Property Cases Flashcards
Article 415
PRUDENTIAL BANK V. Judge PANIS 1987
whether or not a valid real estate mortgage can be constituted on the building erected on the land belonging to the government
FACTS:
- Plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan from the defendant Prudential Bank by executing a Real Estate Mortgage over their house and lot(where there is a pending sales patent)
- Plaintiffs secured an additional loan from defendant by executing another Real Estate Mortgage over the same properties
- For failure of plaintiffs to pay, the (2) deeds of Real Estate Mortgage were sold at public auction.
- Respondent Court declared the deeds of Real Estate Mortgage as null and void
RULING:
Yes. Under Article 415 of the Civil Code, the inclusion of “building” separate and distinct from the land means that a building is by itself an immovable property.
A building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would be still a real estate mortgage.
Hence, The mortgage executed on the building which was erected on the land belonging to the government is a valid mortgage.
However, the second mortgage in so far it was executed after the issuance of the sales patent is null and void as it falls under the prohibitions in the Public Land Act.
Article 1544
Leung Yee vs. Strong Machinery 1918
Who owns the land in this case
Compañia Agricola Filipina - A; Machinery Company - B; Plaintiff - C
- A bought a rice-cleaning machinery company from B and executed a chattel mortgage upon the machineries which included the building to secure payment of the purchase price. Unable to pay, pursuant to the chattel mortgage agreement, the property was sold to B. The deed of sale was registered.
- Weeks later, A executed a deed of sale of the land to B but was not registered.
- At the time when the chattel mortgage was executed, A executed another mortgage to C upon the building to secure payment of the balance of its indebtedness to C under a contract for the construction of the building. Upon default, C sought the execution of judgment upon the building. Despite protests from B, The building was sold in public auction to C, as highest bidder and certificate of sale was duly registered.
- C filed an action to recover the building from B.
Who owns the land and building?
RULING:
B owns the land and Building.
Under Article 1473 (now Article 1544) of the Civil Code :
In case of double sale, ownership shall be transferred accordingly:
- If personal property, to the one who first took possesion in good faith
- If real property, to the one who first registered in good faith
- In the absence thereof, to the one who first took possession in good faith,
- In the absence thereof, to the one who presents the oldest title, in good faith
Since C had full knowledge of B’s claim of ownership when he executed the indemnity bond and bought in the property at the sheriff’s sale, he cannot be said to have been an innocent purchaser for value.
Hence, considering that B bought the machineries which included the Building from A and that he is the one who first took possession of both the land and building, he is deemed to be owner of the same under Article 1544.
Note:
Instances where a Buyer is in Bad Faith: One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.
Article 415
YAP V. JUDGE TANADA, 163 SCRA 464 (1988)
w/n the the pump is considered an immovable, thus the requisite advertisement/notice of sale under the Rules of Court applies to subject pump
- Respondent Goulds Pumps filed a complaint against Petitioner Julian S. Yap for money claims representing the balance of the price and installation cost of a water pump.
- Respodent Judge Tañada issued an Order granting Goulds’ Motion for Issuance of Writ of Execution
- On appeal, Yap seeks to annul the writ of execution as it was granted without the requisite notice prescribed for the sale of immovables
RULING:
No. 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 or deterioration.
The pump could be separated without being broken. It could be easily removed by the loosening of bolts.
Article 415
NAVARRO vs. PINEDA, 1963
w/n the deed of real estate and chattel mortgages appended to the complaint is valid, despite the fact that the housewas made the subject of the chattel mortgage
FACTS:
- Defendants Rufino G. Pineda and his mother Juana Gonzales, secured a loan from Plaintiff Conrado P. Navarro by executing DEED OF REAL ESTATE and CHATTEL MORTGAGES”, upon a land owned by Gonzales and upon a Pineda’s house erected on a lot belonging to Atty. Vicente Castro.
