Property Case Doctrines

Property: ImImmovable and Movable Case Doctrines I. IMMOVABLE PROPERTY

REAL PROPERTY UNDER PAR NO. 1; LANDS, BUILDINGS, ROADS AND CONSTRUCTIONS OF ALL KINDS ADHERING TO THE SOIL

A BUILDING IS ALWAYS IMMOVABLE

Lopez v. Orosa Building is separate and distinct from land 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 (cf. Leung Yee v. Strong Machinery). In 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.

Prudential Bank v. Panis

Building separate and distinct from the land In the enumeration of properties under Article 415 of the Civil Code of the Philippines, it is obvious that the inclusion of 'building' separate and distinct from the land, in said provision of law can only mean that a building is by itself an immovable property.

Leung Yee v. Strong Machinery

Building separate from land does not affect character as real property; Registry of chattel mortgage does not affect character of the building and the machineries installed therein The Chattel Mortgage Law contemplates and makes provision for mortgages of personal property; and the sole purpose and object of the chattel mortgage registry is to provide for the registry of "Chattel mortgages," mortgages of personal property executed in the manner and form prescribed in the statute. The building of strong materials in which the machinery was installed was real property, and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as real property. It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in that registry of the sale of the mortgaged property, had any effect whatever so far as the building was concerned.

BUILDING IS IMMOVABLE BY INCORPORATION

Bicerra v. Teneza

House is immovable property even if situated on land belonging to a different owner; Exception, when demolished A house is classified as immovable property by reason of its adherence to the soil on which it is built (Article 415, paragraph 1, Civil Code). This classification holds true regardless of the fact that the house may be situated on land belonging to a different owner. But once the house is demolished, as in this case, it ceases to exist as such and hence its character as an immovable likewise ceases.

BUILDING ON RENTED LAND IS STILL IMMOVABLE

Evangelista v. Alto Surety

House is not personal, but immovable property The house is not personal property, much less a debt, credit or other personal property not capable of manual delivery, but immovable property. As explicitly held, in Laddera vs. Hodges (48 OG 5374), "a

true building (not merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee. This is the doctrine in Leung Yee vs. Strong Machinery Company, 37 Phil., 644. The opinion that the house of Rivera should have been attached in accordance with subsection (c) of said section 7, as "personal property capable of manual delivery, by taking and safely keeping in his custody", for it declared that "Evangelista could not have validly purchased Ricardo Rivera's house from the sheriff as the latter was not in possession thereof at the time he sold it at a public auction” is untenable.

House may be considered personal property in a deed of chattel mortgage, but view is limited to parties Parties to a deed of chattel mortgage may agree to consider a house as personal property for purposes of said contract (Luna vs. Encarnacion, 48 OOG 2664; Standard Oil Co. of New York vs. Jaramillo, 44 Phil., 630; De Jesus vs. Juan Dee Co., Inc., 72 Phil., 464). However, this view is good only insofar as the contracting parties are concerned. It is based, partly, upon the principle of estoppel. Neither this principle, nor said view, is applicable to strangers to said contract.

INSTANCES WHERE BUILDING IS TREATED AS PERSONAL BY THE PARTIES GENERAL TEST, OF “MOVABLE” CHARACTER

Stadard Oil v. Jamarillo

Jaramillo, register of deeds, does not have judicial or quasi-judicial power to determine nature of document registered as chattel mortgage Section 198 of the Administrative Code, originally of Section 15 of the Chattel Mortgage Law (Act 1508 as amended by Act 2496), does not confer upon the register of deeds any authority whatever in respect to the "qualification," as the term is used in Spanish law, of chattel mortgages. His duties in respect to such instruments are ministerial only. The efficacy of the act of recording a chattel mortgage consists in the fact that it operates as constructive notice of the existence of the contract, and the legal effects of the contract must be discovered in the instrument itself in relation with the fact of notice. Registration adds nothing to the instrument, considered as a source of title, and affects nobody's rights except as a species of notice. Thus, it is duty for the register of deed to accept the proper fee and place the instrument on record, as his duties in respect to the registration of chattel mortgages are of a purely ministerial character; and no provision of law can be cited which confers upon him any judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage. It may be noted that in an administrative ruling by James Ostrand, Judge of the fourth branch of CFI Manila (9th Judicial District) and later Supreme Court Justice, provided the same position that the Register of Deeds has no authority to pass upon the capacity of the parties to a chattel mortgage which is presented to him for record. The issue where

