1. Laurel v.
Abrogar
FACTS
Laurel was charged with Theft under Art. 308 of the RPC for allegedly
taking, stealing, and using PLDT's international long distance calls by
conducting International Simple Resale (ISR) – “a method of outing and
completing international long-distance calls using lines, cables,
antennae, and/or air wave frequency which connect directly to the
local/domestic exchange facilities of the country where the call is
destined”. PLDT alleged that this service was stolen from them using
their own equipment and caused damage to them amounting to
P20,370,651.92.
PLDT alleges that the international calls and business of providing
telecommunication or telephone service are personal properties
capable of appropriation and can be objects of theft.
ISSUE
WON Laurel's act constitutes Theft
HELD
Art.308, RPC: Theft is committed by any person who, with intent to
gain but without violence against, or intimidation of persons nor force
upon things, shall take personal property of another without the latter’s
consent.
Elements of Theft under Art.308, RPC:
1. There be taking of Personal Property;
2. Said Personal Property belongs to another;
3. Taking be done with Intent to Gain;
4. Taking be done without the owner’s consent;
5. No violence against, or intimidation of, persons or force upon
things
Personal Property – anything susceptible of appropriation and not
included in Real Property
Thus, the term “personal property” as used in Art.308, RPC should be
interpreted in the context of the Civil Code's definition of real and
personal property. Consequently, any personal property, tangible or
intangible, corporeal or incorporeal, capable of appropriation may be
the subject of theft (*US v Carlos; US v Tambunting; US v Genato*), so
long as the same is not included in the enumeration of Real Properties
under the Civil Code.
The only requirement for personal property to capable of theft, is that
it be subject to appropriation.
Art. 416 (3) of the Civil Code deems “Forces of Nature” which are
brought under the control of science, as Personal Property.
The appropriation of forces of nature which are brought under control
by science can be achieved by tampering with any apparatus used for
generating or measuring such forces of nature, wrongfully redirecting
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such forces of nature from such apparatus, or using any device to
fraudulently obtain such forces of nature.
In the instant case, the act of conducting ISR operations by illegally
connecting various equipment or apparatus to PLDT’s telephone
system, through which petitioner is able to resell or re-route
international long distance calls using PLDT’s facilities constitute
Subtraction.
Moreover, interest in business should be classified as personal property
since it is capable of appropriation, and not included in the
enumeration of real properties.
Therefore, the business of providing telecommunication or telephone
service are personal property which can be the object of theft under
Art. 308 of the RPC. The act of engaging in ISR is an act of “subtraction”
penalized under the said article.
While international long-distance calls take the form of electrical
energy and may be considered as personal property, the said long-
distance calls do not belong to PLDT since it could not have acquired
ownership over such calls. PLDT merely encodes, augments, enhances,
decodes and transmits said calls using its complex communications
infrastructure and facilities.
Since PLDT does not own the said telephone calls, then it could not
validly claim that such telephone calls were taken without its consent.
What constitutes Theft is the use of the PLDT's communications
facilities without PLDT's consent. The theft lies in the unlawful taking of
the telephone services & businesses.
The Amended Information should be amended to show that the
property subject of the theft were services and business of the offended
party, and not international long distance calls. [Remanded to lower ct]
2. Leung Yee v. Strong Machinery
In 1913, Compania Agricola Filipina (CAF) was indebted to two
personalities: Leung Yee and Frank L. Strong Machinery Co. CAF
purchased some rice cleaning machines from Strong Machinery. CAF
installed the machines in a building. As security for the purchase price,
CAF executed a chattel mortgage on the rice cleaning machines
including the building where the machines were installed. CAF failed to
pay Strong Machinery, hence the latter foreclosed the mortgage – the
same was registered in thechattel mortgage registry.

