CASE #8

ENRIQUE LOPEZ vs VICENTE OROSA JR. AND PLAZA THEATRE, INC.

PROMULGATED: FEBRUARY 28, 1958
PONENTE: J. FELIX
This is a petition for review by certiorari of a decision of the Court of Appeals.
Petitioner, Enrique Lopez, is a resident of Balayan, Batangas, doing business
under the trade name of Lopez-Castelo Sawmill. In 1946, respondent, Vicente Orosa,
invited petitioner to make an investment in the theatre business. Although Lopez
expressed his unwillingness to engage in such venture (i.e. investing at Plaza Theatre,
Inc.), he agreed to supply the lumber necessary for the construction of the proposed
theatre, and at Orosas 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 the
verbal agreement, petitioner delivered the lumber for construction. The land, on which
the theatre stands, was later sold to a corporation. Of the total costs of P62, 255.85,
only P20, 848.50 was paid. Orosa and Belarmino Rustia, the president of the
corporation, promised Lopez that they will obtain a loan by mortgaging the properties of
the Plaza Theatre, Inc. to which the balance would be satisfied. Unknown to petitioner,
the corporation had already got a loan in the amount of P30.000 from the Philippine
National Bank with the Luzon Surety Corporation as surety, and the corporation in turn
executed a mortgage on the land and building in favor of said company as counter-
security. The Torrens system was not in operation at that time, the mortgage was
registered under Act No. 3344 and when the corporation subsequently applied under
Act No. 496, the mortgage was not revealed and the Original Certificate of Title was
issued without any encumbrance appearing thereon. As the amount remained
unsettled, petitioner filed a complaint with CFI of Batangas against herein respondents
praying that they be sentenced to pay him jointly and severally of the unpaid balance;
and in case they failed to pay, the land and building owned by the corporation be sold
in a public auction with the proceeds be applied to the balance; or the shares of stock
be sold in public auction. The lower court held that defendants are jointly liable for the
unpaid balance and petitioner acquired material mans lien over the construction. The
lien was confined only to the building and does not extend to the land.
WHETHER THE MATERIAL MANS LIEN FOR THE VALUE OF THE
MATERIALS USED IN THE CONSTRUCTION OF THE BUILDING EXTENDS TO THE
LAND ON WHICH THE BUILDING IS ADHERED TO?

No, it could only be charged only to the building for which the credit was made
or which received the benefit of refection. Real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building in the enumeration
of what may constitute real properties could only mean that a building by itself is an
immovable property. In the absence of a contrary stipulation, a building is an immovable
property irrespective of whether or not the building and the land on which it adhered to
belong to the same owner.