the chattel mortgage is held ineffective against third parties as the mortgaged property is real instead of personal is a question determine by the courts of justice and mot by the register of deeds.

Issue whether interest is in nature of real property not relevant to the issue of placing the document on record in Chattel Mortgage In Leung Yee vs. Frank L. Strong Machinery, the Supreme Court held that where the interest conveyed is of the nature of real property, the placing of the document on record in the chattel mortgage register is a futile act. That decision is not decisive of the question before the Supreme Court, which has reference to the function of the register of deeds in placing the document on record.

CONSTRUCTION OF ALL KINDS ADHERED TO THE SOIL

Board of Assessment Appeals v. City Treasurer

Steel towers are not immovable property under paragraph 1, 3 and 5 The steel towers or supports do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to the soil. As per description, given by the lower court, they are removable and merely attached to a

square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. They can not be included under paragraph 3, as they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together by means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same. These steel towers or supports do not also fall under paragraph 5, for they are not machineries or receptacles, instruments or implements, and even if they were, they are not intended for industry or works on the land. Petitioner is not engaged in an industry or works on the land in which the steel supports or towers are constructed.

REAL PROPERTY UNDER NO. 2: TREES, PLANTS AND GROWING FRUITS. TREES AND PLANTS Sibal v. Valdez Paragraph 2, Article 334 of the Civil Code interpreted by the Tribunal Supremo de Espana as that growing crops may be considered as personal property Sugar cane may come under the classification of real property as "ungathered products" in paragraph 2 of article 334 of the Civil Code,

which enumerates as real property as "Trees, plants, and ungathered products, while they are annexed to the land or form an integral part of any immovable property." That article, however, has received in recent years an interpretation by the Tribunal Supremo de España, which holds that, under certain conditions, growing crops may be considered as personal property. (Decision of March 18, 1904, vol. 97, Civil Jurisprudence of Spain.) Thus, under Spanish authorities, pending fruits and ungathered products may be sold and transferred as personal property. Also, the Supreme Court of Spain, in a case of ejectment of a lessee of an agricultural land, held that the lessee was entitled to gather the Products corresponding to the agricultural year because said fruits did not go with the land but belonged separately to the lessee. And further, under the Spanish Mortgage Law of 1909, as amended, the mortgage of a piece of land does not include the fruits and products existing thereon, unless the contract expressly provides otherwise.

REAL PROPERTY UNDER NO. 3: EVERYTHING ATTACHED TO AN IMMOVABLE IN A FIXED MANNER ATTACHMENT MUST BE IN A FIXED MANNER Board of Assessment Appeals v. City Treasurer Steel towers are not immovable property under paragraph 1, 3 and 5 They can not be included under paragraph 3, as they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which

they are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together by means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same.

building or real estate on which the same was constructed, converting the said machineries and equipments into real estate within the meaning of Article 415(5) of the Civil Code of the Philippines.

Davao Sawmill v. Castillo REAL PROPERTY UNDER NO. 5: MACHINERIES, RECEPTACLES, INSTRUMENTS OR IMPLEMENTS THEY MUST BE DESTINED FOR USE IN THE INDUSTRY OR WORK

Movables must be placed by the owner

MOVABLES MUST BE PLACED BY THE OWNER

Standard Oil ruling key to issue on the character of the property It must be pointed out that Davao Sawmill should have registered its protest before or at the time of the sale of this property. It must further be pointed out that while not conclusive, the characterization of the property as chattels by Davao Sawmill is indicative of intention and impresses upon the property the character determined by the parties. In this connection the decision of the court in the case of Standard Oil vs. Jaramillo, whether obiter dicta or not, furnishes the key to such a situation.

