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LOPEZ V.

OROSA AND PLAZA


THEATRE
103 SCRA 98
FACTS:
1. Lopez was engaged in business under the name Lopez-Castelo Sawmill.
2. Orosa, who lived in the same province as Lopez, one dayapproached Lopez and invited the
latter to make an investment inthe theatre business.
3. Orosa, his family and close friends apparently were forming acorporation named Plaza
Theatre.
4. Lopez expressed his unwillingness to invest. Nonetheless, therewas an oral agreement
between Lopez and Orosa that Lopezwould be supplying the lumber for the construction of the
theatre.The terms were the following: one, Orosa would be personallyliable for any account that
the said construction would incur; two,payment would be by demand and not by cash on
delivery.
5. Pursuant to the agreement, Lopez delivered the lumber for theconstruction. Lopez was only
paid one-third of the total cost.
6. The land on which the building has been erected was previously owned by Orosa, which was
later on purchased by the corporation.
7. Due to the incessant demands of Lopez, the corporation mortgaged its properties.
8. On an earlier relevant date, the corporation obtained a loan with Luzon Surety Company as
surety and in turn, the corporation executed a mortgage over the land and building. In the
registration of the land under Act 496, such mortgage wasnt revealed.
9. Also due to the demands of Lopez, Orosa issued a deed of assignment over his shares of stock
in the corporation.
10. As there was still an unpaid balance, Lopez filed a case against Orosa and Plaza theatre. He
asked that Orosa and Plaza theatre be held liable solidarily for the unpaid balance; and in case
defendants failed to pay, the land and building should be sold in public auction with the proceeds
to be applied to the balance; or
that the shares of stock be sold in public auction. Lopez also had lis pendens be annotated in the
OCT.
11. The trial court decided that there was joint liability between defendants and that the
materialmans lien was only confined tothe building.
ISSUES:
W/N the materialmens lien for the value of the materials used in the construction of the building
attaches to said structure alone and doesnt extend to the land on which the building is adhered
to?

HELD:
The contention that the lien executed in favor of the furnisher of materials used for the
construction and repair of a building is also extended to land on which the building was
constructed is without merit. 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 in the
enumeration of what may constitute real properties could only mean one thingthat a building is
by itself an immovable property. Moreover, in the absence of
any specific provision 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.
Appelant invoked Article 1923 of the Spanish Civil Code, which providesWith respect to
determinate real property and real rights of the debtor, the following are preferred: xxx Credits
for reflection, not entered or recorded, and only with respect to other credits different from those
mentioned in four next preceding paragraphs. Close examination of the abovementioned
provision reveals that the law gives preference to unregistered refectionary credits only with
respect to the real estate upon which the refectionary 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. 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.
TUMALAD V. VICENCIO
41 SCRA 143
FACTS:
Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their
house, which was being rented by Madrigal and company. This was executed to guarantee
a loan, payable in one year with a 12% per annum interest.

The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house was sold at a
public auction and the plaintiffs were the highest bidder. A corresponding certificate of sale
was issued. Thereafter, the plaintiffs filed an action for ejectment against the defendants, praying
that the latter vacate the house as they were the proper owners.

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.

BOARD OF ASSESSMENT
APPEALS V. MANILA
ELECTRIC COMPANY
10 SCRA 68

FACTS:
City Assessor of QC declared the steel towers for real property tax under Tax Declarations. After
denying the respondents petition to cancel these declarations, an appeal was taken with the CTA
which held that the steel towers come under the exception of poles under the franchise
given to MERALCO; the steel towers are personal properties; and the City Treasurer is liable for the
refund of the amount paid.

HELD:
The steel towers of an electric company dont constitute real property for the purposes of real
property tax.