PROPERTY- AUGUST 9, 2014

1. LEUNG YEE V STRONG MACHINERY CO., (37 PHIL 644)

2. PRUENTIAL !AN" VS PANIS (1#3 SCRA 390)
3. STANAR OIL VS $AMIRILLO (44 PHIL 630)
4. TOLEO-!ANAGA VS. CA, 302 SCRA 331
#. AVAO SA% MILL CO. VS. CASTILLO (61 SCRA 709)
6. !ER"EN"OTTER V. CU UN$IENG, 61 PHIL 663
7. MA"ATI LEASING AN &INANCE CORP. VS. %EAREVER
TE'TILE MILLS, 122 SCRA 296
(. !OAR O& ASSESSMENT APPEALS, ).C. VS. MERALCO, 10
SCRA 6(
9. MANILA ELECTRIC VS CENTRAL !AN"*!OAR O& ASSESSMENT
APPEALS, 114 SCRA 273
10. SI!AL V VALE+, #0 PHIL #12
11. US V CARLOS 21 PHIL #43
12. STROCHEC"ER V RAMIRE+ 44 PHIL 933
13. CITY O& !AGUIO VS. NINO, 4(7 SCRA 211
14. R.A. 7170- ORGAN ONATION ACT O& 1991
LEUNG YEE V STRONG MACHINERY CO., (37 PHIL 644)
G.R. No. L-11658 February 15, 1918
LEUNG YEE, plaintiff-appellant,
vs.
FRANK L. STRONG MAC!NERY COM"ANY a#$ %. G.
&!LL!AMSON, defendants-appellees.
Booram and Mahoney for appellant.
Williams, Ferrier and SyCip for appellees.
CARSON, J.'
The "Compaia Agricola Filipina" bought a considerable quantity of rice-
cleaning machinery company from the defendant machinery company, and
eecuted a chattel mortgage thereon to secure payment of the purchase
price. !t included in the mortgage deed the building of strong materials in
"hich the machinery "as installed, "ithout any reference to the land on
"hich it stood. The indebtedness secured by this instrument not having
been paid "hen it fell due, the mortgaged property "as sold by the sheriff,
in pursuance of the terms of the mortgage instrument, and "as bought in
by the machinery company. The mortgage "as registered in the chattel
mortgage registry, and the sale of the property to the machinery company
in satisfaction of the mortgage "as annotated in the same registry on
#ecember $%, &%&'.
A fe" "ee(s thereafter, on or about the &)th of *anuary, &%&), the
"Compaia Agricola Filipina" eecuted a deed of sale of the land upon
"hich the building stood to the machinery company, but this deed of sale,
although eecuted in a public document, "as not registered. This deed
ma(es no reference to the building erected on the land and "ould appear
to have been eecuted for the purpose of curing any defects "hich might
be found to eist in the machinery company+s title to the building under the
sheriff+s certificate of sale. The machinery company "ent into possession of
the building at or about the time "hen this sale too( place, that is to say,
the month of #ecember, &%&', and it has continued in possession ever
since.
At or about the time "hen the chattel mortgage "as eecuted in favor of
the machinery company, the mortgagor, the "Compaia Agricola Filipina"
eecuted another mortgage to the plaintiff upon the building, separate and
apart from the land on "hich it stood, to secure payment of the balance of
its indebtedness to the plaintiff under a contract for the construction of the
building. ,pon the failure of the mortgagor to pay the amount of the
indebtedness secured by the mortgage, the plaintiff secured -udgment for
that amount, levied eecution upon the building, bought it in at the sheriff+s
sale on or about the &.th of #ecember, &%&), and had the sheriff+s
certificate of the sale duly registered in the land registry of the /rovince of
Cavite.
At the time "hen the eecution "as levied upon the building, the defendant
machinery company, "hich "as in possession, filed "ith the sheriff a s"orn
statement setting up its claim of title and demanding the release of the
property from the levy. Thereafter, upon demand of the sheriff, the plaintiff
eecuted an indemnity bond in favor of the sheriff in the sum of /&$,000, in
reliance upon "hich the sheriff sold the property at public auction to the
plaintiff, "ho "as the highest bidder at the sheriff+s sale.
This action "as instituted by the plaintiff to recover possession of the
building from the machinery company.
The trial -udge, relying upon the terms of article &)1' of the Civil Code,
gave -udgment in favor of the machinery company, on the ground that the
company had its title to the building registered prior to the date of registry of
the plaintiff+s certificate.
Article &)1' of the Civil Code is as follo"s2
!f the same thing should have been sold to different vendees, the
o"nership shall be transfer to the person "ho may have the first
ta(en possession thereof in good faith, if it should be personal
property.
3hould it be real property, it shall belong to the person acquiring it
"ho first recorded it in the registry.
3hould there be no entry, the property shall belong to the person "ho
first too( possession of it in good faith, and, in the absence thereof, to
the person "ho presents the oldest title, provided there is good faith.
The registry her referred to is of course the registry of real property, and it
must be apparent that the annotation or inscription of a deed of sale of real
property in a chattel mortgage registry cannot be given the legal effect of
an inscription in the registry of real property. 4y its epress terms, the
Chattel 5ortgage 6a" contemplates and ma(es provision for mortgages of
personal property7 and the sole purpose and ob-ect of the chattel mortgage
registry is to provide for the registry of "Chattel mortgages," that is to say,
mortgages of personal property eecuted in the manner and form
prescribed in the statute. The building of strong materials in "hich the rice-
cleaning machinery "as installed by the "Compaia Agricola Filipina" "as
real property, and the mere fact that the parties seem to have dealt "ith it
separate and apart from the land on "hich it stood in no "ise changed its
character as real property. !t follo"s that neither the original registry in the
chattel mortgage of the building and the machinery installed therein, not the
annotation in that registry of the sale of the mortgaged property, had any
effect "hatever so far as the building "as concerned.
8e conclude that the ruling in favor of the machinery company cannot be
sustained on the ground assigned by the trial -udge. 8e are of opinion,
ho"ever, that the -udgment must be sustained on the ground that the
agreed statement of facts in the court belo" discloses that neither the
purchase of the building by the plaintiff nor his inscription of the sheriff+s
certificate of sale in his favor "as made in good faith, and that the
machinery company must be held to be the o"ner of the property under the
third paragraph of the above cited article of the code, it appearing that the
company first too( possession of the property7 and further, that the building
and the land "ere sold to the machinery company long prior to the date of
the sheriff+s sale to the plaintiff.
!t has been suggested that since the provisions of article &)1' of the Civil
Code require "good faith," in epress terms, in relation to "possession" and
"title," but contain no epress requirement as to "good faith" in relation to
the "inscription" of the property on the registry, it must be presumed that
good faith is not an essential requisite of registration in order that it may
have the effect contemplated in this article. 8e cannot agree "ith this
contention. !t could not have been the intention of the legislator to base the
preferential right secured under this article of the code upon an inscription
of title in bad faith. 3uch an interpretation placed upon the language of this
section "ould open "ide the door to fraud and collusion. The public records
cannot be converted into instruments of fraud and oppression by one "ho
secures an inscription therein in bad faith. The force and effect given by la"
to an inscription in a public record presupposes the good faith of him "ho
enters such inscription7 and rights created by statute, "hich are predicated
upon an inscription in a public registry, do not and cannot accrue under an
inscription "in bad faith," to the benefit of the person "ho thus ma(es the
inscription.
Construing the second paragraph of this article of the code, the supreme
court of 3pain held in its sentencia of the &'th of 5ay, &%0., that2
This rule is al"ays to be understood on the basis of the good faith
mentioned in the first paragraph7 therefore, it having been found that
the second purchasers "ho record their purchase had (no"ledge of
the previous sale, the question is to be decided in accordance "ith
the follo"ing paragraph. 9:ote $, art. &)1', Civ. Code, 5edina and
5aranon ;&%&&< edition.=
Although article &)1', in its second paragraph, provides that the title
of conveyance of o"nership of the real property that is first recorded
in the registry shall have preference, this provision must al"ays be
understood on the basis of the good faith mentioned in the first
paragraph7 the legislator could not have "ished to stri(e it out and to
sanction bad faith, -ust to comply "ith a mere formality "hich, in given
cases, does not obtain even in real disputes bet"een third persons.
9:ote $, art. &)1', Civ. Code, issued by the publishers of the La
Revista de los Tribunales, &'th edition.=
The agreed statement of facts clearly discloses that the plaintiff, "hen he
bought the building at the sheriff+s sale and inscribed his title in the land
registry, "as duly notified that the machinery company had bought the
building from plaintiff+s -udgment debtor7 that it had gone into possession
long prior to the sheriff+s sale7 and that it "as in possession at the time
"hen the sheriff eecuted his levy. The eecution of an indemnity bond by
the plaintiff in favor of the sheriff, after the machinery company had filed its
s"orn claim of o"nership, leaves no room for doubt in this regard. >aving
bought in the building at the sheriff+s sale "ith full (no"ledge that at the
time of the levy and sale the building had already been sold to the
machinery company by the -udgment debtor, the plaintiff cannot be said to
have been a purchaser in good faith7 and of course, the subsequent
inscription of the sheriff+s certificate of title must be held to have been
tainted "ith the same defect.
/erhaps "e should ma(e it clear that in holding that the inscription of the
sheriff+s certificate of sale to the plaintiff "as not made in good faith, "e
should not be understood as questioning, in any "ay, the good faith and
genuineness of the plaintiff+s claim against the "Compaia Agricola
Filipina." The truth is that both the plaintiff and the defendant company
appear to have had -ust and righteous claims against their common debtor.
:o criticism can properly be made of the eercise of the utmost diligence
by the plaintiff in asserting and eercising his right to recover the amount of
his claim from the estate of the common debtor. 8e are strongly inclined to
believe that in procuring the levy of eecution upon the factory building and
in buying it at the sheriff+s sale, he considered that he "as doing no more
than he had a right to do under all the circumstances, and it is highly
possible and even probable that he thought at that time that he "ould be
able to maintain his position in a contest "ith the machinery company.
There "as no collusion on his part "ith the common debtor, and no thought
of the perpetration of a fraud upon the rights of another, in the ordinary
sense of the "ord. >e may have hoped, and doubtless he did hope, that
the title of the machinery company "ould not stand the test of an action in a
court of la"7 and if later developments had confirmed his unfounded hopes,
no one could question the legality of the propriety of the course he adopted.
4ut it appearing that he had full (no"ledge of the machinery company+s
claim of o"nership "hen he eecuted the indemnity bond and bought in the
property at the sheriff+s sale, and it appearing further that the machinery
company+s claim of o"nership "as "ell founded, he cannot be said to have
been an innocent purchaser for value. >e too( the ris( and must stand by
the consequences7 and it is in this sense that "e find that he "as not a
purchaser in good faith.
?ne "ho purchases real estate "ith (no"ledge of a defect or lac( of title in
his vendor cannot claim that he has acquired title thereto in good faith as
against the true o"ner of the land or of an interest therein7 and the same
rule must be applied to one "ho has (no"ledge of facts "hich should have
put him upon such inquiry and investigation as might be necessary to
acquaint him "ith the defects in the title of his vendor. A purchaser cannot
close his eyes to facts "hich should put a reasonable man upon his guard,
and then claim that he acted in good faith under the belief that there "as no
defect in the title of the vendor. >is mere refusal to believe that such defect
eists, or his "illful closing of his eyes to the possibility of the eistence of a
defect in his vendor+s title, "ill not ma(e him an innocent purchaser for
value, if after"ards develops that the title "as in fact defective, and it
appears that he had such notice of the defects as "ould have led to its
discovery had he acted "ith that measure of precaution "hich may
reasonably be acquired of a prudent man in a li(e situation. @ood faith, or
lac( of it, is in its analysis a question of intention7 but in ascertaining the
intention by "hich one is actuated on a given occasion, "e are necessarily
controlled by the evidence as to the conduct and out"ard acts by "hich
alone the in"ard motive may, "ith safety, be determined. 3o it is that "the
honesty of intention," "the honest la"ful intent," "hich constitutes good faith
implies a "freedom from (no"ledge and circumstances "hich ought to put a
person on inquiry," and so it is that proof of such (no"ledge overcomes the
presumption of good faith in "hich the courts al"ays indulge in the
absence of proof to the contrary. "@ood faith, or the "ant of it, is not a
visible, tangible fact that can be seen or touched, but rather a state or
condition of mind "hich can only be -udged of by actual or fancied to(ens
or signs." 98ilder vs. @ilman, AA Bt., A0), A0A7 Cf. Cardenas 6umber
Co.vs. 3hadel, A$ 6a. Ann., $0%)-$0%.7 /in(erton 4ros. Co. vs. 4romley,
&&% 5ich., ., &0, &1.=
8e conclude that upon the grounds herein set forth the disposing part of
the decision and -udgment entered in the court belo" should be affirmed
"ith costs of this instance against the appellant. 3o ordered.
PRUENTIAL !AN" VS PANIS (1#3 SCRA 390)
G.R. No. L-5(((8 Au)u*+ ,1, 198-
"RU.ENT!AL /ANK, petitioner,
vs.
ONORA/LE .OM!NGO .. "AN!S, "re*0$0#) %u$)e o1 /ra#23 !!!,
Cour+ o1 F0r*+ !#*+a#2e o1 4a5ba6e* a#$ O6o#)a7o C0+y8 FERNAN.O
MAGCALE 9 TEO.ULA /ALUYUT-MAGCALE, respondents.

"ARAS, J.:
This is a petition for revie" on certiorari of the :ovember &', &%1.
#ecision : of the then Court of First !nstance of Cambales and ?longapo
City in Civil Case :o. $))'-0 entitled "3pouses Fernando A. 5agcale and
Teodula 4aluyut-5agcale vs. >on. Damon E. /ardo and /rudential 4an("
declaring that the deeds of real estate mortgage eecuted by respondent
spouses in favor of petitioner ban( are null and void.
The undisputed facts of this case by stipulation of the parties are as
follo"s2
... on :ovember &%, &%1&, plaintiffs-spouses Fernando A.
5agcale and Teodula 4aluyut 5agcale secured a loan in the
sum of /10,000.00 from the defendant /rudential 4an(. To
secure payment of this loan, plaintiffs eecuted in favor of
defendant on the aforesaid date a deed of Deal Fstate
5ortgage over the follo"ing described properties2
l. A $-3T?DFE, 3F5!-C?:CDFTF, residential building "ith
"arehouse spaces containing a total floor area of $G' sq.
meters, more or less, generally constructed of mied hard "ood
and concrete materials, under a roofing of cor. g. i. sheets7
declared and assessed in the name of FFD:A:#? 5A@CA6F
under Ta #eclaration :o. $&&0%, issued by the Assessor of
?longapo City "ith an assessed value of /'A,$%0.00. This
building is the only improvement of the lot.
$. T>F /D?/FDTE hereby conveyed by "ay of 5?DT@A@F
includes the right of occupancy on the lot "here the above
property is erected, and more particularly described and
bounded, as follo"s2
A first class residential land !dentffied as 6ot :o.
1$0, 9Ts-'0., ?longapo To"nsite 3ubdivision=
Ardoin 3treet, Fast 4a-ac-4a-ac, ?longapo City,
containing an area of )GA sq. m. more or less,
declared and assessed in the name of FFD:A:#?
5A@CA6F under Ta #uration :o. &%A%A issued by
the Assessor of ?longapo City "ith an assessed
value of /&,.G0.007 bounded on the
:?DT>2 4y :o. G, Ardoin
3treet
3?,T>2 4y :o. $, Ardoin
3treet
FA3T2 4y '1 Canda 3treet,
and
8F3T2 4y Ardoin 3treet.