Ago v. CA Sawmill machineries and equipment are real properties in accordance with Art. 415 (5) By reason of installment in a building, the said sawmill machineries and equipments became real estate properties in accordance with the provision of Art. 415(5) of the Civil Code. It is interpreted similarly to the case of Berkenkotter vs. Cu Unjieng e Hijos, where the Court held that the installation of the machinery and equipment in the central of the Mabalacat Sugar Company for use in connection with the industry carried by that company, converted the said machinery and equipment into real estate by reason of their purpose. In the present case, the installation of the sawmill machineries in the building of the Golden Pacific Sawmill, Inc., for use in the sawing of logs carried on in said building, the same became a necessary and permanent part of the

Immobilization of machinery; when placed in plant by owner Machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner. The distinction rests upon the fact that one only having a temporary right to the possession or enjoyment of property is not presumed by the law to have applied movable property belonging to him so as to

deprive him of it by causing it by an act of immobilization to become the property of another.

fact found therein. Thus, said machines are proper subjects of the Writ of Seizure

APPLICATION OF THE PRINCIPLE OF ESTOPPEL

Third parties acting in good faith not affected by stipulation to consider real property as personal The holding that the machines should be deemed personal property pursuant to the Lease Agreement is good only insofar as the contracting parties are concerned. Hence, while the parties are bound by the Agreement, third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. In the present case, however, there is no showing that any specific third party would be adversely affected.

Serg’s Products v. PCI Leasing

Machinery immovable properties by incorporation The machinery were essential and principal elements of their chocolate-making industry. Hence, although each of them was movable or personal property on its own, all of them have become "immobilized by destination because they are essential and principal elements in the industry." The machines are thus, real, not personal, property pursuant to Article 415 (5) of the Civil Code.

REAL PROPERTY UNDER NO. 10

Hongkong & Shanghai Banking v. Aldecoa & Co. Parties estopped when parties stipulated properties as personal; property thus subject to writ of seizure Contracting parties may validly stipulate that a real property be considered as personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material

Court has jurisdiction as bank does not seek to exercise mortgage right on real properties in the provinces The bank is not seeking to exercise its mortgage rights upon the mortgages which the defendant firm holds upon certain real properties in the Provinces of Albay and Ambos Camarines and to sell these properties at public auction in these proceedings; nor does the judgment of the trial court directs that this be done. Before that

property can be sold the original mortgagors will have to be made parties. The bank is not trying to foreclose any mortgages on real property executed by Aldecoa & Co.

Insofar as the pipeline uses valves, pumps and control devices to maintain the flow of oil, it is in a sense machinery within the meaning of the Real Property Tax Code.

CONCEPT OF REAL PROPERTY IN REAL PROPERTY TAXES

II. MOVABLE PROPERTY

Meralco vs CBAA

PERSONAL PROPERTY UNDER NO. ART. 416 (1): "NOT INCLUDED IN ART. 415."

Pipeline means a line of pipe connected to pumps, valves and control devices for conveying liquids, gases or finely divided solids. It is a line of pipe running upon or in the earth, carrying with it the right to the use of the soil in which it is placed. Article 415[l] and [3] provides that real property may consist of constructions of all kinds adhered to the soil and 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. The pipeline system in question is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline.

Involuntary insolvency of Paul Strochecker v. Ramirez

Interest in business may be subject of mortgage With regard to the nature of the property mortgaged which is one-half interest in the business, such interest is a personal property capable of appropriation and not included in the enumeration of real properties in articles 335 of the Civil Code, and may be the subject of mortgage. All personal property may be mortgaged. (Sec. 7, Act 1508.)