- Upon Default, plaintiff filed a complaint for foreclosure of the mortgage
RULING:
Yes, a house may be treated as personal property by the contracting parties under the principle of estopel
In the deed of chattel mortgage, it was stated that “my personal properties”, a residential house and a truck shall be conveyed by way of chattel mortgage.
LUNA V. JUDGE ENCARNACION 1952
w/m extra-judicial sale of a “chattel”, having been conducted under the provisions of Act No. 3135, as amended by Act No. 4118, is invalid because the mortgage in question is not a real estate mortgage
FACTS:
- to secure the payment of a promissory note, Petitioner Jose A. Luna executed a chattel mortgage in favor of Respodent Trinidad Reyes upon a certain house of mixed materials
- Unable to pay, the house was sold at public auction.
- After the period for the redemption of the property had expired, the surrender of the possession of the property,
- Luna filed a petition on the ground that said extra-judicial sale having been conducted under the provisions of Act No. 3135, as amended by Act No. 4118, is invalid because the mortgage in question is not a real estate mortgage
RULING:
No. The sale is still valid.
The Chattel Mortgage Law allows an extrajudicial sale in the same manner as Act No. 3135, as amended by Act No. 4118,
Article 415
MERALCO VS BOAA (Board of Assesment Appeals) 1982
w/n oil storage tanks can be imposed real property tax
FACTS:
This case is about the imposition of the realty tax on two oil storage tanks installed by Manila Electric Company on a lot in which it leased to Caltex . They are used for storing fuel oil for Meralco’s power plants.
RULING:
Yes. Oil tanks may be considered as improvements on the land, enhancing its utility because it is installed with some degree of permanence as receptacles for oil.
Davao Sawmill. vs. Castillo 1935
w/n the machineries mounted on foundations of cement placed by petitioner-tenant is immovable, thus shall belong to the owner of the land by virtue of said lease contract
- Petitioner Davao Saw Mill Co., erected a building which housed the machinery used by it. However, the land belonged to another person. The contract of lease provides: That on the expiration of the period agreed upon, all the improvements and buildings introduced and erected by second party shall pass to the exclusive ownership of the first party.
- Some machineries were mounted on foundations of cement.
RULING:
No. Machinery which is movable by nature only becomes immobilized when placed by the owner of the property, 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.
Article 415
Ago vs. Court of Appeals 1962
w/n the machineries installed by Golden Pacific Sawmill became real estate properties, thus making the sheriff’s sale void
- Petitioner Pastor D. Ago bought sawmill machineries. To secure payment, he executed chattel mortgage on the same.
- Defaulted in his payment, respondent Grace Park Engineering, instituted extra-judicial foreclosure proceedings.
- respondent Sheriff levied upon and ordered the sale of the sawmill machineries
- However, Petitioner sold the machineries and equipments Golden Pacific Sawmill which installed the same on their sawmill building
RULING:
Yes. The installment of the sawmill machineries in the building of the Gold Pacific Sawmill, for use in the sawing of logs, the same became a necessary and permanent part of the building, converting the said machineries and equipments into real estate within the meaning of Article 415(5)
Considering that the machineries and equipments appear to have been sold without the necessary advertisement of sale as required in Sec. 16 of Rule 39 of the Rules of Court, the sale made by the sheriff must be declared null and void.
Board of Assessment Appeals vs. Meralco 1964
whether Meralco’s steel towers constitute real properties, so that they can be subject to a real property tax.
FACTS:
- The respondent Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it.
- petitioner City Assessor of Quezon City declared the aforesaid steel towers for real property tax
RULING:
No. The Steel Towers are not real properties as they are not considered immovable property under 415 of the Civil Code.
First, they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place.
Second, they are not attached to an immovable in a fixed manner, and they can be separated without breaking or detoriation.
Third, they are not machineries and even if they were, they are not intended for industry or works on the land. Meralco is not engaged in an industry or works in the land in which the steel towers are constructed.