All corners of the lot mar(ed by conc.
cylindrical monuments of the 4ureau of
6ands as visible limits. 9 Fhibit "A, "
also Fhibit "&" for defendant=.
Apart from the stipulations in the printed portion of
the aforestated deed of mortgage, there appears a
rider typed at the bottom of the reverse side of the
document under the lists of the properties
mortgaged "hich reads, as follo"s2
A:# !T !3 F,DT>FD A@DFF# that in
the event the 3ales /atent on the lot
applied for by the 5ortgagors as herein
stated is released or issued by the
4ureau of 6ands, the 5ortgagors hereby
authoriHe the Degister of #eeds to hold
the Degistration of same until this
5ortgage is cancelled, or to annotate
this encumbrance on the Title upon
authority from the 3ecretary of
Agriculture and :atural Desources,
"hich title "ith annotation, shall be
released in favor of the herein
5ortgage.
From the aforequoted stipulation, it is obvious that
the mortgagee 9defendant /rudential 4an(= "as at
the outset a"are of the fact that the mortgagors
9plaintiffs= have already filed a 5iscellaneous 3ales
Application over the lot, possessory rights over
"hich, "ere mortgaged to it.
Fhibit "A" 9Deal Fstate 5ortgage= "as registered
under the /rovisions of Act '')) "ith the Degistry
of #eeds of Cambales on :ovember $', &%1&.
?n 5ay $, &%1', plaintiffs secured an additional
loan from defendant /rudential 4an( in the sum of
/$0,000.00. To secure payment of this additional
loan, plaintiffs eecuted in favor of the said
defendant another deed of Deal Fstate 5ortgage
over the same properties previously mortgaged in
Fhibit "A." 9Fhibit "47" also Fhibit "$" for
defendant=. This second deed of Deal Fstate
5ortgage "as li(e"ise registered "ith the Degistry
of #eeds, this time in ?longapo City, on 5ay
$,&%1'.
?n April $), &%1', the 3ecretary of Agriculture issued
5iscellaneous 3ales /atent :o. )11G over the parcel of land,
possessory rights over "hich "ere mortgaged to defendant
/rudential 4an(, in favor of plaintiffs. ?n the basis of the
aforesaid /atent, and upon its transcription in the Degistration
4oo( of the /rovince of Cambales, ?riginal Certificate of Title
:o. /-$AA) "as issued in the name of /laintiff Fernando
5agcale, by the F-?ficio Degister of #eeds of Cambales, on
5ay &A, &%1$.
For failure of plaintiffs to pay their obligation to defendant 4an(
after it became due, and upon application of said defendant, the
deeds of Deal Fstate 5ortgage 9Fhibits "A" and "4"= "ere
etra-udicially foreclosed. Consequent to the foreclosure "as
the sale of the properties therein mortgaged to defendant as the
highest bidder in a public auction sale conducted by the
defendant City 3heriff on April &$, &%1. 9Fhibit "F"=. The
auction sale aforesaid "as held despite "ritten request from
plaintiffs through counsel dated 5arch $%, &%1., for the
defendant City 3heriff to desist from going "ith the scheduled
public auction sale 9Fhibit "#"=." 9#ecision, Civil Case :o.
$))'-0, Dollo, pp. $%-'&=.
Despondent Court, in a #ecision dated :ovember ', &%1. declared the
deeds of Deal Fstate 5ortgage as null and void 9Ibid., p. 'A=.
?n #ecember &), &%1., petitioner filed a 5otion for Deconsideration 9Ibid.,
pp. )&-A'=, opposed by private respondents on *anuary A, &%1% 9Ibid., pp.
A)-G$=, and in an ?rder dated *anuary &0, &%1% 9Ibid., p. G'=, the 5otion
for Deconsideration "as denied for lac( of merit. >ence, the instant petition
9Ibid., pp. A-$.=.
The first #ivision of this Court, in a Desolution dated 5arch %, &%1%,
resolved to require the respondents to comment 9Ibid., p. GA=, "hich order
"as complied "ith the Desolution dated 5ay &.,&%1%, 9Ibid., p. &00=,
petitioner filed its Deply on *une $,&%1% 9Ibid., pp. &0&-&&$=.
Thereafter, in the Desolution dated *une &', &%1%, the petition "as given
due course and the parties "ere required to submit simultaneously their
respective memoranda. 9Ibid., p. &&)=.
?n *uly &., &%1%, petitioner filed its 5emorandum 9Ibid., pp. &&G-&))=,
"hile private respondents filed their 5emorandum on August &, &%1% 9Ibid.,
pp. &)G-&AA=.
!n a Desolution dated August &0, &%1%, this case "as considered submitted
for decision 9Ibid., /. &A.=.
!n its 5emorandum, petitioner raised the follo"ing issues2
&. 8>FT>FD ?D :?T T>F #FF#3 ?F DFA6 F3TATF 5?DT@A@F ADF
BA6!#7 A:#
$. 8>FT>FD ?D :?T T>F 3,/FDBF:!:@ !33,A:CF !: FAB?D ?F
/D!BATF DF3/?:#F:T3 ?F 5!3CF66A:F?,3 3A6F3 /ATF:T :?.
)11G ?: A/D!6 $), &%1$ ,:#FD ACT :?. 1'0 A:# T>F C?BFD!:@
?D!@!:A6 CFDT!F!CATF ?F T!T6F :?. /-$AA) ?: 5AE &A,&%1$ >ABF
T>F FFFFCT ?F !:BA6!#AT!:@ T>F #FF#3 ?F DFA6 F3TATF
5?DT@A@F. 95emorandum for /etitioner, Dollo, p. &$$=.
This petition is impressed "ith merit.
The pivotal issue in this case is "hether or not a valid real estate mortgage
can be constituted on the building erected on the land belonging to another.
The ans"er is in the affirmative.
!n the enumeration of properties under Article )&A of the Civil Code of the
/hilippines, this Court ruled that, "it is obvious that the inclusion of
"building" separate and distinct from the land, in said provision of la" can
only mean that a building is by itself an immovable property." 96opeH vs.
?rosa, *r., et al., 6-&0.&1-&., Feb. $., &%A.7 Associated !nc. and 3urety
Co., !nc. vs. !ya, et al., 6-&0.'1-'., 5ay '0,&%A.=.
Thus, "hile it is true that a mortgage of land necessarily includes, in the
absence of stipulation of the improvements thereon, buildings, still a
building by itself may be mortgaged apart from the land on "hich it has
been built. 3uch a mortgage "ould be still a real estate mortgage for the
building "ould still be considered immovable property even if dealt "ith
separately and apart from the land 96eung Eee vs. 3trong 5achinery Co.,
'1 /hil. G))=. !n the same manner, this Court has also established that
possessory rights over said properties before title is vested on the grantee,
may be validly transferred or conveyed as in a deed of mortgage 9Bda. de
4autista vs. 5arcos, ' 3CDA )'. ;&%G&<=.
Coming bac( to the case at bar, the records sho", as aforestated that the
original mortgage deed on the $-storey semi-concrete residential building
"ith "arehouse and on the right of occupancy on the lot "here the building
"as erected, "as eecuted on :ovember &%, &%1& and registered under
the provisions of Act '')) "ith the Degister of #eeds of Cambales on
:ovember $', &%1&. 5iscellaneous 3ales /atent :o. )11G on the land "as
issued on April $), &%1$, on the basis of "hich ?CT :o. $AA) "as issued
in the name of private respondent Fernando 5agcale on 5ay &A, &%1$. !t is
therefore "ithout question that the original mortgage "as eecuted before
the issuance of the final patent and before the government "as divested of
its title to the land, an event "hich ta(es effect only on the issuance of the
sales patent and its subsequent registration in the ?ffice of the Degister of
#eeds 9Bisayan Dealty !nc. vs. 5eer, %G /hil. A&A7 #irector of 6ands vs. #e
6eon, &&0 /hil. $.7 #irector of 6ands vs. *urado, 6-&)10$, 5ay $', &%G&7
/ena "6a" on :atural Desources", p. )%=. ,nder the foregoing
considerations, it is evident that the mortgage eecuted by private
respondent on his o"n building "hich "as erected on the land belonging to
the government is to all intents and purposes a valid mortgage.
As to restrictions epressly mentioned on the face of respondents+ ?CT :o.
/-$AA), it "ill be noted that 3ections &$&, &$$ and &$) of the /ublic 6and
Act, refer to land already acquired under the /ublic 6and Act, or any
improvement thereon and therefore have no application to the assailed
mortgage in the case at bar "hich "as eecuted before such eventuality.
6i(e"ise, 3ection $ of Depublic Act :o. 1'0, also a restriction appearing on
the face of private respondent+s title has li(e"ise no application in the
instant case, despite its reference to encumbrance or alienation before the
patent is issued because it refers specifically to encumbrance or alienation
on the land itself and does not mention anything regarding the
improvements eisting thereon.
4ut it is a different matter, as regards the second mortgage eecuted over
the same properties on 5ay $, &%1' for an additional loan of /$0,000.00
"hich "as registered "ith the Degistry of #eeds of ?longapo City on the
same date. Delative thereto, it is evident that such mortgage eecuted after
the issuance of the sales patent and of the ?riginal Certificate of Title, falls
squarely under the prohibitions stated in 3ections &$&, &$$ and &$) of the
/ublic 6and Act and 3ection $ of Depublic Act 1'0, and is therefore null
and void.
/etitioner points out that private respondents, after physically possessing
the title for five years, voluntarily surrendered the same to the ban( in &%11
in order that the mortgaged may be annotated, "ithout requiring the ban(
to get the prior approval of the 5inistry of :atural Desources beforehand,
thereby implicitly authoriHing /rudential 4an( to cause the annotation of
said mortgage on their title.
>o"ever, the Court, in recently ruling on violations of 3ection &$) "hich
refers to 3ections &&., &$0, &$$ and &$' of Common"ealth Act &)&, has
held2
... :onetheless, "e apply our earlier rulings because "e believe
that as in pari delito may not be invo(ed to defeat the policy of
the 3tate neither may the doctrine of estoppel give a validating
effect to a void contract. !ndeed, it is generally considered that
as bet"een parties to a contract, validity cannot be given to it
by estoppel if it is prohibited by la" or is against public policy
9&% Am. *ur. .0$=. !t is not "ithin the competence of any citiHen
to barter a"ay "hat public policy by la" "as to preserve
9@onHalo /uyat I 3ons, !nc. vs. #e los Amas and
Alino supra=. ... 9Arsenal vs. !AC, &)' 3CDA A) ;&%.G<=.
This pronouncement covers only the previous transaction already alluded
to and does not pass upon any ne" contract bet"een the parties 9Ibid=, as
in the case at bar. !t should not preclude ne" contracts that may be entered
into bet"een petitioner ban( and private respondents that are in
accordance "ith the requirements of the la". After all, private respondents
themselves declare that they are not denying the legitimacy of their debts
and appear to be open to ne" negotiations under the la" 9Comment7 Dollo,
pp. %A-%G=. Any ne" transaction, ho"ever, "ould be sub-ect to "hatever
steps the @overnment may ta(e for the reversion of the land in its favor.
/DF5!3F3 C?:3!#FDF#, the decision of the Court of First !nstance of
Cambales I ?longapo City is hereby 5?#!F!F#, declaring that the #eed
of Deal Fstate 5ortgage for /10,000.00 is valid but ruling that the #eed of
Deal Fstate 5ortgage for an additional loan of /$0,000.00 is null and void,
"ithout pre-udice to any appropriate action the @overnment may ta(e
against private respondents.
3? ?D#FDF#.
3TA:#AD# ?!6 B3 *ADA5!66? 9)) / G'0=
G.R. No. L-;(,;9 Mar23 16, 19;,
TE STAN.AR. O!L COM"ANY OF NE& YORK, petitioner,
vs.
%OA<U!N %ARAM!LLO, a* re)0*+er o1 $ee$* o1 +3e C0+y o1
Ma#06a, respondent.
Ross, La!rene and Selph for petitioner.
City Fisal Revilla and "ssistant City Fisal Rodas for respondent.
STREET, J.:
This cause is before us upon demurrer interposed by the respondent,
*oaquin *aramillo, register of deeds of the City of 5anila, to an original
petition of the 3tandard ?il Company of :e" Eor(, see(ing a
peremptorymandamus to compel the respondent to record in the proper
register a document purporting to be a chattel mortgage eecuted in the
City of 5anila by @ervasia de la Dosa, Bda. de Bera, in favor of the
3tandard ?il Company of :e" Eor(.
!t appears from the petition that on :ovember $1, &%$$, @ervasia de la
Dosa, Bda. de Bera, "as the lessee of a parcel of land situated in the City
of 5anila and o"ner of the house of strong materials built thereon, upon
"hich date she eecuted a document in the form of a chattel mortgage,
purporting to convey to the petitioner by "ay of mortgage both the
leasehold interest in said lot and the building "hich stands thereon.
The clauses in said document describing the property intended to be thus
mortgage are epressed in the follo"ing "ords2
:o", therefore, the mortgagor hereby conveys and transfer to the
mortgage, by "ay of mortgage, the follo"ing described personal
property, situated in the City of 5anila, and no" in possession of the
mortgagor, to "it2
9&= All of the right, title, and interest of the mortgagor in and to the
contract of lease hereinabove referred to, and in and to the premises
the sub-ect of the said lease7
9$= The building, property of the mortgagor, situated on the aforesaid
leased premises.
After said document had been duly ac(no"ledge and delivered, the
petitioner caused the same to be presented to the respondent, *oaquin
*aramillo, as register of deeds of the City of 5anila, for the purpose of
having the same recorded in the boo( of record of chattel mortgages. ,pon
eamination of the instrument, the respondent "as of the opinion that it
"as not a chattel mortgage, for the reason that the interest therein
mortgaged did not appear to be personal property, "ithin the meaning of
the Chattel 5ortgage 6a", and registration "as refused on this ground
only.
8e are of the opinion that the position ta(en by the respondent is
untenable7 and it is his duty to accept the proper fee and place the
instrument on record. The duties of a register of deeds in respect to the
registration of chattel mortgage are of a purely ministerial character7 and no
provision of la" can be cited "hich confers upon him any -udicial or quasi-
-udicial po"er to determine the nature of any document of "hich
registration is sought as a chattel mortgage.
The original provisions touching this matter are contained in section &A of
the Chattel 5ortgage 6a" 9Act :o. &A0.=, as amended by Act :o. $)%G7
but these have been transferred to section &%. of the Administrative Code,
"here they are no" found. There is nothing in any of these provisions
conferring upon the register of deeds any authority "hatever in respect to
the "qualification," as the term is used in 3panish la", of chattel mortgage.
>is 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 eistence of the contract, and the
legal effects of the contract must be discovered in the instrument itself in
relation "ith the fact of notice. Degistration adds nothing to the instrument,
considered as a source of title, and affects nobody+s rights ecept as a
specifies of notice.
Articles '') and ''A of the Civil Code supply no absolute criterion for
discriminating bet"een real property and personal property for purpose of
the application of the Chattel 5ortgage 6a". Those articles state rules
"hich, considered as a general doctrine, are la" in this -urisdiction7 but it
must not be forgotten that under given conditions property may have
character different from that imputed to it in said articles. !t is undeniable
that the parties to a contract may by agreement treat as personal property
that "hich by nature "ould be real property7 and it is a familiar
phenomenon to see things classed as real property for purposes of taation
"hich on general principle might be considered personal property. ?ther
situations are constantly arising, and from time to time are presented to this
court, in "hich the proper classification of one thing or another as real or
personal property may be said to be doubtful.
The point submitted to us in this case "as determined on 3eptember .,
&%&), in an administrative ruling promulgated by the >onorable *ames A.
