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PRUDENTIAL BANK, petitioner vs. HON.

ISSUE: Whether the chattel mortgage was null and


DOMINGO D. PANIS, FERNANDO void because only personal properties can be subject of
MAGCALE & TEODULA BALUYUT- a chattel mortgage.
MAGCALE, respondents.
G.R. No. L-50008. August 31, 1987. PARAS, J. HELD: The inclusion of the building, separate and
distinct from the land, in the enumeration of what may
FACTS: On November 19, 1971, spouses Fernando A. constitute real properties could only mean one thing —
Magcale and Teodula Baluyut-Magcale secured a loan that a building is by itself an immovable property
in the sum of P70,000.00 from Prudential Bank. To irrespective of whether or not said structure and the
secure payment of this loan, the Spouses executed in land on which it is adhered to belong to the same
favor of Prudential Bank a deed of Real Estate owner. Certain deviations have been allowed from the
Mortgage over the several properties. For failure to pay general doctrine that buildings are immovable property
their obligation to the Bank, the deeds of Real Estate such as when through stipulation, parties may agree to
Mortgage were extrajudicially foreclosed. Respondent treat as personal property those by their nature would
Court declared the deeds as null and void. be real property. This is partly based on the principle of
estoppel. It should be noted, however, that the
ISSUE: Whether or not a valid real estate mortgage can principle is predicated on statements by the owner
be constituted on the building erected on the land declaring his house to be a chattel, a conduct that may
belonging to another. conceivably estop him from subsequently claiming
otherwise.
HELD: In the enumeration of properties under Article
415 of the Civil Code of the Philippines, this Court Here, while there was no specific statement referring to
ruled that, "it is obvious that the inclusion of "building" the house as personal property, the ceding, selling, or
separate and distinct from the land, in said provision of transferring of property through chattel mortgage
law can only mean that a building is by itself an means that the defendant conveys the house as chattel
immovable property. Thus, while it is true that a or at least intended to treat the same as such. Applying
mortgage of land necessarily includes, in the absence of the principle of estoppel, any inconsistent claim
stipulation of the improvements thereon, buildings, still pertaining to the matter shall not be allowed.
a building by itself may be mortgaged apart from the
land on which it has been built. Such a mortgage would LEON SIBAL, plaintiff-appellant vs. EMILIANO J.
be still a real estate mortgage for the building would still VALDEZ ET AL., defendants.
be considered immovable property even if dealt with G.R. No. L-26278. August 4, 1927. JOHNSON, J.
separately and apart from the land. In the same manner,
this Court has also established that possessory rights FACTS: Vitaliano Mamawal, by virtue of a writ of
over said properties before title is vested on the grantee, execution issued by CFI Pampanga, attached and sold
may be validly transferred or conveyed as in a deed of to Emiliano J. Valdez the sugar cane planted by Sibal
mortgage. and his tenants on seven parcels of land. Sibal prayed
that a writ of preliminary injunction be issued against
GAVINO A. TUMALAD and GENEROSA R. Valdez et. al., restraining them (1) from distributing him
TUMALAD, plaintiffs-appellees vs. ALBERTA in the possession of the parcels of land described in the
VICENCIO and EMILIANO SIMEON, defendants- complaint; (2) from taking possession of, or harvesting
appellants. the sugar cane in question; and (3) from taking
G.R. No. L-30173. September 30, 1971. REYES, possession, or harvesting the palay in said parcels of
J.B.L., J. land. Valdez by way of counterclaim, alleged that by
reason of the preliminary injunction he was unable to
FACTS: Vicencio and Simeon executed a chattel gather the sugar cane, sugar-cane shoots, and palay in
mortgage in favor of plaintiffs Tumalad over their said parcels of land, representing a loss to him of
house, which was being rented by Madrigal et. al. This P8,375.20 and that, in addition thereto, he suffered
was executed to guarantee a loan, payable in one year damages amounting to P3,458.56. He prayed, for a
with a 12% per annum interest. The mortgage was judgment absolving him from all liability under the
extrajudicially foreclosed upon failure to pay the loan. complaint.
The house was sold at a public auction and the plaintiffs
were the highest bidder. A corresponding certificate of ISSUE: Whether the sugar cane in question is personal
sale was issued. Thereafter, the plaintiffs filed an action or real property.
for ejectment against the defendants, praying that the
latter vacate the house as they were the proper owners. HELD: It is contended that sugar cane comes under
the classification of real property as "ungathered

Katrina Andrea L. Bringas


University of Santo Tomas
Faculty of Civil Law
products" in paragraph 2 of article 334 of the Civil the law also requires that the industry or works be
Code. Said paragraph enumerates as real property the carried on in a building or on a piece of land.
following: trees, plants, and ungathered products, while
they are annexed to the land or form an integral part of In this case, the equipment in question are destined only
any immovable property. The article, however, has to repair or service the transportation business, which
received in recent years an interpretation by the is not carried on in a building or permanently on a piece
Tribunal Supremo de España, which holds that, under of land, as demanded by the law. Said equipment may
certain conditions, growing crops may be considered as not, therefore, be deemed real property and therefore,
personal property. cannot be the subject of assessment for purposes of real
estate tax.
Act No. 1508, the Chattel Mortgage Law, fully
recognized that growing crops are personal property.
Section 2 of said Act provides: "All personal property
shall be subject to mortgage, agreeably to the provisions
of this Act, and a mortgage executed in pursuance
thereof shall be termed a chattel mortgage." Section 7
in part provides: "If growing crops be mortgaged the
mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and
protect the crop while growing.

The SC held that paragraph 2 of article 334 of the Civil


Code has been modified by section 450 of the Code of
Civil Procedure and by Act No. 1508, in the sense that,
for the purpose of attachment and execution, and for
the purposes of the Chattel Mortgage Law, "ungathered
products" have the nature of personal property. The
lower court, therefore, committed no error in holding
that the sugar cane in question was personal property
and, as such, was not subject to redemption.

MINDANAO BUS COMPANY, petitioner vs. THE


CITY ASSESSOR et. al., respondents.
G.R. No. L-17870. September 29, 1962.
LABRADOR, J.

FACTS: Mindanao Bus Company filed a petition for


review on the decision of the CTA holding it liable for
the payment of realty tax on its maintenance and repair
equipment.

ISSUE: Whether the maintenance and repair


equipment is a real or immovable property to which a
real estate tax may not be imposed.

HELD: Art. 415, par. 5 states that machinery,


receptacles, 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 deemed immovable properties.

Movable equipment, 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. Aside from the element of essentiality

Katrina Andrea L. Bringas


University of Santo Tomas
Faculty of Civil Law