendants-appellants predicate their theory of nullity of
the chattel mortgage on two grounds, which are: (a) that, their signatures on the chattel mortgage
were obtained through fraud, deceit, or trickery; and (b) that the subject matter of the mortgage is

a house of strong materials, and, being an immovable, it can only be the subject of a real estate
mortgage and not a chattel mortgage.

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.

Evangelista VS Alto surety

Facts: Santos Evangelista, instituted Civil Case No. 8235 of the Court of First,
Instance of Manila entitled " Santos Evangelista vs. Ricardo Rivera," for a sum of
money. On the same date, he obtained a writ of attachment, which levied upon a
house, built by Rivera on a land situated in Manila and leased to him, by filing
copy of said writ and the corresponding notice of attachment with the Office of
the Register of Deeds of Manila, judgment was rendered in favor of Evangelista,
who, on October 8, 1951, bought the house at public auction held in compliance
with the writ of execution issued in said case. When Evangelista sought to take
possession of the house, Rivera refused to surrender it, upon the ground that he
had leased the property from the Alto Surety & Insurance Co., Inc. respondent
herein and that the latter is now the true owner of said property. On appeal
taken by respondent, this decision was reversed by the Court of Appeals, which
absolved said respondent from the complaint, upon the ground that, although
the writ of attachment in favor of Evangelista had been filed with the Register of
Deeds of Manila prior to the sale in favor of respondent, Evangelista did not
acquire thereby a preferential lien, the attachment having been levied as if the
house in question were immovable property, although in the opinion of the Court
of Appeals, it is "ostensibly a personal property. However, the Court of Appeals
seems to have been of the opinion, also, that the house of Rivera should have
been attached in accordance with subsection (c) of said section 7, as "personal
property capable of manual delivery, by taking and safely keeping in his
custody", for it declared that "Evangelists could not have . . . validly purchased

Ricardo Rivera's house from the sheriff as the latter was not in possession
thereof at the time he sold it at a public auction."
Issue : the main issue before us is whether a house, constructed the lessee of
the land on which it is built, should be dealt with, for purpose, of attachment, as
immovable property, or as personal property.

Held: It is, our considered opinion that said house is not personal property,
much less a debt, credit or other personal property not capable of manual
delivery, but immovable property. As explicitly held, in Laddera vs. Hodges (48
Off. Gaz., 5374), "a true building (not merely superimposed on the soil) is
immovable or real property, whether it is erected by the owner of the land or by
usufructuary or lessee. personal property.

These considerations notwithstanding, we hold that the rules on execution do

not allow, and, we should not interpret them in such a way as to allow, the
special consideration that parties to a contract may have desired to impart to
real estate, for example, as personal property, when they are, not ordinarily so.
Sales on execution affect the public and third persons. The regulation governing
sales on execution are for public officials to follow. The form of proceedings
prescribed for each kind of property is suited to its character, not to the
character, which the parties have given to it or desire to give it. When the rules
speak of personal property, property which is ordinarily so considered is meant;
and when real property is spoken of, it means property which is generally known
as real property. The regulations were never intended to suit the consideration
that parties may have privately given to the property levied upon. We, therefore,
declare that the house of mixed materials levied upon on execution, although
subject of a contract of chattel mortgage between the owner and a third person,
is real property within the purview of Rule 39, section 16, of the Rules of Court
as it has become a permanent fixture of the land, which, is real property