?strand, no" a *ustice of this Court, but acting at that time in the capacity
of *udge of the fourth branch of the Court of First !nstance of the :inth
*udicial #istrict, in the City of 5anila7 and little of value can be here added
to the observations contained in said ruling. 8e accordingly quote
therefrom as follo"s2
!t is unnecessary here to determine "hether or not the property
described in the document in question is real or personal7 the
discussion may be confined to the point as to "hether a register of
deeds has authority to deny the registration of a document purporting
to be a chattel mortgage and eecuted in the manner and form
prescribed by the Chattel 5ortgage 6a".
Then, after quoting section A of the Chattel 5ortgage 6a" 9Act :o. &A0.=,
his >onor continued2
4ased principally upon the provisions of section quoted the Attorney-
@eneral of the /hilippine !slands, in an opinion dated August &&,
&%0%, held that a register of deeds has no authority to pass upon the
capacity of the parties to a chattel mortgage "hich is presented to
him for record. " fortiori a register of deeds can have no authority to
pass upon the character of the property sought to be encumbered by
a chattel mortgage. ?f course, if the mortgaged property is real
instead of personal the chattel mortgage "ould no doubt be held
ineffective as against third parties, but this is a question to be
determined by the courts of -ustice and not by the register of deeds.
!n Leun# $ee vs. Fran% L. Stron# Mahinery Co. and Williamson 9'1 /hil.,
G))=, this court held that "here the interest conveyed is of the nature of
real, property, the placing of the document on record in the chattel
mortgage register is a futile act7 but that decision is not decisive of the
question no" before us, "hich has reference to the function of the register
of deeds in placing the document on record.
!n the light of "hat has been said it becomes unnecessary for us to pass
upon the point "hether the interests conveyed in the instrument no" in
question are real or personal7 and "e declare it to be the duty of the
register of deeds to accept the estimate placed upon the document by the
petitioner and to register it, upon payment of the proper fee.
The demurrer is overruled7 and unless "ithin the period of five days from
the date of the notification hereof, the respondent shall interpose a
sufficient ans"er to the petition, the "rit of mandamus "ill be issued, as
prayed, but "ithout costs. 3o ordered.
TOLE.O-/ANAGA =S CA >,(; SCRA ,,1?
G.R. No. 1;-9@1 %a#uary ;8, 1999
/!/L!A TOLE.O-/ANAGA a#$ %O=!TA TAN, petitioners,
vs.
COURT OF A""EALS a#$ CAN.ELAR!O .AMALER!O, respondents.

MART!NE4, J.:
The Court of Appeals 9CA=, in a decision penned by then -ustice Dichard
Francisco,
1
categorically declared private respondent as the absolute
o"ner of the land sub-ect of this case. That decision "as affirmed by this
Court, became final and eecutory and "as remanded to the lo"er court for
eecution. 4ut the Degister of #eeds frustrated private respondent+s
-udicially determined right as it refused to issue Certificates of Title in his
name on the ground that the matter should be referred "en onsulta" to the
Degister of #eeds before petitioner+s title can be canceled and a ne" one
issued in the name of the "inning party J herein private respondent. 3o,
for the third time, this simple redemption case "hich commenced in the
&%.0+s is again before this Court.
>ere is a summary of the facts, over "hich there is no dispute2
!n an action for redemption filed by petitioner 4anaga, the trial court
declared that she had lost her right to redeem her property earlier
foreclosed and "hich "as subsequently sold at public auction to private
respondent
;
Certificates of Title covering the said property "ere issued to
private respondent over "hich petitioner 4anaga annotated on 5arch ',
&%.' a notice of lis pendens.
,
?n appeal by petitioner 4anaga, the CA
reversed the decision of the trial court and allo"ed the former to redeem
the property "ithin a certain period.
@
/rivate respondent+s petition to this
Court "as dismissed
5
and the decision became final.
?n *une &&, &%%$ petitioner 4anaga tried to redeem the property by
depositing "ith the trial court the amount of redemption "hich "as financed
by her co-petitioner Tan. /rivate respondent opposed the redemption
arguing that it "as made beyond the time given to her by the court in the
earlier case >o"ever, the lo"er court issued an order on August 1, &%%$
upholding the redemption and ordered the Degister of #eeds to cancel
private respondent+s Certificates of Title and issue ne" titles in the name of
petitioner 4anaga
6
8hen his motion for reconsideration "as denied by the
trial court in an order dated *anuary ), &%%', private respondent filed a
petition forertiorari "ith the CA "hich "as doc(eted as CA-@.D. :o.
$%.G%. ?n *anuary &&, &%%', private respondent caused the annotation of
said petition as another notice of lis pendens on the Certificates of Title.
Three days later, the CA issued a temporary restraining order to en-oin the
eecution of the August 1, &%%$ and *anuary ), &%%' orders.
5ean"hile, on *anuary 1, &%%', petitioner 4anaga sold the sub-ect
property to petitioner Tan "ith the deed of absolute sale mentioning private
respondent+s certificate of title "hich "as not yet cancelled.
:ot"ithstanding the notice of lis pendens, petitioner Tan subdivided the
property in question under a subdivision plan, "hich she made not in her
name but in the name of private respondent. There being no preliminary
in-unction issue and "ith the epiration of the TD?, petitioner Tan as(ed the
Degister of #eeds to issue ne" titles in her name. ?n 5arch $), &%%',
such titles "ere issued in petitioner Tan+s name but it still carried the
annotations of the t"o notices of lis pendens. ,pon learning of the ne" title
of petitioner Tan, private respondent impleaded the former in his petition in
CA-@.D. :o. $%.G%.
?n ?ctober $., &%%', the CA set aside the August 1, &%%$ and *anuary ),
&%%' orders of the trial court and declared private respondent absolute
o"ner of the sub-ect property the CA disposed of the petition as follo"s2
8>FDFF?DF, in vie" of the foregoing considerations, the
instant petition is hereby @DA:TF#. The order issued by public
respondent -udge dated August 1, &%%$ and *anuary ), &%%'
are hereby order 3FT A3!#F and a ne" one is hereby entered
declaring petitioner as the absolute o"ner of the parcels of land
sub-ect of redemption for failure of private respondent to
eercise the right of redemption "ithin the thirty 9'0= days
period previously granted her by this court.
-
That decision became final and eecutory after petitioner 4anaga+s petition
for revie" "as dismissed by this Court for lac( of merit.
8
,pon motion of
private respondent, the trial court issued a "rit of eecution on #ecember
$1, &%%) ordering the Degister of #eeds to reinstate the Certificates of Title
in the name of the movant J herein private respondent. !n its order "hich
petitioners did not contest, the court a &uo said that2
Although there is no specific pronouncement in the decision of
the Court of Appeals that reverts the titles to the land sub-ects
of redemption to the defendant, the fact that it declared the
petioner 9#amalerio= as the absolute o"ner of the lands entitles
him to "rit of eecution issuing from this court directing the
Degister of #eeds to reinstate his titles to his name. As it is
implied from the decision declaring him the absolute o"ner of
the land be reverted to him 9See ,y v. Capulong, $$&, 3CDA
.1=.
6et therefore a "rit of eecution issue in this case to enforce
the decision of the Court of Appeals. !n this connection, the
Degister of #eeds of the Degistry of #eeds for @eneral 3antos
City is hereby ordered to reinstate the title of Candelario 4.
#amalerio J Transfer Certificates of Title :o. T-&%A10 and T-
&%A1&, both of the Degistry of #eeds from @eneral 3antos
City.
9
4ut the Degister of #eeds refused to comply "ith the "rit of eecution
alleging that the Certificates of Title issued to petitioner Tan must first be
surrendered. Accordingly, private respondent moved to cite the Degister of
#eeds in contempt of court "hich "as denied, as the trial court ruled on
*anuary &&, &%%A that the former+s remedy is by onsulta to the
Commissioner of 6and Degistration.
1(
!n another order 9dated 5arch $%,
&%%G= the trial court li(e"ise denied private respondent+s motion for the
issuance of a "rit of possession ruling that the latter+s remedy is a separate
action to declare petitioner Tan+s Certificates of Title void. Aggrieved,
private respondent again elevated the case to the CA via a petition
for ertiorari and mandamus
11
assailing the above-mentioned t"o orders of
the court a &uo naming as respondents the trial court -udge, the Degister of
#eeds and the petitioners. ?n :ovember 1, &%%G, the CA rendered a
decision granting the petition and, among others, set aside the assailed
orders of the trial court. The dispositive portion of the CA decision reads2
8>FDFF?DF, in vie" of all the foregoing considerations, the
petition is @DA:TF#. *udgment is hereby rendered2
&. setting aside the orders of the respondent -udge dated *anuary
&&, &%%A and 5arch $%, &%%G7
$. declaring the title issued to 4iblia Toledo-4anaga, *ovita Tan
and to those other subsequent transferee or transferees, if any,
as null and void7
'. ordering the Degister of #eeds of @eneral 3antos City to issue
a ne" certificates of title to Candelario #amalerio over the
parcels of land in question7
). ordering the respondent court to issue "rit of eecution for the
enforcement of this decision and of the decision in CA-@.D. 3/
:o. $%.G. 9si=, as "ell as "rit of possession for the delivery to
petitioner #amalerio of the /hysical possession of the parcels
of land sub-ect matter of this case.
3? ?D#FDF#.
1;
,pon denial by the CA of their motion for reconsideration, petitioners filed
the instant petition for ertiorari andmandamus. The Court, ho"ever, is
puHHled "hy petitioners, in their petition, "ould see( to set aside the t"o
orders 9*anuary ), &%%A and 5arch $%, &%%G= of "respondent -udge" "ho
"as not named in their petition.
1,
Assuming this be a mere lapsus since
they also confusingly refer to 4anaga and Tan as "private respondent" and
to #amalerio as "petitioner",
1@
the petition is still utterly "ithout merit. !t is
petitioners+ stand 9&= that petitioner Tan is a buyer in god faith and 9$= that
the remedy of private respondent to secure the titles in his name is
by onsulta to the 6and Degistration Commissioner and not through
contempt.
The Court is not convinced of the arguments proffered by petitioners.
4y arguing that petitioner Tan "as a buyer in good faith, petitioners in effect
raise once more the issue of o"nership of the sub-ect property. 4ut such
issue had already been clearly and categorically ruled upon by the CA and
affirmed by this Court, "herein private respondent "as ad-udged the
rightful and absolute o"ner thereof. The decision in that case bars a further
repeated consideration of the very same issue that has already been
settled "ith finality. To once again re-open that issue through a different
avenue "ould defeat the eistence of our courts as final arbiters of legal
controversies. >aving attained finality, the decision is beyond revie" or
modification even by this Court.
15
,nder the principle of res 'udiata, the Court and the parties, are bound by
such final decision, other"ise, there "ill be no end to litigation. !t is to the
interest of the public that there should be an end to litigation by the parties
over a sub-ect fully and fairly ad-udicated, and an individual should not be
veed t"ice for the same cause.
16
All the elements of res 'udiata are
present in this case, "hich are2
a. the former -udgment must be final7
b. the court "hich rendered -udgment had -urisdiction over the
parties and the sub-ect matter7
c. it must be a -udgment on the merits7
d. and there must be bet"een the first and second actions identity
of parties, sub-ect matter, and cause of action.
1-
The -udgment in the redemption suit had long become final and eecutory7
there is no question that the court had -urisdiction over the parties and the
sub-ect matter7 it involves an ad-udication on the merits of the case as the
court discussed and passed upon petitioner 4anaga+s right of redemption
"hich she did not timely eercise and as a consequence, lost her claim of
o"nership of the lot. 4oth petitioners and private respondent are parties to
the earlier cases, disputing the same parcel of land "ith both opposing
parties claiming o"nership thereof. Certainly, res 'udiata had set in.
4esides, once -udgment had become final and eecutory, it can no longer
distributed no matter ho" erroneous it may be. !n any case, no such error
"as attributed to in this case.
Contrary to petitioners+ argument, private respondent+s remedy is not a
direct or independent civil action for cancellation of petitioner Tan+s titles.
The facts, circumstances, evidence and arguments invo(ed in this derailed
final and eecutory decision are the very same matters that "ill be
established assuming such independent suit is legally "arranted. !t does
not matter "hether the former case "as a redemption suit and the ne" one
"ill be for cancellation of title because the test of identity of causes of
action is not in its form but "hether the same evidence "ould support and
establish the former and present causes of action.
18
/etitioners other contention that the eecution of the final and eecutory
decision J "hich is to issue titles in the name of private respondent J
cannot be compelled by mandamus because of the "formality" that the
registered o"ner first surrenders her duplicate Certificates of Title for
cancellation per 3ection .0 of /residential #ecree &A$%
19
cited by the
Degister of #eeds,
;(
bears no merit. !n effect, they argue that the "inning
party must "ait eecution until the losing party has complied "ith the
formality of surrender of the duplicate title. 3uch preposterous contention
borders on the absurd and has no place in our legal system. /recisely, the
3upreme Court had already affirmed the CA+s -udgment that Certificates of
Title be issued in private respondent+s name. To file another action -ust to
compel the registered o"ner, herein petitioner Tan, to surrender her titles
constitute violation of, if not disrespect to, the orders of the highest tribunal.
?ther"ise, if eecution cannot be had -ust because the losing party "ill not
surrender her titles, the entire proceeding in the courts, not to say the
efforts, epenses and time of the parties, "ould be rendered nugatory. !t is
revolting to conscience to allo" petitioners to further avert the satisfaction
of their obligation because of sheer literal adherence to technicality,
;1
or
formality of surrender of the duplicate titles. The surrender of the duplicate
is implied from the eecutory decision since petitioners themselves "ere
parties thereto. 4esides, as part of the eecution process, it is a ministerial
function of the Degister of #eeds to comply "ith the decision of the court to
issue a title and register a property in the name of a certain person,
especially "hen the decision had attained finality, as in this case.
!n addition, the enforcement of final and eecutory -udgment is li(e"ise a
ministerial function of the courts
;;
and does not call for the eercise of
discretion. 4eing a ministerial duty, a "rit of mandamus lies to compel its
performance.
;,
5oreover, it is aiomatic that "here a decision on the merits
is rendered and the same has become final and eecutory, as in this case,
the action on procedural matters or issues becomes moot and
academic.
;@
Thus, the so-called onsulta to the Commissioner of 6and
Degistration, "hich is not applicable herein, "as only a naive and belated
effort resorted to by petitioners in order to delay eecution. !f petitioners
desire to stop the enforcement of a final and eecutory decision, they
should have secured the issuance of a "rit of preliminary in-unction,
;5
but
"hich they did not avail (no"ing that there eists no legal or even equitable
-ustifications to support it.
At any rate, the time petitioner 4anaga sold the property to petitioner Tan,
the latter "as "ell a"are or the interest of private respondent over the lot.
/etitioner Tan furnished the amount used by petitioner 4anaga for the
attempted redemption. ?ne "ho redeems in vain a property of another
acquires notice that there could be a controversy. !t is for the same reason
that petitioner Tan "as included as party to the case filed in court. 8orse,
at the time of the sale, petitioner Tan "as buying property not registered in
the seller+s name. This clear from the deed of absolute sale "hich even
mentioned that the Certificates of Title is still in the name of private
respondent. !t is settled that a party dealing "ith a registered land need not
go beyond the Certificate of Title to determine the true o"ner thereof so as
to guard or protect her interest. 3he has only to loo( and rely on the entries
in the Certificate of Title. 4y loo(ing at the title, ho"ever, petitioner Tan
cannot feigned ignorance that the property is registered in private
respondent+s name and not in the name of the person selling to her. 3uch
fact alone should have at least prompted, if not impelled her to investigate
deeper into the title of her seller J petitioner 4anaga, more so "hen such
effort "ould not have entailed additional hardship, and "ould have been
quite easy, as the titles still carried the t"o notices of lis pendens.