MAKATI LEASING v. WEAREVER 1983
whether a machinery which is immovable by nature can be treated as personal property if no 3rd parties are prejudiced.
- To secure the collection of the receivables assigned, respondent Wearever Textile Mills executed a Chattel Mortgage over a machinery described as an Artos Aero Dryer Stentering Range.
- Upon default, petitioner filed a petition for extrajudicial foreclosure of the properties mortgage to it.
- However, the Sheriff failed to gain entry into respondent’s premises and was not able to effect the seizure of the machinery.
- Petitioner thereafter filed a complaint for judicial foreclosure with Replevin
- The sheriff d removed the main drive motor of the subject machinery.
- On Appeal, the CA ordered the return of the drive motor ruling that the machinery cannot be the subject of replevin, much less of a chattel mortgage, because it is a real property as the only way to remove it is to 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.
RULING:
Yes. Like a house, a machinery may be treated as personal property in a chattel mortgage provided that the parties agree and no third party will be prejudiced.
This is because one who has agreed is estopped from denying the existence of the chattel mortgage.
Even assuming that respondent had been required “to sign a printed form of chattel mortgage which was in a blank form at the time of signing.”, such fact alone does not render a contract void ab initio, but can only be a ground for rendering said contract voidable.
Serg’s Products, vs. PCI Leasing 2000
subject machines used in their factory were proper subjects of the Writ of Replevin, because they were treated as personal property in the lease agreement
Yes. Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein.
After agreeing to a contract stipulating that a real property is treated as personal, a party is estopped from subsequently claiming otherwise.
the Lease Agreement clearly provides that the machines are to be considered as personal property.
Hence, such property is a proper subject of a writ of replevin.
NOTE: However, it must be remembered that third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. There is no showing that any specific third party would be adversely affected.
Tumalad vs. Vicencio 1971
w/n the chattel mortgage was null and void because only personal properties can be subject of a chattel mortgage.
- Petitioner Tumalad executed a chattel mortgage in favor of Respondent Vicencio over their house of strong materials, which were being rented from Madrigal & Company, Inc.
- Upon Default, the house extra-judicially forclosed and was sold at public auction to respodent as highest bidder.
RULING:
No. A house of strong materials 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,
This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage.
Lopez v. Orosa & Plaza Theatre, 103 SCRA 98
lien is also extended to the land which the construction was made
- Petitioner Lopez he agreed to supply the lumber necessary for the construction of the proposed theatre, 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.
- We may state at this juncture that the Plaza Theatre was erected on a piece of land with an area of 679.17 square meters formerly owned by Vicente Orosa, Jr., and was acquired by the corporation on September 25, 1946, for P6,000.
- 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.,
- 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,
- 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;
Defendants Vicente Orosa, Jr. and Plaza Theatre, Inc., filed separate answers, the first denying that the materials were delivered to him as a promoter and later treasurer of the corporation, because he had purchased and received the same on his personal account; that the land on which the movie house was constructed was not charged with a lien to secure the payment of the aforementioned unpaid obligation; and that the 420 shares of stock of the Plaza Theatre, Inc., was not assigned to plaintiff as collaterals but as direct security for the payment of his indebtedness. As special defense, this defendant contended that as the 420 shares of stock assigned and conveyed by the assignor and accepted by Lopez as direct security for the payment of the amount of P41,771.35 were personal properties, plaintiff was barred from recovering any deficiency if the proceeds of the sale thereof at public auction would not be sufficient to cover and satisfy the obligation. It was thus prayed that he be declared exempted from the payment of any deficiency in case the proceeds from the sale of said personal properties would not be enough to cover the amount sought to be collected.
7.
FELS ENERGY INC. vs PROVINCE OF BATANGAS, G.R. No. 168557, Feb. 16, 2007
VILLANUEVA v. CASTANEDA, JR., 154 SCRA 142 (1987)