CAF also sold the land (where the building was standing) to Strong
Machinery. Strong Machinery took possession of the building and the
land.
On the other hand, Yee, another creditor of CAF who engaged in the
construction of the building, being the highest bidder in an auction
conducted by the sheriff, purchased the same building where the
machines were installed. Apparently CAF also executed a chattel
mortgage in favor Yee. Yee registered the sale in the registry of land.
Yee was however aware that prior to his buying, the property has been
sold in favor of Strong Machinery – evidence is the chattel mortgage
already registered by Strong Machinery (constructive notice).
ISSUE: Who is the owner of the building?
HELD: The SC ruled that Strong Machinery has a better right to the
contested property. Yee cannot be regarded as a buyer in good faith as
he was already aware of the fact that there was a prior sale of the same
property to Strong Machinery.
The SC also noted that the Chattel Mortgage Law expressly
contemplates provisions for chattel mortgages which only deal with
personal properties. The fact that the parties dealt the building as if it’s
a personal property does not change the nature of the thing. It is still a
real property. Its inscription in the Chattel Mortgage registry does not
modify its inscription the registry of real property.
3. Prudential Bank v. Panis
FACTS:
Spouses Magcale secured a loan from Prudential Bank. To secure
payment, they executed a real estate mortgage over a residential
building. The mortgage included also the right to occupy the lot and
the information about the sales patent applied for by the spouses for
the lot to which the building stood. After securing the first loan, the
spouses secured another from the same bank. To secure payment,
another real estate mortgage was executed over the same properties.
The Secretary of Agriculture then issued a Miscellaneous Sales Patent
over the land which was later on mortgaged to the bank.
The spouses then failed to pay for the loan and the REM was
extrajudicially foreclosed and sold in public auction despite opposition
from the spouses. The respondent court held that the REM was null
and void.
ISSUE:
Whether or not a valid RE mortgage can be constituted on the building
erected on the belonging to another.
HELD:
A real estate mortgage can be constituted on the building erected on
the land belonging to another.
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,
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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.
4. People’s Bank v. Dahican
Dahican lumber company (DAMCO) obtained several loans amounting
to 250,000pesos from People·s bank (BANK) and ,together with DALCO,
another loan amounting to$250,000 from Export-Import bank secured
by five promissory notes through people·s bank. In both loans, DAMCO
executed and registered respective mortgages with inclusion of ´after
acquired propertiesµ. DAMCO and DALCO failed to satisfy the fifth
promissory note in favor of Export bank so People·s bank paid it and
subsequently filed an action for the foreclosure of the mortgaged
properties of DAMCO including the after acquired machinery,
equipment and spare parts upon the latter's failure to fulfill its
obligation.
B. Contention of the Petitioner
People·s bank asserted that the ´after acquiredµ machinery and
equipment of DAMCO are subject to the deed of mortgage executed by
DAMCO. Hence, these can be included in the foreclosure proceedings.
C. Contentions of the Respondent
DALCO argued that the mortgages were void as regards the after
acquired properties because they were not registered in accordance
with the chattel mortgage law. Moreover ,provision of the fourth
paragraph of each of said mortgages did not automatically make
subject to such mortgages the "after acquired properties", the only
meaning thereof being that the mortgagor was willing to constitute a
lien over such properties.
ISSUES TO BE RESOLVED
Whether the ´after acquiredµ machinery and equipment of DAMCO are
included as subject of the Real Estate mortgage, thus can be foreclosed.
THE SUPREME COURT:
Judgment rendered in favor of Plaintiff People·s bank. The after
acquired machinery and equipment are included in the executed
mortgages. It is not disputed in the case at bar that the "after acquired
properties" were purchased by DALCO in connection with, and for use
in the development of its lumber concession and that they were
purchased in addition to, or in replacement of those already existing in
the premises on July 13, 1950.
In Law, therefore, they must be deemed to have been immobilized,
with the result that the real estate mortgages involved herein ³ which
were registered as such ³ did not have to be registered a second time
as chattel mortgages in order to bind the "after acquired properties"
and affect third parties. Under the fourth paragraph of both deeds of
mortgage, it is crystal clear that all property of every nature and
description taken in exchange or replacement, as well as all buildings,
machineries, fixtures, tools, equipments, and other property that the
mortgagor may acquire, construct, install, attach; or use in, to upon, or
in connection with the premises ³ that is, its lumber concession ³ "shall
immediately be and become subject to the lien" of both mortgages in
the same manner and to the same extent as if already included therein
at the time of their execution.
As the language thus used leaves no room for doubt as to the intention
of the parties, We see no useful purpose in discussing the matter
extensively. Suffice it to say that the stipulation referred to is common,
and We might say logical, in all cases where the properties given as
collateral are perishable or subject to inevitable wear and tear or were
intended to be sold, or to be used ³ thus becoming subject to the
inevitable wear and tear ³ but with the understanding³ express or
implied ³ that they shall be replaced with others to be thereafter
acquired by the mortgagor. Such stipulation is neither unlawful nor
immoral, its obvious purpose being to maintain, to the extent allowed
by circumstances, the original value of the properties given as security.
Indeed, if such properties were of the nature already referred to, it
would be poor judgment on the part of the creditor who does not see
to it that a similar provision is included in the contract.
5. Board of Assessment v. Meralco
land, and which tend directly to meet the needs of the said

FACTS industry or works;

On November 15, 1955, the QC City Assessor declared the MERALCO's

steel towers subject to real property tax. After the denial of Following these classifications, MERALCO's steel towers should be

MERALCO's petition to cancel these declarations, an appeal was taken considered personal property. It should be noted that the steel towers:

to the QC Board of Assessment Appeals, which required respondent to (a) are neither buildings or constructions adhered to the soil;

pay P11,651.86 as real property tax on the said steel towers for the

years 1952 to 1956. (b) are not attached to an immovable in a fixed manner – they

MERALCO paid the amount under protest, and filed a petition for can be separated without breaking the material or

review in the Court of Tax Appeals (CTA) which rendered a decision deterioration of the object;

ordering the cancellation of the said tax declarations and the

refunding to MERALCO by the QC City Treasurer of P11,651.86. © are not machineries, receptacles or instruments, and even if

ISSUE they are, they are not intended for an industry to be carried on

Are the steel towers or poles of the MERALCO considered real or in the premises.

personal properties?

HELD

Pole – long, comparatively slender, usually cylindrical piece of wood,

timber, object of metal or the like; an upright standard to the top of

which something is affixed or by which something is supported.

MERALCO's steel supports consists of a framework of 4 steel bars/strips

which are bound by steel cross-arms atop of which are cross-arms

supporting 5 high-voltage transmission wires, and their sole function is

to support/carry such wires. The exemption granted to poles as quoted

from Part II, Par.9 of respondent's franchise is determined by the use

to which such poles are dedicated.

It is evident that the word “poles”, as used in Act No. 484 and

incorporated in the petitioner's franchise, should not be given a

restrictive and narrow interpretation, as to defeat the very object for

which the franchise was granted. The poles should be taken and

understood as part of MERALCO's electric power system for the

conveyance of electric current to its consumers.

Art. 415 of the NCC classifies the following as immovable property:

(1) Lands, buildings, roads and constructions of all kinds

adhered to the soil;

xxx

(3) Everything 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;

xxx

(5) Machinery, receptacles, instruments or implements

intended by the owner pf the tenement for an industry ot

works which may be carried on in a building or on a piece of

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