Lopez vs Orosa Civil Law Digest

Lopez vs. Orosa; Property 8/15/2013 0 Comments G.R.

Nos.

L-10817-18

February

28,

1958

Facts: Petitioner Lopes was doing business under the name Castelo Sawmill . The case started when respondent Orosa invited petitioner to join his venture of putting up a corporation which will be named as Plaza Theater Corporation. Petitioner declined the offer but he offered to produce with pay, lumbers which will be needed in construction of the theater. Despite demands of payment from petitioner, respondents defaulted in their obligation and to calm the former's feeling they promised to obtain a loan inorder to pay their obligation to petitioner. However, unknown to petitioner, respondent had already obtained a loan and made Luzon Surety Company as surety. The lot where the theater stands was used as a security. Petitioner remained unpaid, thus he file a case against respondents and Plaza Theater Inc. Moreover, petitioner cause the annotation of lis pendens on the lot and the bulinding of respondent corporation.

The surety company, in the meantime, upon discovery that the land was already registered under the Torrens System and that there was a notice of lis pendensthereon, filed a petition for review of the decree of the land registration court in order to annotate the rights and interests of the surety company over said properties . Opposition thereto was offered by petitioner Lopez, asserting that the amount demanded by him constituted a preferred lien over the properties of the obligors; that the surety company was guilty of negligence when it failed to present an opposition to the application for registration of the property; and that if any violation of the rights and interest of said surety would ever be made, same must be subject to the lien in his favor. The RTC ruled that the lien of petitioner extends only to the building. however, on appeal petitioner contends that the lien created in favor of the furnisher of the materials used for the construction, repair or refection of a building, is also extended to the land which the construction was made, and in support thereof he relies on Article 1923 of the Spanish Civil Code, pertinent law on the matter, which reads as follows: ART. 1923. With respect to determinate real property and real rights of the debtor, the following are preferred:

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5. Credits for refection, not entered or recorded, with respect to the estate upon which the refection was made, and only with respect to other credits different from those mentioned in four preceding paragraphs. The CA affirmed the court a qou. Issue: Whether the lien of petitioner extends not only to the building but also to the respondent's lot. Held: No In affirming the decisions of the courts a quo, explained the SC- "we cannot subscribe to this view, 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, separate and distinct from the land, in the enumeration of what may constitute real properties could mean only one thing — that a building is by itself an immovable property, a doctrine already pronounced by this Court in the case ofLeung Yee vs. Strong Machinery Co., 37 Phil., 644. Moreover, and in view of the absence of any specific provision of law 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. A close examination of the provision of the Civil

Code [Art. 1923] invoked by appellant [Lopez] reveals that the law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refection 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. Evidently, 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. Considering the conclusion thus arrived at, i.e., that the materialman's lien could be charged only to the building for which the credit was made or which received the benefit of refection, the lower court was right in, holding at the interest of the mortgagee over the land is superior and cannot be made subject to the said materialman's lien.