4y virtue of such notices, petitioner Tan is bound by the outcome of the
litigation sub-ect of the lis pendens. As a transferee pendente lite, she
stands eactly in. the shoes of the transferor and must respect any
-udgment or decree "hich may be rendered for or against the transferor.
>er interest is sub-ect to the incident or results of the pending suit, and her
Certificates of Title "ill, in that respect, afford her no special protection.
;6
To repeat, at the time of the sale, the person from "hom petitioner Tan
bought the property is neither the registered o"ner nor "as the former
authoriHed by the latter to sell the same. 3he (ne" she "as not dealing
"ith the registered o"ner or a representative of the latter. ?ne "ho buys
property "ith full (no"ledge of the fla"s and defects in the title of his
vendor is enough proof of his bad faith
;-
and cannot claim that he acquired
title in good faith as against the o"ner or of an interest therein.
;8
8hen she
nonetheless proceeded to buy the lot, petitioner Tan gambled on the result
of litigation.
;9
3he is bound by the outcome of her indifference "ith no one
to blame ecept herself if she looses her claim as against one "ho has a
superior right or interest over the property. These are the undeniable and
unconverted facts found by the CA, "hich petitioners even quote and cite in
their petition. As aptly concluded by the CA that petitioner Tan is indeed a
buyer in bad faith on "hich the Court agrees2
:ot"ithstanding her constructive and actual (no"ledge that
#amalerio "as claiming the land, that the land "as in his name,
and it "as involved in pending litigation. *ovita Tan bought it
from 4anaga on *anuary 1, &%%'. The deed of sale recites that
the parcels of land so ! "ere covered by Transfer Certificates of
Title :o. 9formerly= ;T-&$)..< T-A'0= and TCT :o. 9formerly ;T-
&$)..< T-A'0= 9si= "and TCT :o. 9formerly /-&$%)= 9Anne "F",
/etition=. Apart from the fact that 4anaga "as "ithout any TCT,
as above stated, TCT :o. T-&$).. "as petitioner+s title 9Anne
"C", /etition=. >erein private respondent Tan "as buying a land
not registered in her seller+s 94anaga+s= name, but in that
petitioner #amalerio "ho had been claiming it as his o"n. 3he
admitted this fact "hen she had the land subdivided on
February $, &%%' not in her name but in the name of Candelario
#amalerio 9Anne "K", Deply=. Fvidently, she "as a purchaser
in bad faith because she had full (no"ledge of the fla"s and
defects of title of her seller, 4anaga . . . .
The notice of lis pendens registered on 5arch ', &%%' involving
the land in question and private respondent Tan+s actual
(no"ledge of the then pending Civil Case :o. $AAG, "here the
question as to "hether the redemption of the land "hich she
financed "as raised, rendered her a purchaser in bad faith and
made the decision therein binding upon her.
,(
4eing a buyer in bad faith, petitioner Tan cannot acquire a better rights than
her predecessor in interest,
,1
for she merely stepped into the shoes of the
latter. 3uch finding of bad faith is final and may not be re-opened for the
la" cannot allo" the parties to trifle "ith the courts.
,;
8ith respect to the issue of possession, such right is a necessary incident
of o"nership.
,,
The ad-udication or o"nership to private respondent
includes the delivery of possession since the defeated parties in this case
has not sho"n by "hat right to retain possession of the land independently
of their claim of o"nership "hich "as re-ected.
,@
?ther"ise, it "ould be
un-ust if petitioners "ho has no valid right over the property "ill retain the
same.
,5
Thus, the CA correctly disagreed "ith the trial court+s order
denying private respondent+s motion for "rit of possession for the follo"ing
reasons cited in its decision2
&. The order violates the doctrine laid do"n in (avier vs. Court
of "ppeals, $$) 3CDA 10), "hich ruled that the issuance of title
in favor of a purchaser in bad faith does not eempt the latter
from complying "ith the decision adverse to his predecessor in
interest, nor preclude him from being reached by "rit of
eecution7
$. /rivate respondent Tan "as a party respondent in CA-@.D.
3/ :o. $%.G%, she having been impleaded in a supplemental
petition, "hich this Court gave due course and required the
respondents to file their ans"er. The fact that she did not file
any pleading, nor intervene therein did not ecuse her from
being bound by the decision, other"ise all that a party
respondent "as to fold his arm to prevent him from being
bound by a decision in a case. >er securing titles over the land
during the pendency of said case did not protect her from the
effects of said decision. The validity of tile of a purchaser of
registered land depends on "hether he had (no"ledge, actual
or constructive, of defects in the title of his vendor. !f he has
such (no"ledge, he is a purchaser in bad faith and acquires the
land sub-ect to such defects 9. . . indicates that citations of
authorities omitted= The title secured by a purchaser in bad faith
is a nullity and gave the latter no right "hatsoever as against
the o"ner 9. . .=.
'. /rivate, respondent Tan+s titles and those of her predecessor,
4anaga arose from the void orders of August 1, &%%$ and
*anuary ), &%%'. 3ince a void order could not give rise to valid
rights, said titles "ere also necessarily null and void 9. . .=.
). /rivate respondents and respondent *udge eecuted the
questioned orders of August 1, &%%' and *anuary ), &%%',
pending revie" of said orders in CA-@.D. 3/ :o. $%.G%. The
nullification of said orders by this out imposed upon the private
respondents the obligation to return the property to #amalerio
and upon respondent *udge, upon motion for eecution, to
order the cancellation of private respondents titles and the
issuance of ne" titles to him.
A. This Court in its decision in CA-@.D. 3/. :o. $%.G% declared
petitioner #amalerio absolute o"ner of the property in question.
/rivate respondents "ere parties litigants in said case, "ho did
not claim possession of the land separately from their claim of
o"nership thereof. 3uch being the case, the delivery of
possession is considered included in this Court+s decision
declaring #amalerio absolute o"ner of the property
9. . .=, "hich can be enforced by "rit of possession 9. . .=. !n
denying petitioner+s motion for "rit of possession, the trial court
violated said doctrines, and
G. 6astly, the effect of respondent *udge+s order of 5arch $%,
&%%G is to re-open the decision in CA-@.D. 3/ :o. $%G.% for re-
litigation and alteration in a separate action. For "hile this Court
already declared that 4anaga+s redemption of the land financed
by private respondent Tan "as invalid, and as a consequence
declared #amalerio absolute o"ner of the property, "hich "as
binding against private respondent Tan, as she "as a
respondent therein and a purchaser pendente lite and in bad
faith, the order of the respondent Court holding that another
civil action be filed to annul private respondent Tan+s titles
"ould be to re-litigate such issues and modify or alter this
Court+s final decision.
The respondent Court has no authority to do so.
,6
8>FDFF?DF, premises considered, the petition is hereby #F:!F# and
the assailed decision of the Court of Appeals is AFF!D5F# in toto "ith
costs against petitioners. :o further proceeding "ill be entertained in this
case.)*!phi).n+t
3? ?D#FDF#
DAVAO SAW MILL CO. VS. CASTILLO 61 SCRA 709
G.R. No. L-@(@11 Au)u*+ -, 19,5
.A=AO SA& M!LL CO., !NC., plaintiff-appellant,
vs.
A"RON!ANO G. CAST!LLO a#$ .A=AO L!GT 9 "O&ER CO.,
!NC., defendants-appellees.
"rsenio Sua,o and (ose L. -alma .il and -ablo Loren,o and /elfin (oven
for appellant.
(.W. Ferrier for appellees.
MALCOLM, J.:
The issue in this case, as announced in the opening sentence of the
decision in the trial court and as set forth by counsel for the parties on
appeal, involves the determination of the nature of the properties described
in the complaint. The trial -udge found that those properties "ere personal
in nature, and as a consequence absolved the defendants from the
complaint, "ith costs against the plaintiff.
The #avao 3a" 5ill Co., !nc., is the holder of a lumber concession from the
@overnment of the /hilippine !slands. !t has operated a sa"mill in
the sitio of 5aa, barrio of Tigatu, municipality of #avao, /rovince of #avao.
>o"ever, the land upon "hich the business "as conducted belonged to
another person. ?n the land the sa"mill company erected a building "hich
housed the machinery used by it. 3ome of the implements thus used "ere
clearly personal property, the conflict concerning machines "hich "ere
placed and mounted on foundations of cement. !n the contract of lease
bet"een the sa"mill company and the o"ner of the land there appeared
the follo"ing provision2
That on the epiration of the period agreed upon, all the
improvements and buildings introduced and erected by the party of
the second part shall pass to the eclusive o"nership of the party of
the first part "ithout any obligation on its part to pay any amount for
said improvements and buildings7 also, in the event the party of the
second part should leave or abandon the land leased before the time
herein stipulated, the improvements and buildings shall li(e"ise pass
to the o"nership of the party of the first part as though the time
agreed upon had epired2 /rovided, ho"ever, That the machineries
and accessories are not included in the improvements "hich "ill pass
to the party of the first part on the epiration or abandonment of the
land leased.
!n another action, "herein the #avao 6ight I /o"er Co., !nc., "as the
plaintiff and the #avao, 3a", 5ill Co., !nc., "as the defendant, a -udgment
"as rendered in favor of the plaintiff in that action against the defendant in
that action7 a "rit of eecution issued thereon, and the properties no" in
question "ere levied upon as personalty by the sheriff. :o third party claim
"as filed for such properties at the time of the sales thereof as is borne out
by the record made by the plaintiff herein. !ndeed the bidder, "hich "as the
plaintiff in that action, and the defendant herein having consummated the
sale, proceeded to ta(e possession of the machinery and other properties
described in the corresponding certificates of sale eecuted in its favor by
the sheriff of #avao.
As connecting up "ith the facts, it should further be eplained that the
#avao 3a" 5ill Co., !nc., has on a number of occasions treated the
machinery as personal property by eecuting chattel mortgages in favor of
third persons. ?ne of such persons is the appellee by assignment from the
original mortgages.
Article ''), paragraphs & and A, of the Civil Code, is in point. According to
the Code, real property consists of J
&. 6and, buildings, roads and constructions of all (inds adhering to
the soil7

A. 5achinery, liquid containers, instruments or implements intended
by the o"ner of any building or land for use in connection "ith any
industry or trade being carried on therein and "hich are epressly
adapted to meet the requirements of such trade of industry.
Appellant emphasiHes the first paragraph, and appellees the last mentioned
paragraph. 8e entertain no doubt that the trial -udge and appellees are
right in their appreciation of the legal doctrines flo"ing from the facts.
!n the first place, it must again be pointed out that the appellant should
have registered its protest before or at the time of the sale of this property.
!t must further be pointed out that "hile not conclusive, the characteriHation
of the property as chattels by the appellant is indicative of intention and
impresses upon the property the character determined by the parties. !n
this connection the decision of this court in the case of 3tandard ?il Co. of
:e" Eor( vs. *aramillo 9 ;&%$'<, )) /hil., G'0=, "hether obiter dita or not,
furnishes the (ey to such a situation.
!t is, ho"ever not necessary to spend overly must time in the resolution of
this appeal on side issues. !t is machinery "hich is involved7 moreover,
machinery not intended by the o"ner of any building or land for use in
connection there"ith, but intended by a lessee for use in a building erected
on the land by the latter to be returned to the lessee on the epiration or
abandonment of the lease.
A similar question arose in /uerto Dico, and on appeal being ta(en to the
,nited 3tates 3upreme Court, it "as held that machinery "hich is movable
in its nature only becomes immobiliHed "hen placed in a plant by the o"ner
of the property or plant, but not "hen so placed by a tenant, a usufructuary,
or any person having only a temporary right, unless such person acted as
the agent of the o"ner. !n the opinion "ritten by Chief *ustice 8hite, "hose
(no"ledge of the Civil 6a" is "ell (no"n, it "as in part said2
To determine this question involves fiing the nature and character of
the property from the point of vie" of the rights of Baldes and its
nature and character from the point of vie" of :evers I Callaghan as
a -udgment creditor of the Altagracia Company and the rights derived
by them from the eecution levied on the machinery placed by the
corporation in the plant. Follo"ing the Code :apoleon, the /orto
Dican Code treats as immovable 9real= property, not only land and
buildings, but also attributes immovability in some cases to property
of a movable nature, that is, personal property, because of the
destination to "hich it is applied. "Things," says section '') of the
/orto Dican Code, "may be immovable either by their o"n nature or
by their destination or the ob-ect to "hich they are applicable."
:umerous illustrations are given in the fifth subdivision of section
''A, "hich is as follo"s2 "5achinery, vessels, instruments or
implements intended by the o"ner of the tenements for the industrial
or "or(s that they may carry on in any building or upon any land and
"hich tend directly to meet the needs of the said industry or "or(s."
9See also Code :ap., articles A&G, A&. et se&. to and inclusive of
article A'), recapitulating the things "hich, though in themselves
movable, may be immobiliHed.= 3o far as the sub-ect-matter "ith
"hich "e are dealing J machinery placed in the plant J it is plain,
both under the provisions of the /orto Dican 6a" and of the Code
:apoleon, that machinery "hich is movable in its nature only
becomes immobiliHed "hen placed in a plant by the o"ner of the
property or plant. 3uch result "ould not be accomplished, therefore,
by the placing of machinery in a plant by a tenant or a usufructuary or
any person having only a temporary right. 9#emolombe, Tit. %, :o.
$0'7 Aubry et Dau, Tit. $, p. &$, 3ection &G)7 6aurent, Tit. A, :o. ))17
and decisions quoted in FuHier->erman ed. Code :apoleon under
articles A$$ et se&.= The distinction rests, as pointed out by
#emolombe, upon the fact that one only having a temporary right to
the possession or en-oyment of property is not presumed by the la"
to have applied movable property belonging to him so as to deprive
him of it by causing it by an act of immobiliHation to become the
property of another. !t follo"s that abstractly spea(ing the machinery
put by the Altagracia Company in the plant belonging to 3ancheH did
not lose its character of movable property and become immovable by
destination. 4ut in the concrete immobiliHation too( place because of
the epress provisions of the lease under "hich the Altagracia held,
since the lease in substance required the putting in of improved
machinery, deprived the tenant of any right to charge against the
lessor the cost such machinery, and it "as epressly stipulated that
the machinery so put in should become a part of the plant belonging
to the o"ner "ithout compensation to the lessee. ,nder such
conditions the tenant in putting in the machinery "as acting but as the
agent of the o"ner in compliance "ith the obligations resting upon
him, and the immobiliHation of the machinery "hich resulted arose in
legal effect from the act of the o"ner in giving by contract a
permanent destination to the machinery.

The machinery levied upon by :evers I Callaghan, that is, that "hich
"as placed in the plant by the Altagracia Company, being, as regards
:evers I Callaghan, movable property, it follo"s that they had the
right to levy on it under the eecution upon the -udgment in their
favor, and the eercise of that right did not in a legal sense conflict
"ith the claim of Baldes, since as to him the property "as a part of
the realty "hich, as the result of his obligations under the lease, he
could not, for the purpose of collecting his debt, proceed separately
against. 9Baldes vs. Central Altagracia ;&%$<, $$A ,.3., A..=
Finding no reversible error in the record, the -udgment appealed from "ill
be affirmed, the costs of this instance to be paid by the appellant.
4.>. 4FDLF:L?TTFD B. C, ,:*!F:@, G& />!6 GG'
G.R. No. L-@16@, %u6y ,1, 19,5
/.. /ERKENKOTTER, plaintiff-appellant,
vs.