PERSONAL PROPERTY UNDER ART. 416 (2): "BY SPECIAL PROVISION OF LAW."

Sibal v. Valdez

Chattel Mortgage Law recognizes growing crops as personal property Act 1508, the Chattel Mortgage Law, fully recognizes that growing crops are personal property. Section 2 of said Act provides that "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 that "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 above provisions of Act 1508 were enacted on the assumption that "growing crops" are personal property.

PERSONAL PROPERTY UNDER ART. 416 (3): "FORCES OF NATURE."

US v. Carlos

While electrivity is not fluid, still its manifestations and effects like those of gas may be felt and seen. The true test of what may be stolen is not whether it is corporeal ro incorporeal, but whether, being poessed of value, a person other than the owner, may appropirate the same. Electrcity like gas, is a valuable merchandise, and may thus be stolen.

PERSONAL PROPERTY UNDER ART. 416 TRANSPORTED FROM PLACE TO PLACE."

(4):

"CAN

BE

Philippine Refining v. Jarque

Vessels are personal property under civil and common law Vessels are considered personal property under the civil law. (Code of Commerce, article 585.) Similarly under the common law, vessels are personal property. Under the common law, vessels are personal property although occasionally referred to as a peculiar kind of personal property.

PERSONAL PROPERTY UNDER ART. 417 (2): "SHARES OF STOCKS."

Chua Guan v. Samahang Magsasaka

A share of stock in a gold mining corporation is personal property; bu the gold mine itself, as well as any land of the corporation, is regarded as real

property by the law. The certificate itself evidencing the ownership of the share, as well as the share itself, is regarded as personal property. Being personal it can be subject of chattel mortgage.

III. PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS (ARTS. 419-426)

property belonging to public dominion. Article 502 adds "rivers and their natural beds;” “continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves;” “waters rising continuously or intermittently on lands of public dominion;” and “ lakes and lagoons formed by Nature on public lands and their beds;” to the enumeration.

Extent of a lake bed PUBLIC DOMINION AND PRIVATE OWNERSHIP

Republic v. CA

Classification of property as either of public dominion or of private ownership; Public lands / public dominion Property, which includes parcels of land found in Philippine territory, is either of public dominion or of private ownership. Public lands, or those of public dominion, have been described as those which, under existing legislation are not the subject of private ownership, and are reserved for public purposes. The New Civil Code enumerates properties of public dominion in Articles 420 and 502 thereof. Article 420 includes “those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; and “those which belong to the State without being for public use, and are intended for some public service or for the development of the national wealth" as

The extent of a lake bed is defined in Artcile 74 of the Law of Waters of 1866, as “the natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their highest ordinary depth." Highest Ordinary Depth in a lake; Determinant is rainfall and not gravitational pull (tides) The phrase "highest ordinary depth" has been interpreted in the case of Government. vs. Colegio de San Jose to be the highest depth of the waters of Laguna de Bay during the dry season, such depth being the "regular, common, natural, which occurs always or most of the time during the year; or thus rain "falling directly on or flowing into Laguna de Bay from different sources." While the waters of a lake are also subject to the same gravitational forces that cause the formation of tides in seas and oceans, this phenomenon is not a regular daily occurrence in the case of lakes. The alternation of high tides and low tides, which is an ordinary occurrence, could hardly account for the rise in the water level of the Laguna de Bay as observed 4-5 months a year during the rainy season; rather, it is the rains which bring about the inundation of a portion of the land in question. Since the rise in the

water level which causes the submersion of the land occurs during a shorter period than the level of the water at which the land is completely dry, the latter should be considered as the "highest ordinary depth" of Laguna de Bay. The land sought to be registered, therefore, is not part of the bed or basin of Laguna de Bay.