CU UN%!ENG E !%OS, YEK TONG L!N F!RE AN. MAR!NE
!NSURANCE COM"ANY, MA/ALACAT SUGAR COM"ANY a#$ TE
"RO=!NCE SER!FF OF "AM"ANGA, defendants-appellees.
Briones and Martine, for appellant.
"raneta, 0ara#o,a and "raneta for appellees Cu 1n'ien# e 2i'os.
3o appearane for the other appellees.
=!LLA-REAL, J.:
This is an appeal ta(en by the plaintiff, 4.>. 4er(en(otter, from the
-udgment of the Court of First !nstance of 5anila, dismissing said plaintiff+s
complaint against Cu ,n-iengs e >i-os et al., "ith costs.
!n support of his appeal, the appellant assigns si alleged errors as
committed by the trial court in its decision in question "hich "ill be
discussed in the course of this decision.
The first question to be decided in this appeal, "hich is raised in the first
assignment of alleged error, is "hether or not the lo"er court erred in
declaring that the additional machinery and equipment, as improvement
incorporated "ith the central are sub-ect to the mortgage deed eecuted in
favor of the defendants Cu ,n-ieng e >i-os.
!t is admitted by the parties that on April $G, &%$G, the 5abalacat 3ugar
Co., !nc., o"ner of the sugar central situated in 5abalacat, /ampanga,
obtained from the defendants, Cu ,n-ieng e >i-os, a loan secured by a first
mortgage constituted on t"o parcels and land ""ith all its buildings,
improvements, sugar-cane mill, steel rail"ay, telephone line, apparatus,
utensils and "hatever forms part or is necessary complement of said
sugar-cane mill, steel rail"ay, telephone line, no" eisting or that may in
the future eist is said lots."
?n ?ctober A, &%$G, shortly after said mortgage had been constituted, the
5abalacat 3ugar Co., !nc., decided to increase the capacity of its sugar
central by buying additional machinery and equipment, so that instead of
milling &A0 tons daily, it could produce $A0. The estimated cost of said
additional machinery and equipment "as approimately /&00,000. !n order
to carry out this plan, 4.A. @reen, president of said corporation, proposed
to the plaintiff, 4.>. 4er(en(otter, to advance the necessary amount for the
purchase of said machinery and equipment, promising to reimburse him as
soon as he could obtain an additional loan from the mortgagees, the herein
defendants Cu ,n-ieng e >i-os. >aving agreed to said proposition made in
a letter dated ?ctober A, &%$G 9Fhibit F=, 4.>. 4er(en(otter, on ?ctober
%th of the same year, delivered the sum of /&,1&0 to 4.A. @reen, president
of the 5abalacat 3ugar Co., !nc., the total amount supplied by him to said
4.A. @reen having been /$A,1A0. Furthermore, 4.>. 4er(en(otter had a
credit of /$$,000 against said corporation for unpaid salary. 8ith the loan
of /$A,1A0 and said credit of /$$,000, the 5abalacat 3ugar Co., !nc.,
purchased the additional machinery and equipment no" in litigation.
?n *une &0, &%$1, 4.A. @reen, president of the 5abalacat 3ugar Co., !nc.,
applied to Cu ,n-ieng e >i-os for an additional loan of /1A,000 offering as
security the additional machinery and equipment acquired by said 4.A.
@reen and installed in the sugar central after the eecution of the original
mortgage deed, on April $1, &%$1, together "ith "hatever additional
equipment acquired "ith said loan. 4.A. @reen failed to obtain said loan.
Article &.11 of the Civil Code provides as follo"s.
ADT. &.11. A mortgage includes all natural accessions,
improvements, gro"ing fruits, and rents not collected "hen the
obligation falls due, and the amount of any indemnities paid or due
the o"ner by the insurers of the mortgaged property or by virtue of
the eercise of the po"er of eminent domain, "ith the declarations,
amplifications, and limitations established by la", "hether the estate
continues in the possession of the person "ho mortgaged it or
"hether it passes into the hands of a third person.
!n the case of Bishoff vs. -omar and Compa4ia .eneral de Tabaos 9&$
/hil., G%0=, cited "ith approval in the case of Cea vs. 5illanueva 9&. /hil.,
A'.=, this court laid sho"n the follo"ing doctrine2
&. DFA6TE7 5?DT@A@F ?F DFA6 F3TATF !:C6,#F3
!5/D?BF5F:T3 A:# F!MT,DF3. J !t is a rule, established by the
Civil Code and also by the 5ortgage 6a", "ith "hich the decisions of
the courts of the ,nited 3tates are in accord, that in a mortgage of
real estate, the improvements on the same are included7 therefore, all
ob-ects permanently attached to a mortgaged building or land,
although they may have been placed there after the mortgage "as
constituted, are also included. 9Arts. &&0 and &&& of the 5ortgage
6a", and &.11 of the Civil Code7 decision of ,.3. 3upreme Court in
the matter of Doyal !nsurance Co. vs. D. 5iller, liquidator, and
Amadeo ;$G 3up. Ct. Dep., )G7 &%% ,.3., 'A'<.=
$. I/.7 I/.7 !:C6,3!?: ?D FMC6,3!?: ?F 5AC>!:FDE, FTC. J
!n order that it may be understood that the machinery and other
ob-ects placed upon and used in connection "ith a mortgaged estate
are ecluded from the mortgage, "hen it "as stated in the mortgage
that the improvements, buildings, and machinery that eisted thereon
"ere also comprehended, it is indispensable that the eclusion
thereof be stipulated bet"een the contracting parties.
The appellant contends that the installation of the machinery and
equipment claimed by him in the sugar central of the 5abalacat 3ugar
Company, !nc., "as not permanent in character inasmuch as 4.A. @reen, in
proposing to him to advance the money for the purchase thereof, made it
appear in the letter, Fhibit F, that in case 4.A. @reen should fail to obtain
an additional loan from the defendants Cu ,n-ieng e >i-os, said machinery
and equipment "ould become security therefor, said 4.A. @reen binding
himself not to mortgage nor encumber them to anybody until said plaintiff
be fully reimbursed for the corporation+s indebtedness to him.
,pon acquiring the machinery and equipment in question "ith money
obtained as loan from the plaintiff-appellant by 4.A. @reen, as president of
the 5abalacat 3ugar Co., !nc., the latter became o"ner of said machinery
and equipment, other"ise 4.A. @reen, as such president, could not have
offered them to the plaintiff as security for the payment of his credit.
Article ''), paragraph A, of the Civil Code gives the character of real
property to "machinery, liquid containers, instruments or implements
intended by the o"ner of any building or land for use in connection "ith any
industry or trade being carried on therein and "hich are epressly adapted
to meet the requirements of such trade or industry.
!f the installation of the machinery and equipment in question in the central
of the 5abalacat 3ugar Co., !nc., in lieu of the other of less capacity
eisting therein, for its sugar industry, converted them into real property by
reason of their purpose, it cannot be said that their incorporation there"ith
"as not permanent in character because, as essential and principal
elements of a sugar central, "ithout them the sugar central "ould be
unable to function or carry on the industrial purpose for "hich it "as
established. !nasmuch as the central is permanent in character, the
necessary machinery and equipment installed for carrying on the sugar
industry for "hich it has been established must necessarily be permanent.
Furthermore, the fact that 4.A. @reen bound himself to the plaintiff 4.>.
4er(en(otter to hold said machinery and equipment as security for the
payment of the latter+s credit and to refrain from mortgaging or other"ise
encumbering them until 4er(en(otter has been fully reimbursed therefor, is
not incompatible "ith the permanent character of the incorporation of said
machinery and equipment "ith the sugar central of the 5abalacat 3ugar
Co., !nc., as nothing could prevent 4.A. @reen from giving them as security
at least under a second mortgage.
As to the alleged sale of said machinery and equipment to the plaintiff and
appellant after they had been permanently incorporated "ith sugar central
of the 5abalacat 3ugar Co., !nc., and "hile the mortgage constituted on
said sugar central to Cu ,n-ieng e >i-os remained in force, only the right of
redemption of the vendor 5abalacat 3ugar Co., !nc., in the sugar central
"ith "hich said machinery and equipment had been incorporated, "as
transferred thereby, sub-ect to the right of the defendants Cu ,n-ieng e
>i-os under the first mortgage.
For the foregoing considerations, "e are of the opinion and so hold2 9&=
That the installation of a machinery and equipment in a mortgaged sugar
central, in lieu of another of less capacity, for the purpose of carrying out
the industrial functions of the latter and increasing production, constitutes a
permanent improvement on said sugar central and sub-ects said machinery
and equipment to the mortgage constituted thereon 9article &.11, Civil
Code=7 9$= that the fact that the purchaser of the ne" machinery and
equipment has bound himself to the person supplying him the purchase
money to hold them as security for the payment of the latter+s credit, and to
refrain from mortgaging or other"ise encumbering them does not alter the
permanent character of the incorporation of said machinery and equipment
"ith the central7 and 9'= that the sale of the machinery and equipment in
question by the purchaser "ho "as supplied the purchase money, as a
loan, to the person "ho supplied the money, after the incorporation thereof
"ith the mortgaged sugar central, does not vest the creditor "ith o"nership
of said machinery and equipment but simply "ith the right of redemption.
8herefore, finding no error in the appealed -udgment, it is affirmed in all its
parts, "ith costs to the appellant. 3o ordered.
5ALAT! 6FA3!:@ A:# F!:A:CF C?D/. B3. 8FADFBFD TFMT!6F
5!663, &$$ 3CDA $%G
G.R. No. L-58@69 May 16, 198,
MAKAT! LEAS!NG a#$ F!NANCE COR"ORAT!ON, petitioner,
vs.
&EARE=ER TEAT!LE M!LLS, !NC., a#$ ONORA/LE COURT OF
A""EALS, respondents.
Loreto C. Baduan for petitioner.
Ramon /. Ba#atsin# 6 "sso. 7ollaboratin# ounsel8 for petitioner.
(ose 5. Manella for respondent.

.E CASTRO, J.:
/etition for revie" on certiorari of the decision of the Court of Appeals 9no"
!ntermediate Appellate Court= promulgated on August $1, &%.& in CA-@.D.
:o. 3/-&$1'&, setting aside certain ?rders later specified herein, of *udge
Dicardo *. Francisco, as /residing *udge of the Court of First instance of
DiHal 4ranch B!, issued in Civil Case :o. 'G0)0, as "en as the resolution
dated 3eptember $$, &%.& of the said appellate court, denying petitioner+s
motion for reconsideration.
!t appears that in order to obtain financial accommodations from herein
petitioner 5a(ati 6easing and Finance Corporation, the private respondent
8earever Tetile 5ills, !nc., discounted and assigned several receivables
"ith the former under a Deceivable /urchase Agreement. To secure the
collection of the receivables assigned, private respondent eecuted a
Chattel 5ortgage over certain ra" materials inventory as "ell as a
machinery described as an Artos Aero #ryer 3tentering Dange.
,pon private respondent+s default, petitioner filed a petition for etra-udicial
foreclosure of the properties mortgage to it. >o"ever, the #eputy 3heriff
assigned to implement the foreclosure failed to gain entry into private
respondent+s premises and "as not able to effect the seiHure of the
aforedescribed machinery. /etitioner thereafter filed a complaint for -udicial
foreclosure "ith the Court of First !nstance of DiHal, 4ranch B!, doc(eted as
Civil Case :o. 'G0)0, the case before the lo"er court.
Acting on petitioner+s application for replevin, the lo"er court issued a "rit
of seiHure, the enforcement of "hich "as ho"ever subsequently restrained
upon private respondent+s filing of a motion for reconsideration. After
several incidents, the lo"er court finally issued on February &&, &%.&, an
order lifting the restraining order for the enforcement of the "rit of seiHure
and an order to brea( open the premises of private respondent to enforce
said "rit. The lo"er court reaffirmed its stand upon private respondent+s
filing of a further motion for reconsideration.
?n *uly &', &%.&, the sheriff enforcing the seiHure order, repaired to the
premises of private respondent and removed the main drive motor of the
sub-ect machinery.
The Court of Appeals, in certiorari and prohibition proceedings
subsequently filed by herein private respondent, set aside the ?rders of the
lo"er court and ordered the return of the drive motor seiHed by the sheriff
pursuant to said ?rders, after ruling that the machinery in suit cannot be
the sub-ect of replevin, much less of a chattel mortgage, because it is a real
property pursuant to Article )&A of the ne" Civil Code, the same being
attached to the ground by means of bolts and the only "ay to remove it
from respondent+s plant "ould be to drill out or destroy the concrete floor,
the reason "hy all that the sheriff could do to enfore the "rit "as to ta(e
the main drive motor of said machinery. The appellate court re-ected
petitioner+s argument that private respondent is estopped from claiming that
the machine is real property by constituting a chattel mortgage thereon.
A motion for reconsideration of this decision of the Court of Appeals having
been denied, petitioner has brought the case to this Court for revie" by "rit
of certiorari. !t is contended by private respondent, ho"ever, that the instant
petition "as rendered moot and academic by petitioner+s act of returning
the sub-ect motor drive of respondent+s machinery after the Court of
Appeals+ decision "as promulgated.
The contention of private respondent is "ithout merit. 8hen petitioner
returned the sub-ect motor drive, it made itself unequivocably clear that
said action "as "ithout pre-udice to a motion for reconsideration of the
Court of Appeals decision, as sho"n by the receipt duly signed by
respondent+s representative.
1
Considering that petitioner has reserved its
right to question the propriety of the Court of Appeals+ decision, the
contention of private respondent that this petition has been mooted by such
return may not be sustained.
The net and the more crucial question to be resolved in this /etition is
"hether the machinery in suit is real or personal property from the point of
vie" of the parties, "ith petitioner arguing that it is a personality, "hile the
respondent claiming the contrary, and "as sustained by the appellate court,
"hich accordingly held that the chattel mortgage constituted thereon is null
and void, as contended by said respondent.
A similar, if not !dentical issue "as raised in Tumalad v. 5ienio, )& 3CDA
&)' "here this Court, spea(ing through *ustice *.4.6. Deyes, ruled2
Although there is no specific statement referring to the sub-ect
house as personal property, yet by ceding, selling or
transferring a property by "ay of chattel mortgage defendants-
appellants could only have meant to convey the house as
chattel, or at least, intended to treat the same as such, so that
they should not no" be allo"ed to ma(e an inconsistent stand
by claiming other"ise. 5oreover, the sub-ect house stood on a
rented lot to "hich defendants-appellants merely had a
temporary right as lessee, and although this can not in itself
alone determine the status of the property, it does so "hen
combined "ith other factors to sustain the interpretation that the
parties, particularly the mortgagors, intended to treat the house
as personality. Finally, unli(e in the !ya cases, Lope, vs. 9rosa,
(r. 6 -la,a Theatre, In. 6 Leun# $ee vs. F.L. Stron#
Mahinery 6 Williamson, "herein third persons assailed the
validity of the chattel mortgage, it is the defendants-appellants
themselves, as debtors-mortgagors, "ho are attac(ing the
validity of the chattel mortgage in this case. The doctrine of
estoppel therefore applies to the herein defendants-appellants,
having treated the sub-ect house as personality.
Famining the records of the instant case, 8e find no logical -ustification to
eclude the rule out, as the appellate court did, the present case from the
application of the abovequoted pronouncement. !f a house of strong
materials, li(e "hat "as involved in the above Tumalad case, may be
considered as personal property for purposes of eecuting a chattel
mortgage thereon as long as the parties to the contract so agree and no
innocent third party "ill be pre-udiced thereby, there is absolutely no reason
"hy a machinery, "hich is movable in its nature and becomes immobiliHed
only by destination or purpose, may not be li(e"ise treated as such. This is
really because one "ho has so agreed is estopped from denying the
eistence of the chattel mortgage.
!n re-ecting petitioner+s assertion on the applicability of the Tumalad
doctrine, the Court of Appeals lays stress on the fact that the house
involved therein "as built on a land that did not belong to the o"ner of such
house. 4ut the la" ma(es no distinction "ith respect to the o"nership of
the land on "hich the house is built and 8e should not lay do"n
distinctions not contemplated by la".
!t must be pointed out that the characteriHation of the sub-ect machinery as
chattel by the private respondent is indicative of intention and impresses
upon the property the character determined by the parties. As stated
inStandard 9il Co. of 3e! $or% v. (aramillo, )) /hil. G'0, it is undeniable
that the parties to a contract may by agreement treat as personal property
that "hich by nature "ould be real property, as long as no interest of third
parties "ould be pre-udiced thereby.
/rivate respondent contends that estoppel cannot apply against it because
it had never represented nor agreed that the machinery in suit be
considered as personal property but "as merely required and dictated on
by herein petitioner to sign a printed form of chattel mortgage "hich "as in
a blan( form at the time of signing. This contention lac(s persuasiveness.
As aptly pointed out by petitioner and not denied by the respondent, the
status of the sub-ect machinery as movable or immovable "as never
placed in issue before the lo"er court and the Court of Appeals ecept in a
supplemental memorandum in support of the petition filed in the appellate
court. 5oreover, even granting that the charge is true, such fact alone does
not render a contract void ab initio, but can only be a ground for rendering
said contract voidable, or annullable pursuant to Article &'%0 of the ne"
Civil Code, by a proper action in court. There is nothing on record to sho"
that the mortgage has been annulled. :either is it disclosed that steps "ere
ta(en to nullify the same. ?n the other hand, as pointed out by petitioner
and again not refuted by respondent, the latter has indubitably benefited
from said contract. Fquity dictates that one should not benefit at the
epense of another. /rivate respondent could not no" therefore, be
allo"ed to impugn the efficacy of the chattel mortgage after it has benefited
therefrom,
From "hat has been said above, the error of the appellate court in ruling
that the questioned machinery is real, not personal property, becomes very
apparent. 5oreover, the case of Mahinery and :n#ineerin# Supplies, In.
v. C", %G /hil. 10, heavily relied upon by said court is not applicable to the
case at bar, the nature of the machinery and equipment involved therein as
real properties never having been disputed nor in issue, and they "ere not
the sub-ect of a Chattel 5ortgage. ,ndoubtedly, the Tumalad case bears
more nearly perfect parity "ith the instant case to be the more controlling
-urisprudential authority.
8>FDFF?DF, the questioned decision and resolution of the Court of
Appeals are hereby reversed and set aside, and the ?rders of the lo"er
court are hereby reinstated, "ith costs against the private respondent.
3? ?D#FDF#.
4?AD# ?F A33F335F:T A//FA63, K.C. B3. 5FDA6C?, &0 3CDA G.
G.R. No. L-15,,@ %a#uary ,1, 196@
/OAR. OF ASSESSMENT A""EALS, C!TY ASSESSOR a#$ C!TY
TREASURER OF <UE4ON C!TY,petitioners,
vs.
MAN!LA ELECTR!C COM"ANY, respondent.
"ssistant City "ttorney (aime R. "#loro for petitioners.
Ross, Selph and Carrasoso for respondent.
"ARE.ES, J.:
From the stipulation of facts and evidence adduced during the hearing, the
follo"ing appear2
?n ?ctober $0, &%0$, the /hilippine Commission enacted Act :o. ).)
"hich authoriHed the 5unicipal 4oard of 5anila to grant a franchise to
construct, maintain and operate an electric street rail"ay and electric light,
heat and po"er system in the City of 5anila and its suburbs to the person
or persons ma(ing the most favorable bid. Charles 5. 3"ift "as a"arded
the said franchise on 5arch &%0', the terms and conditions of "hich "ere
embodied in ?rdinance :o. )) approved on 5arch $), &%0'. Despondent
5anila Flectric Co. 95eralco for short=, became the transferee and o"ner of
the franchise.
5eralco+s electric po"er is generated by its hydro-electric plant located at
4otocan Falls, 6aguna and is transmitted to the City of 5anila by means of
electric transmission "ires, running from the province of 6aguna to the said
City. These electric transmission "ires "hich carry high voltage current, are
fastened to insulators attached on steel to"ers constructed by respondent
at intervals, from its hydro-electric plant in the province of 6aguna to the
City of 5anila. The respondent 5eralco has constructed )0 of these steel
to"ers "ithin KueHon City, on land belonging to it. A photograph of one of
these steel to"ers is attached to the petition for revie", mar(ed Anne A.
Three steel to"ers "ere inspected by the lo"er court and parties and the
follo"ing "ere the descriptions given there of by said court2
The first steel to"er is located in 3outh Tatalon, Fspaa Ftension,
KueHon City. The findings "ere as follo"s2 the ground around one of
the four posts "as ecavated to a depth of about eight 9.= feet, "ith
an opening of about one 9&= meter in diameter, decreased to about a
quarter of a meter as it "e deeper until it reached the bottom of the
post7 at the bottom of the post "ere t"o parallel steel bars attached to
the leg means of bolts7 the to"er proper "as attached to the leg three
bolts7 "ith t"o cross metals to prevent mobility7 there "as no
concrete foundation but there "as adobe stone underneath7 as the
bottom of the ecavation "as covered "ith "ater about three inches
high, it could not be determined "ith certainty to "hether said adobe
stone "as placed purposely or not, as the place abounds "ith this
(ind of stone7 and the to"er carried five high voltage "ires "ithout
cover or any insulating materials.
The second to"er inspected "as located in Lamuning Doad, L-F,
KueHon City, on land o"ned by the petitioner approimate more than
one (ilometer from the first to"er. As in the first to"er, the ground
around one of the four legs "as ecavate from seven to eight 9.= feet
deep and one and a half 9&-N= meters "ide. There being very little
"ater at the bottom, it "as seen that there "as no concrete
foundation, but there soft adobe beneath. The leg "as li(e"ise
provided "ith t"o parallel steel bars bolted to a square metal frame
also bolted to each corner. 6i(e the first one, the second to"er is
made up of metal rods -oined together by means of bolts, so that by
unscre"ing the bolts, the to"er could be dismantled and
reassembled.
The third to"er eamined is located along Lamias Doad, KueHon
City. As in the first t"o to"ers given above, the ground around the
t"o legs of the third to"er "as ecavated to a depth about t"o or
three inches beyond the outside level of the steel bar foundation. !t
"as found that there "as no concrete foundation. 6i(e the t"o
previous ones, the bottom arrangement of the legs thereof "ere
found to be resting on soft adobe, "hich, probably due to high
humidity, loo(s li(e mud or clay. !t "as also found that the square
metal frame supporting the legs "ere not attached to any material or
foundation.
?n :ovember &A, &%AA, petitioner City Assessor of KueHon City declared
the aforesaid steel to"ers for real property ta under Ta declaration :os.
'&%%$ and &AA)%. After denying respondent+s petition to cancel these
declarations, an appeal "as ta(en by respondent to the 4oard of
Assessment Appeals of KueHon City, "hich required respondent to pay the
amount of /&&,GA&..G as real property ta on the said steel to"ers for the
years &%A$ to &%AG. Despondent paid the amount under protest, and filed a
petition for revie" in the Court of Ta Appeals 9CTA for short= "hich
rendered a decision on #ecember $%, &%A., ordering the cancellation of
the said ta declarations and the petitioner City Treasurer of KueHon City to
refund to the respondent the sum of /&&,GA&..G. The motion for
reconsideration having been denied, on April $$, &%A%, the instant petition
for revie" "as filed.
!n upholding the cause of respondents, the CTA held that2 9&= the steel
to"ers come "ithin the term "poles" "hich are declared eempt from taes
under part !! paragraph % of respondent+s franchise7 9$= the steel to"ers are
personal properties and are not sub-ect to real property ta7 and 9'= the City
Treasurer of KueHon City is held responsible for the refund of the amount
paid. These are assigned as errors by the petitioner in the brief.
The ta eemption privilege of the petitioner is quoted hereunder2
/AD %. The grantee shall be liable to pay the same taes upon its
real estate, buildings, plant 9not including poles, "ires, transformers,
and insulators=, machinery and personal property as other persons
are or may be hereafter required by la" to pay ... 3aid percentage
shall be due and payable at the time stated in paragraph nineteen of
/art ?ne hereof, ... and shall be in lieu of all ta;es and assessments
of !hatsoever nature and by !hatsoever authority upon the
privile#es, earnin#s, inome, franhise, and poles, "ires,
transformers, and insulators of the grantee from "hich taes and
assessments the granteeis hereby e;pressly e;empted. 9/ar. %, /art
T"o, Act :o. ).) Despondent+s Franchise7 emphasis supplied.=
The "ord "pole" means "a long, comparatively slender usually cylindrical
piece of "ood or timber, as typically the stem of a small tree stripped of its
branches7 also by etension, a similar typically cylindrical piece or ob-ect of
metal or the li(e". The term also refers to "an upri#ht standard to the top of
!hih somethin# is affi;ed or by !hih somethin# is supported7 as a
dovecote set on a pole7 telegraph poles7 a tent pole7 sometimes,
specifically a vessel+s master 98ebster+s :e" !nternational #ictionary $nd
Fd., p. &%01.= Along the streets, in the City of 5anila, may be seen
cylindrical metal poles, cubical concrete poles, and poles of the /6#T Co.
"hich are made of t"o steel bars -oined together by an interlacing metal
rod. They are called "poles" not"ithstanding the fact that they are no made
of "ood. !t must be noted from paragraph %, above quoted, that the
concept of the "poles" for "hich eemption is granted, is not determined by
their place or location, nor by the character of the electric current it carries,
nor the material or form of "hich it is made, but the use to "hich they are
dedicated. !n accordance "ith the definitions, pole is not restricted to a long
cylindrical piece of "ood or metal, but includes "upright standards to the top
of "hich something is affied or by "hich something is supported. As
heretofore described, respondent+s steel supports consists of a frame"or(
of four steel bars or strips "hich are bound by steel cross-arms atop of
"hich are cross-arms supporting five high voltage transmission "ires 93ee
Anne A= and their sole function is to support or carry such "ires.
The conclusion of the CTA that the steel supports in question are embraced
in the term "poles" is not a novelty. 3everal courts of last resort in the
,nited 3tates have called these steel supports "steel to"ers", and they
denominated these supports or to"ers, as electric poles. !n their decisions
the "ords "to"ers" and "poles" "ere used interchangeably, and it is "ell
understood in that -urisdiction that a transmission to"er or pole means the
same thing.
!n a proceeding to condemn land for the use of electric po"er "ires, in
"hich the la" provided that "ires shall be constructed upon suitable poles,
this term "as construed to mean either "ood or metal poles and in vie" of
the land being sub-ect to overflo", and the necessary carrying of numerous
"ires and the distance bet"een poles, the statute "as interpreted to
include to!ers or poles. 93temmons and #allas 6ight Co. 9Te= $&$ 3.8.
$$$, $$)7 '$-A 8ords and /hrases, p. 'GA.=
The term "poles" "as also used to denominate the steel supports or to"ers
used by an association used to convey its electric po"er furnished to
subscribers and members, constructed for the purpose of fastening high
voltage and dangerous electric "ires alongside public high"ays. The steel
supports or to"ers "ere made of iron or other metals consisting of t"o
pieces running from the ground up some thirty feet high, being "ider at the
bottom than at the top, the said t"o metal pieces being connected "ith
criss-cross iron running from the bottom to the top, constructed li(e ladders
and loaded "ith high voltage electricity. !n form and structure, they are li(e
the steel to"ers in question. 93alt Diver Balley ,sers+ Ass+n v. Compton, .
/. $nd, $)%-$A0.=
The term "poles" "as used to denote the steel to"ers of an electric
company engaged in the generation of hydro-electric po"er generated from
its plant to the To"er of ?ford and City of 8aterbury. These steel to"ers
are about &A feet square at the base and etended to a height of about 'A
feet to a point, and are embedded in the cement foundations sun( in the
earth, the top of "hich etends above the surface of the soil in the to"er of
?ford, and to the to"ers are attached insulators, arms, and other
equipment capable of carrying "ires for the transmission of electric po"er
9Connecticut 6ight and /o"er Co. v. ?ford, &0& Conn. '.', &$G Atl. p. &=.
!n a case, the defendant admitted that the structure on "hich a certain
person met his death "as built for the purpose of supporting a transmission
"ire used for carrying high-tension electric po"er, but claimed that the steel
to"ers on "hich it is carried "ere so large that their "ire too( their structure
out of the definition of a pole line. !t "as held that in defining the "ord pole,
one should not be governed by the "ire or material of the support used, but
"as considering the danger from any elevated "ire carrying electric
current, and that regardless of the siHe or material "ire of its individual
members, any continuous series of structures intended and used solely or
primarily for the purpose of supporting "ires carrying electric currents is a
pole line 9!nspiration Consolidation Cooper Co. v. 4ryan $A$ /. &0&G=.
!t is evident, therefore, that the "ord "poles", as used in Act :o. ).) and
incorporated in the petitioner+s franchise, should not be given a restrictive
and narro" interpretation, as to defeat the very ob-ect for "hich the
franchise "as granted. The poles as contemplated thereon, should be
understood and ta(en as a part of the electric po"er system of the
respondent 5eralco, for the conveyance of electric current from the source
thereof to its consumers. !f the respondent "ould be required to employ
""ooden poles", or "rounded poles" as it used to do fifty years bac(, then
one should admit that the /hilippines is one century behind the age of
space. !t should also be conceded by no" that steel to"ers, li(e the ones in
question, for obvious reasons, can better effectuate the purpose for "hich
the respondent+s franchise "as granted.
@ranting for the purpose of argument that the steel supports or to"ers in
question are not embraced "ithin the term poles, the logical question
posited is "hether they constitute real properties, so that they can be
sub-ect to a real property ta. The ta la" does not provide for a definition
of real property7 but Article )&A of the Civil Code does, by stating the
follo"ing are immovable property2
9&= 6and, buildings, roads, and constructions of all (inds adhered to
the soil7

9'= Fverything attached to an immovable in a fi;ed manner, in such a
"ay that it cannot be separated therefrom "ithout brea(ing the
material or deterioration of the ob-ect7

9A= 5achinery, receptacles, instruments or implements intended by
the o"ner of the tenement for an industry or "or(s "hich may be
carried in a building or on a piece of land, and "hich tends directly to
meet the needs of the said industry or "or(s7

The steel to"ers or supports in question, do not come "ithin the ob-ects
mentioned in paragraph &, because they do not constitute buildings or
constructions adhered to the soil. They are not construction analogous to
buildings nor adhering to the soil. As per description, given by the lo"er
court, they are removable and merely attached to a square metal frame by
means of bolts, "hich "hen unscre"ed could easily be dismantled and
moved from place to place. They can not be included under paragraph ',
as they are not attached to an immovable in a fied manner, and they can
be separated "ithout brea(ing the material or causing deterioration upon
the ob-ect to "hich they are attached. Fach of these steel to"ers or
supports consists of steel bars or metal strips, -oined together by means of
bolts, "hich can be disassembled by unscre"ing the bolts and
reassembled by scre"ing the same. These steel to"ers or supports do not
also fall under paragraph A, for they are not machineries, receptacles,
instruments or implements, and even if they "ere, they are not intended for
industry or "or(s on the land. /etitioner is not engaged in an industry or
"or(s in the land in "hich the steel supports or to"ers are constructed.