Foreshore land defined; Definition does not apply to land adjacent to lake Foreshore land is that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides; or the strip of land that lies between the high and low water marks and that is alternately wet and dry according to the flow of the tide. In the present case, since the inundation of a portion of the land near the lake is not due to “flux and reflux of tides,” it thus cannot be considered a foreshore land within the meaning cited by the Director of Lands.

Purpose of land registration under Torrens System The purpose of land registration under the Torrens System is not the acquisition of lands but only the registration of title which applicant already possesses over the land. Registration under the Torrens Law was never intended as a means of acquiring ownership. Applicant in this case asserts ownership over the parcel of land he seeks to register and traces the roots of his title to a public instrument of sale in favor of his father from whom he inherited said land.

Tax declaration strong evidence of ownership acquired by prescription; also Open, continuous, public, peaceful, exclusive and adverse possession of the land Applicant presents tax declarations covering the land since 1918 and also tax receipts dating back to 1948. While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of ownership, they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property. Further, applicant by himself and through his father before him, has been in open, continuous, public, peaceful, exclusive and adverse possession of the disputed land for more than 30 years, counted from 19 April 1909, when the land was acquired from a third person by purchase. Since applicant has possessed the subject parcel in the concept of owner with just title and in good faith, his possession need only last for ten years in order for ordinary acquisitive prescription to set in. Applicant has more than satisfied this legal requirement.

Judicial confirmation of imperfect title Even if the land sought to be registered is public land, applicant would be entitled to a judicial confirmation of his imperfect title, since he has also satisfied the requirements of the Public Land Act (CA 141 as amended by RA 1942). Section 48 of the Act enumerates as among the persons entitled to judicial confirmation of imperfect title, such as “those who, by themselves or through their predecessors-in-interest, have been in the open, continuous, exclusive, and notorious

possession and occupation of agricultural lands of the public domain, under bona fide claim of ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title."

CHARACTERISTICS OF PROPERTIES OF PUBLIC DOMINION.

Vda. De Tantoco v. Muncipal Council of Iloilo Reclamation requires proper permission; reclaimed land does not automatically belong to party reclaiming the same Private persons cannot, by themselves reclaim land from water bodies belonging to the public domain without proper permission from government authorities. And even if such reclamation had been authorized, the reclaimed land does not automatically belong to the party reclaiming the same as they may still be subject to the terms of the authority earlier granted. In the present case, private oppositorspetitioners failed to show proper authority for the alleged reclamation, therefore, their claimed title to the litigated parcel must fall.

Property of public domain applies to municipal property for public use; both not within the commerce of man The principle governing property of the public domain of the State is applicable to property for public use of the municipalities as said municipal property is similar in character. The principle is that the property for public use of the State is not within the commerce of man and, consequently, is unalienable and not subject to prescription. Likewise, property for public use of the municipality is not within the commerce of man so long as it is used by the public and, consequently, said property is also inalienable.

Tolerance of possession cannot ripen into ownership As the private oppositors-petitioners entered into possession of the land with the permission of, and as tenants of, the applicant del Rio; the fact that some of them at one time or another did not pay rent. Their use of the land and their non-payment of rents thereon were merely tolerated by applicant and these could not have affected the character of the latter's possession which has already ripened into ownership at the time of the filing of this application for registration. Only possession acquired and enjoyed in the concept of owner can serve as the root of a title acquired by prescription.

CONVERSION OF PROPERTY PATRIMONIAL PROPERTY.

OF

PUBLIC

DOMINION

TO

Cebu Oxygen & Acetylene v. Bercilles Street withdrawn from public use becomes patrimonial property; Subsequent sale valid When a portion of the city street was withdrawn from public use, such withdrawn portion becomes patrimonial property which can be the

object of an ordinary contract. As expressly provided by Article 422 of the Civil Code, "property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State." Further, the Revised Charter of the City of Cebu, in very clear and unequivocal terms, states that "property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be

lawfully used or conveyed." Thus, the withdrawal of the property in question from public use and its subsequent sale to the petitioner is valid.