!t is finally contended that the CTA erred in ordering the City Treasurer of
KueHon City to refund the sum of /&&,GA&..G, despite the fact that KueHon
City is not a party to the case. !t is argued that as the City Treasurer is not
the real party in interest, but KueHon City, "hich "as not a party to the suit,
not"ithstanding its capacity to sue and be sued, he should not be ordered
to effect the refund. This question has not been raised in the court belo",
and, therefore, it cannot be properly raised for the first time on appeal. The
herein petitioner is indulging in legal technicalities and niceties "hich do not
help him any7 for factually, it "as he 9City Treasurer= "hom had insisted
that respondent herein pay the real estate taes, "hich respondent paid
under protest. >aving acted in his official capacity as City Treasurer of
KueHon City, he "ould surely (no" "hat to do, under the circumstances.
!: B!F8 >FDF?F, the decision appealed from is hereby affirmed, "ith
costs against the petitioners.
5A:!6A F6FCTD!C B3 CF:TDA6 4A:LO4?AD# ?F A33F335F:T
A//FA63, &&) 3CDA $1'
G.R. No. L-@-9@, May ,1, 198;
MAN!LA ELECTR!C COM"ANY, petitioner,
vs.
CENTRAL /OAR. OF ASSESSMENT A""EALS, /OAR. OF
ASSESSMENT A""EALS OF /ATANGAS a#$ "RO=!NC!AL
ASSESSOR OF /ATANGAS, respondents.

A<U!NO, J.:
This case is about the imposition of the realty ta on t"o oil storage tan(s
installed in &%G% by 5anila Flectric Company on a lot in 3an /ascual,
4atangas "hich it leased in &%G. from Calte 9/hil.=, !nc. The tan(s are
"ithin the Calte refinery compound. They have a total capacity of AGG,000
barrels. They are used for storing fuel oil for 5eralco+s po"er plants.
According to 5eralco, the storage tan(s are made of steel plates "elded
and assembled on the spot. Their bottoms rest on a foundation consisting
of compacted earth as the outermost layer, a sand pad as the intermediate
layer and a t"o-inch thic( bituminous asphalt stratum as the top layer. The
bottom of each tan( is in contact "ith the asphalt layer,
The steel sides of the tan( are directly supported underneath by a circular
"all made of concrete, eighteen inches thic(, to prevent the tan( from
sliding. >ence, according to 5eralco, the tan( is not attached to its
foundation. !t is not anchored or "elded to the concrete circular "all. !ts
bottom plate is not attached to any part of the foundation by bolts, scre"s
or similar devices. The tan( merely sits on its foundation. Fach empty tan(
can be floated by flooding its di(e-inclosed location "ith "ater four feet
deep. 9pp. $%-'0, Dollo.=
?n the other hand, according to the hearing commissioners of the Central
4oard of Assessment Appeals, the area "here the t"o tan(s are located is
enclosed "ith earthen di(es "ith electric steel poles on top thereof and is
divided into t"o parts as the site of each tan(. The foundation of the tan(s
is elevated from the remaining area. ?n both sides of the earthen di(es are
t"o separate concrete steps leading to the foundation of each tan(.
Tan( :o. $ is supported by a concrete foundation "ith an asphalt lining
about an inch thic(. /ipelines "ere installed on the sides of each tan( and
are connected to the pipelines of the 5anila Fnterprises !ndustrial
Corporation "hose buildings and pumping station are near Tan( :o. $.
The 4oard concludes that "hile the tan(s rest or sit on their foundation, the
foundation itself and the "alls, di(es and steps, "hich are integral parts of
the tan(s, are affied to the land "hile the pipelines are attached to the
tan(s. 9pp. G0-G&, Dollo.= !n &%10, the municipal treasurer of 4auan,
4atangas, on the basis of an assessment made by the provincial assessor,
required 5eralco to pay realty taes on the t"o tan(s. For the five-year
period from &%10 to &%1), the ta and penalties amounted to /)'&,10'.%G
9p. $1, Dollo=. The 4oard required 5eralco to pay the ta and penalties as a
condition for entertaining its appeal from the adverse decision of the
4atangas board of assessment appeals.
The Central 4oard of Assessment Appeals 9composed of Acting 3ecretary
of Finance /edro 5. AlmanHor as chairman and 3ecretary of *ustice
Bicente Abad 3antos and 3ecretary of 6ocal @overnment and Community
#evelopment *ose Doo as members= in its decision dated :ovember A,
&%1G ruled that the tan(s together "ith the foundation, "alls, di(es, steps,
pipelines and other appurtenances constitute taable improvements.
5eralco received a copy of that decision on February $., &%11. ?n the
fifteenth day, it filed a motion for reconsideration "hich the 4oard denied in
its resolution of :ovember $A, &%11, a copy of "hich "as received by
5eralco on February $., &%1..
?n 5arch &A, &%1., 5eralco filed this special civil action of certiorari to
annul the 4oard+s decision and resolution. !t contends that the 4oard acted
"ithout -urisdiction and committed a grave error of la" in holding that its
storage tan(s are taable real property.
5eralco contends that the said oil storage tan(s do not fall "ithin any of the
(inds of real property enumerated in article )&A of the Civil Code and,
therefore, they cannot be categoriHed as realty by nature, by incorporation,
by destination nor by analogy. 3tress is laid on the fact that the tan(s are
not attached to the land and that they "ere placed on leased land, not on
the land o"ned by 5eralco.
This is one of those highly controversial, borderline or penumbral cases on
the classification of property "here strong divergent opinions are inevitable.
The issue raised by 5eralco has to be resolved in the light of the provisions
of the Assessment 6a", Common"ealth Act :o. )10, and the Deal
/roperty Ta Code, /residential #ecree :o. )G) "hich too( effect on *une
&, &%1).
3ection $ of the Assessment 6a" provides that the realty ta is due "on real
property, including land, buildings, machinery, and other improvements" not
specifically eempted in section ' thereof. This provision is reproduced "ith
some modification in the Deal /roperty Ta Code "hich provides2
3ec. '.. Inidene of Real -roperty Ta;. J They shall be
levied, assessed and collected in all provinces, cities and
municipalities an annual ad valorem ta; on real property, such
as land, buildings, machinery and other improvements affied
or attached to real property not hereinafter specifically
eempted.
The Code contains the follo"ing definition in its section '2
(= Improvements J is a valuable addition made to property or
an amelioration in its condition, amounting to more than mere
repairs or replacement of "aste, costing labor or capital and
intended to enhance its value, beauty or utility or to adapt it for
ne" or further purposes.
8e hold that "hile the t"o storage tan(s are not embedded in the land,
they may, nevertheless, be considered as improvements on the land,
enhancing its utility and rendering it useful to the oil industry. !t is
undeniable that the t"o tan(s have been installed "ith some degree of
permanence as receptacles for the considerable quantities of oil needed by
5eralco for its operations.
?il storage tan(s "ere held to be taable realty in 3tandard ?il Co. of :e"
*ersey vs. Atlantic City, &A Atl. $nd $1&.
For purposes of taation, the term "real property" may include things "hich
should generally be regarded as personal property9.) C.*.3. &1&, :ote .=.
!t is a familiar phenomenon to see things classed as real property for
purposes of taation "hich on general principle might be considered
personal property 93tandard ?il Co. of :e" Eor( vs. *aramillo, )) /hil. G'0,
G''=.
The case of 4oard of Assessment Appeals vs. 5anila Flectric Company,
&&% /hil. '$., "herein 5eralco+s steel to"ers "ere held not to be sub-ect to
realty ta, is not in point because in that case the steel to"ers "ere
regarded as poles and under its franchise 5eralco+s poles are eempt from
taation. 5oreover, the steel to"ers "ere not attached to any land or
building. They "ere removable from their metal frames.
:or is there any parallelism bet"een this case and 5indanao 4us Co. vs.
City Assessor, &&G /hil. A0&, "here the tools and equipment in the repair,
carpentry and blac(smith shops of a transportation company "ere held not
sub-ect to realty ta because they "ere personal property.
8>FDFF?DF, the petition is dismissed. The 4oard+s questioned decision
and resolution are affirmed. :o costs.
3? ?D#FDF#.
3!4A6 B BA6#FC, A0 />!6 A&$
G.R. No. L-;6;-8 Au)u*+ @, 19;-
LEON S!/AL , plaintiff-appellant,
vs.
EM!L!ANO %. =AL.E4 ET AL., defendants.
EM!L!ANO %. =AL.E4, appellee.
(. :. Blano for appellant.
Feli; B. Bautista and Santos and Benite, for appellee.
%ONSON, J.:
The action "as commenced in the Court of First !nstance of the /rovince of
Tarlac on the &)th day of #ecember &%$). The facts are about as
conflicting as it is possible for facts to be, in the trial causes.
As a first cause of action the plaintiff alleged that the defendant Bitaliano
5ama"al, deputy sheriff of the /rovince of Tarlac, by virtue of a "rit of
eecution issued by the Court of First !nstance of /ampanga, attached and
sold to the defendant Fmiliano *. BaldeH the sugar cane planted by the
plaintiff and his tenants on seven parcels of land described in the complaint
in the third paragraph of the first cause of action7 that "ithin one year from
the date of the attachment and sale the plaintiff offered to redeem said
sugar cane and tendered to the defendant BaldeH the amount sufficient to
cover the price paid by the latter, the interest thereon and any assessments
or taes "hich he may have paid thereon after the purchase, and the
interest corresponding thereto and that BaldeH refused to accept the money
and to return the sugar cane to the plaintiff.
As a second cause of action, the plaintiff alleged that the defendant
Fmiliano *. BaldeH "as attempting to harvest the palay planted in four of
the seven parcels mentioned in the first cause of action7 that he had
harvested and ta(en possession of the palay in one of said seven parcels
and in another parcel described in the second cause of action, amounting
to '00 cavans7 and that all of said palay belonged to the plaintiff.
/laintiff prayed that a "rit of preliminary in-unction be issued against the
defendant Fmiliano *. BaldeH his attorneys and agents, restraining them 9&=
from distributing him in the possession of the parcels of land described in
the complaint7 9$= from ta(ing possession of, or harvesting the sugar cane
in question7 and 9'= from ta(ing possession, or harvesting the palay in said
parcels of land. /laintiff also prayed that a -udgment be rendered in his
favor and against the defendants ordering them to consent to the
redemption of the sugar cane in question, and that the defendant BaldeH be
condemned to pay to the plaintiff the sum of /&,0AG the value of palay
harvested by him in the t"o parcels above-mentioned ,"ith interest and
costs.
?n #ecember $1, &%$), the court, after hearing both parties and upon
approval of the bond for /G,000 filed by the plaintiff, issued the "rit of
preliminary in-unction prayed for in the complaint.
The defendant Fmiliano *. BaldeH, in his amended ans"er, denied
generally and specifically each and every allegation of the complaint and
step up the follo"ing defenses2
9a= That the sugar cane in question had the nature of personal
property and "as not, therefore, sub-ect to redemption7
9b= That he "as the o"ner of parcels &, $ and 1 described in the first
cause of action of the complaint7
9= That he "as the o"ner of the palay in parcels &, $ and 17 and
9d= That he never attempted to harvest the palay in parcels ) and A.
The defendant Fmiliano *. BaldeH by "ay of counterclaim, alleged that by
reason of the preliminary in-unction he "as unable to gather the sugar
cane, sugar-cane shoots 9puntas de ana dule= palay in said parcels of
land, representing a loss to him of /.,'1A.$0 and that, in addition thereto,
he suffered damages amounting to /',)A..AG. >e prayed, for a -udgment
9&= absolving him from all liability under the complaint7 9$= declaring him to
be the absolute o"ner of the sugar cane in question and of the palay in
parcels &, $ and 17 and 9'= ordering the plaintiff to pay to him the sum of
/&&,.''.1G, representing the value of the sugar cane and palay in
question, including damages.
,pon the issues thus presented by the pleadings the cause "as brought on
for trial. After hearing the evidence, and on April $., &%$G, the >onorable
Cayetano 6u(ban, -udge, rendered a -udgment against the plaintiff and in
favor of the defendants J
9&= >olding that the sugar cane in question "as personal property
and, as such, "as not sub-ect to redemption7
9$= Absolving the defendants from all liability under the complaint7 and
9'= Condemning the plaintiff and his sureties Cenon de la CruH, *uan
3angalang and 5arcos 3ibal to -ointly and severally pay to the
defendant Fmiliano *. BaldeH the sum of /%,)'%.0. as follo"s2
9a= /G,1A1.)0, the value of the sugar cane7
9b= &,)'A.G., the value of the sugar-cane shoots7
9c= G)G.00, the value of palay harvested by plaintiff7
9d= G00.00, the value of &A0 cavans of palay "hich the
defendant "as not able to raise by reason of the in-unction, at
/) cavan. %,)'%.0. From that -udgment the plaintiff appealed
and in his assignments of error contends that the lo"er court
erred2 9&= !n holding that the sugar cane in question "as
personal property and, therefore, not sub-ect to redemption7
9$= !n holding that parcels & and $ of the complaint belonged to
BaldeH, as "ell as parcels 1 and ., and that the palay therein "as
planted by BaldeH7
9'= !n holding that BaldeH, by reason of the preliminary in-unction
failed to realiHed /G,1A1.)0 from the sugar cane and /&,)'A.G. from
sugar-cane shoots 9puntas de cana dulce=7
9)= !n holding that, for failure of plaintiff to gather the sugar cane on
time, the defendant "as unable to raise palay on the land, "hich
"ould have netted him the sum of /G007 and.
9A= !n condemning the plaintiff and his sureties to pay to the
defendant the sum of /%,)'%.0..
!t appears from the record2
9&= That on 5ay &&, &%$', the deputy sheriff of the /rovince of Tarlac,
by virtue of "rit of eecution in civil case :o. $0$0' of the Court of
First !nstance of 5anila 95acondray I Co., !nc. vs. 6eon 3ibal=,levied
an attachment on eight parcels of land belonging to said 6eon 3ibal,
situated in the /rovince of Tarlac, designated in the second of
attachment as parcels &, $, ', ), A, G, 1 and . 9Fhibit 4, Fhibit $-A=.
9$= That on *uly '0, &%$', 5acondray I Co., !nc., bought said eight
parcels of land, at the auction held by the sheriff of the /rovince of
Tarlac, for the sum to /),$1'.%', having paid for the said parcels
separately as follo"s 9Fhibit C, and $-A=2
/arcel
& ..................................................................... /&.00
$ ..................................................................... $,000.00
' ..................................................................... &$0.%'
) ..................................................................... &,000.00
A ..................................................................... &.00
G ..................................................................... &.00
1 "ith the house thereon .......................... &A0.00
. ..................................................................... &,000.00
PPPPPPPPPP
),$1'.%'
9'= That "ithin one year from the sale of said parcel of land, and on
the $)th day of 3eptember, &%$', the -udgment debtor, 6eon 3ibal,
paid /$,000 to 5acondray I Co., !nc., for the account of the
redemption price of said parcels of land, "ithout specifying the
particular parcels to "hich said amount "as to applied. The
redemption price said eight parcels "as reduced, by virtue of said
transaction, to /$,A1%.%1 including interest 9Fhibit C and $=.
The record further sho"s2
9&= That on April $%, &%$), the defendant Bitaliano 5ama"al, deputy
sheriff of the /rovince of Tarlac, by virtue of a "rit of eecution in civil
case :o. &'0& of the /rovince of /ampanga 9Fmiliano *.
BaldeH vs.6eon 3ibal &.Q J the same parties in the present case=,
attached the personal property of said 6eon 3ibal located in Tarlac,
among "hich "as included the sugar cane no" in question in the
seven parcels of land described in the complaint 9Fhibit A=.
9$= That on 5ay % and &0, &%$), said deputy sheriff sold at public
auction said personal properties of 6eon 3ibal, including the sugar
cane in question to Fmilio *. BaldeH, "ho paid therefor the sum of
/&,AA0, of "hich /G00 "as for the sugar cane 9Fhibit A=.
9'= That on April $%,&%$), said deputy sheriff, by virtue of said "rit of
eecution, also attached the real property of said 6eon 3ibal in Tarlac,
including all of his rights, interest and participation therein, "hich real
property consisted of eleven parcels of land and a house and camarin
situated in one of said parcels 9Fhibit A=.
9)= That on *une $A, &%$), eight of said eleven parcels, including the
house and the camarin, "ere bought by Fmilio *. BaldeH at the
auction held by the sheriff for the sum of /&$,$00. 3aid eight parcels
"ere designated in the certificate of sale as parcels &, ', ), A, G, 1, &0
and &&. The house and camarin "ere situated on parcel 1 9Fhibit A=.
9A= That the remaining three parcels, indicated in the certificate of the
sheriff as parcels $, &$, and &', "ere released from the attachment
by virtue of claims presented by Agustin Cuyugan and #omiciano
TiHon 9Fhibit A=.
9G= That on the same date, *une $A, &%$), 5acondray I Co. sold and
conveyed to Fmilio *. BaldeH for /$,A1%.%1 all of its rights and
interest in the eight parcels of land acquired by it at public auction
held by the deputy sheriff of Tarlac in connection "ith civil case :o.
$0$0' of the Court of First !nstance of 5anila, as stated above. 3aid
amount represented the unpaid balance of the redemption price of
said eight parcels, after payment by 6eon 3ibal of /$,000 on
3eptember $), &%$', fro the account of the redemption price, as
stated above. 9Fhibit C and $=.
The foregoing statement of facts sho"s2
9&= The Fmilio *. BaldeH bought the sugar cane in question, located in
the seven parcels of land described in the first cause of action of the
complaint at public auction on 5ay % and &0, &%$), for /G00.
9$= That on *uly '0, &%$', 5acondray I Co. became the o"ner of
eight parcels of land situated in the /rovince of Tarlac belonging to
6eon 3ibal and that on 3eptember $), &%$', 6eon 3ibal paid to
5acondray I Co. /$,000 for the account of the redemption price of
said parcels.
9'= That on *une $A, &%$), Fmilio *. BaldeH acquired from 5acondray
I Co. all of its rights and interest in the said eight parcels of land.
9)= That on *une $A, &%$), Fmilio *. BaldeH also acquired all of the
rights and interest "hich 6eon 3ibal had or might have had on said
eight parcels by virtue of the /$,000 paid by the latter to 5acondray.
9A= That Fmilio *. BaldeH became the absolute o"ner of said eight
parcels of land.
The first question raised by the appeal is, "hether the sugar cane in
question is personal or real property. !t is contended that sugar cane comes
under the classification of real property as "ungathered products" in
paragraph $ of article '') of the Civil Code. 3aid paragraph $ of article '')
enumerates as real property the follo"ing2 Trees, plants, and ungathered
products, "hile they are anneed to the land or form an integral part of any
immovable property." That article, ho"ever, has received in recent years an
interpretation by the Tribunal Supremo de :spa4a, "hich holds that, under
certain conditions, gro"ing crops may be considered as personal property.
9#ecision of 5arch &., &%0), vol. %1, Civil *urisprudence of 3pain.=
5anresa, the eminent commentator of the 3panish Civil Code, in
discussing section '') of the Civil Code, in vie" of the recent decisions of
the supreme Court of 3pain, admits that gro"ing crops are sometimes
considered and treated as personal property. >e says2
:o creemos, sin embargo, que esto ecluya la ecepcionque muchos
autores hacen tocante a la venta de toda cosecha o de parte de ella
cuando aun no esta cogida 9cosa frecuente con la uvay y la naran-a=,
y a la de lenas, considerando ambas como muebles. Fl Tribunal
3upremo, en sentencia de &. de marHo de &%0), al entender sobre
un contrato de arrendamiento de un predio rustico, resuelve que su
terminacion por desahucio no etingue los derechos del arrendario,
para recolectar o percibir los frutos correspondientes al ao agricola,
dentro del que nacieron aquellos derechos, cuando el arrendor ha
percibido a su veH el importe de la renta integra correspondiente, aun
cuando lo haya sido por precepto legal durante el curso del -uicio,
fundandose para ello, no solo en que de otra suerte se daria al
desahucio un alcance que no tiene, sino en que, y esto es lo
interesante a nuestro proposito, la onsideraion de inmuebles &ue
el artiulo <<= del Codi#o Civil atribu#e a los frutos pendientes, no
les priva del arater de produtos perteneientes, omo tales, a
&uienes a ellos ten#a dereho, !legado el momento de su
recoleccion.

5as actualmente y por virtud de la nueva edicion de la 6ey
>ipotecaria, publicada en &G de diciembre de &%0%, con las reformas
introducidas por la de $& de abril anterior, la hipoteca, salvo pacto
epreso que disponga lo contrario, y cualquiera que sea la naturaleHa
y forma de la obligacion que garantice, no omprende los
frutos cualquiera que sea la situacion en que se encuentre. 9'
5anresa, A. edicion, pags. $$, $'.=
From the foregoing it appears 9&= that, under 3panish authorities, pending
fruits and ungathered products may be sold and transferred as personal
property7 9$= that the 3upreme Court of 3pain, in a case of e-ectment of a
lessee of an agricultural land, held that the lessee "as entitled to gather the
products corresponding to the agricultural year, because said fruits did not
go "ith the land but belonged separately to the lessee7 and 9'= that under
the 3panish 5ortgage 6a" of &%0%, as amended, the mortgage of a piece
of land does not include the fruits and products eisting thereon, unless the
contract epressly provides other"ise.
An eamination of the decisions of the 3upreme Court of 6ouisiana may
give us some light on the question "hich "e are discussing. Article )GA of
the Civil Code of 6ouisiana, "hich corresponds to paragraph $ of article
'') of our Civil Code, provides2 "3tanding crops and the fruits of trees not
gathered, and trees before they are cut do"n, are li(e"ise immovable, and
are considered as part of the land to "hich they are attached."
The 3upreme Court of 6ouisiana having occasion to interpret that
provision, held that in some cases "standing crops" may be considered and
dealt "ith as personal property. !n the case of Lumber Co. vs. Sheriff and
Ta; Colletor 9&0G 6a., )&.= the 3upreme Court said2 "True, by article )GA
of the Civil Code it is provided that +standing crops and the fruits of trees
not gathered and trees before they are cut do"n . . . are considered as part
of the land to "hich they are attached, but the immovability provided for is
only one in abstracto and "ithout reference to rights on or to the crop
acquired by others than the o"ners of the property to "hich the crop is
attached. . . . The eistence of a right on the gro"ing crop is a mobiliHation
by anticipation, a gathering as it "ere in advance, rendering the crop
movable quoad the right acquired therein. ?ur -urisprudence recogniHes
the possible mobiliHation of the gro"ing crop." 9CitiHens+ 4an( vs. 8iltH, '&
6a. Ann., $))7 /orche vs. 4odin, $. 6a., Ann., 1G&7 3andel vs. #ouglass,
$1 6a. Ann., G$%7 6e"is vs. LlotH, '% 6a. Ann., $G1.=
"!t is true," as the 3upreme Court of 6ouisiana said in the case of -orhe
vs. Bodin 9$. 6a. An., 1G&= that "article )GA of the Devised Code says that
standing crops are considered as immovable and as part of the land to
"hich they are attached, and article )GG declares that the fruits of an
immovable gathered or produced "hile it is under seiHure are considered
as ma(ing part thereof, and incurred to the benefit of the person ma(ing the
seiHure. 4ut the evident meaning of these articles, is "here the crops
belong to the o"ner of the plantation they form part of the immovable, and
"here it is seiHed, the fruits gathered or produced inure to the benefit of the
seiHing creditor.
A crop raised on leased premises in no sense forms part of the
immovable. !t belongs to the lessee, and may be sold by him,
"hether it be gathered or not, and it may be sold by his -udgment
creditors. !f it necessarily forms part of the leased premises the result
"ould be that it could not be sold under eecution separate and apart
from the land. !f a lessee obtain supplies to ma(e his crop, the
factor+s lien "ould not attach to the crop as a separate thing
belonging to his debtor, but the land belonging to the lessor "ould be
affected "ith the recorded privilege. The la" cannot be construed so
as to result in such absurd consequences.
!n the case of Citi,en>s Ban% vs. Wilt, 9'& 6a. Ann., $))=the court said2
!f the crop &uoad the pledge thereof under the act of &.1) "as an
immovable, it "ould be destructive of the very ob-ects of the act, it
"ould render the pledge of the crop ob-ects of the act, it "ould render
the pledge of the crop impossible, for if the crop "as an inseparable
part of the realty possession of the latter "ould be necessary to that
of the former7 but such is not the case. True, by article )GA C. C. it is
provided that "standing crops and the fruits of trees not gathered and
trees before they are cut do"n are li(e"ise immovable and are
considered as part of the land to "hich they are attached7" but the
immovability provided for is only one in abstrato and "ithout
reference to rights on or to the crop acquired by other than the
o"ners of the property to "hich the crop "as attached. The
immovability of a gro"ing crop is in the order of things temporary, for
the crop passes from the state of a gro"ing to that of a gathered one,
from an immovable to a movable. The eistence of a right on the
gro"ing crop is a mobiliHation by anticipation, a gathering as it "ere
in advance, rendering the crop movable &uoad the right acquired
thereon. The provision of our Code is identical "ith the :apoleon
Code A$0, and "e may therefore obtain light by an eamination of the
-urisprudence of France.
The rule above announced, not only by the Tribunal Supremo de
:spa4a but by the 3upreme Court of 6ouisiana, is follo"ed in practically
every state of the ,nion.
From an eamination of the reports and codes of the 3tate of California and
other states "e find that the settle doctrine follo"ed in said states in
connection "ith the attachment of property and eecution of -udgment is,
that gro"ing crops raised by yearly labor and cultivation are considered
personal property. 9G CorpuH *uris, p. &%17 &1 Corpus *uris, p. '1%7 $'
Corpus *uris, p. '$%2 Daventas vs. @reen, A1 Cal., $A)7 :orris vs. 8atson,
AA Am. #ec., &G&7 8hipple vs. Foot, ' Am. #ec., ))$7 & 4en-amin on 3ales,
sec. &$G7 5cLenHie vs. 6ampley, '& Ala., A$G7 Crine vs. Tifts and Co., GA
@a., G))7 @illitt vs. Trua, $1 5inn., A$.7 /reston vs. Dyan, )A 5ich., &1)7
Freeman on Fecution, vol. &, p. )'.7 #ra(e on Attachment, sec. $)%7
5echem on 3ales, sec. $00 and 1G'.=
5r. 5echem says that a valid sale may be made of a thing, "hich though
not yet actually in eistence, is reasonably certain to come into eistence
as the natural increment or usual incident of something already in
eistence, and then belonging to the vendor, and then title "ill vest in the
buyer the moment the thing comes into eistence. 9Fmerson vs. Furopean
Dail"ay Co., G1 5e., '.17 Cutting vs. /ac(ers Fchange, $& Am. 3t. Dep.,
G'.= Things of this nature are said to have a potential eistence. A man may
sell property of "hich he is potentially and not actually possessed. >e may
ma(e a valid sale of the "ine that a vineyard is epected to produce7 or the
gain a field may gro" in a given time7 or the mil( a co" may yield during
the coming year7 or the "ool that shall thereafter gro" upon sheep7 or "hat
may be ta(en at the net cast of a fisherman+s net7 or fruits to gro"7 or
young animals not yet in eistence7 or the good "ill of a trade and the li(e.
The thing sold, ho"ever, must be specific and identified. They must be also
o"ned at the time by the vendor. 9>ull vs. >ull, ). Conn., $A0 ;)0 Am.
Dep., &GA<.=
!t is contended on the part of the appellee that paragraph $ of article '') of
the Civil Code has been modified by section )A0 of the Code of Civil
/rocedure as "ell as by Act :o. &A0., the Chattel 5ortgage 6a". 3aid
section )A0 enumerates the property of a -udgment debtor "hich may be
sub-ected to eecution. The pertinent portion of said section reads as
follo"s2 "All goods, chattels, moneys, and other property, both real and
personal, R R R shall be liable to eecution. 3aid section )A0 and most of the
other sections of the Code of Civil /rocedure relating to the eecution of
-udgment "ere ta(en from the Code of Civil /rocedure of California. The
3upreme Court of California, under section G.. of the Code of Civil
/rocedure of that state 9/omeroy, p. )$)= has held, "ithout variation, that
gro"ing crops "ere personal property and sub-ect to eecution.
Act :o. &A0., the Chattel 5ortgage 6a", fully recogniHed that gro"ing
crops are personal property. 3ection $ of said Act provides2 "All personal
property shall be sub-ect to mortgage, agreeably to the provisions of this
Act, and a mortgage eecuted in pursuance thereof shall be termed a
chattel mortgage." 3ection 1 in part provides2 "!f gro"ing crops be
mortgaged the mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and protect the crop
"hile gro"ing.
!t is clear from the foregoing provisions that Act :o. &A0. "as enacted on
the assumption that "gro"ing crops" are personal property. This
consideration tends to support the conclusion hereinbefore stated, that
paragraph $ of article '') of the Civil Code has been modified by section
)A0 of Act :o. &%0 and by Act :o. &A0. in the sense that "ungathered
products" as mentioned in said article of the Civil Code have the nature of
personal property. !n other "ords, the phrase "personal property" should be
understood to include "ungathered products."
At common la", and generally in the ,nited 3tates, all annual crops
"hich are raised by yearly manurance and labor, and essentially o"e
their annual eistence to cultivation by man, . may be levied on as
personal property." 9$' C. *., p. '$%.= ?n this question Freeman, in
his treatise on the 6a" of Fecutions, says2 "Crops, "hether gro"ing
or standing in the field ready to be harvested, are, "hen produced by
annual cultivation, no part of the realty. They are, therefore, liable to
voluntary transfer as chattels. !t is equally "ell settled that they may
be seiHed and sold under eecution. 9Freeman on Fecutions, vol. p.
)'..=
8e may, therefore, conclude that paragraph $ of article '') of the Civil
Code has been modified by section )A0 of the Code of Civil /rocedure and
by Act :o. &A0., in the sense that, for the purpose of attachment and
eecution, and for the purposes of the Chattel 5ortgage 6a", "ungathered
products" have the nature of personal property. The lo"er court, therefore,
committed no error in holding that the sugar cane in question "as personal
property and, as such, "as not sub-ect to redemption.
All the other assignments of error made by the appellant, as above stated,
relate to questions of fact only. 4efore entering upon a discussion of said
assignments of error, "e deem it opportune to ta(e special notice of the
failure of the plaintiff to appear at the trial during the presentation of
evidence by the defendant. >is absence from the trial and his failure to
cross-eamine the defendant have lent considerable "eight to the evidence
then presented for the defense.
Coming not to the o"nership of parcels & and $ described in the first cause
of action of the complaint, the plaintiff made a futile attempt to sho" that
said t"o parcels belonged to Agustin Cuyugan and "ere the identical
parcel $ "hich "as ecluded from the attachment and sale of real property
of 3ibal to BaldeH on *une $A, &%$), as stated above. A comparison of the
description of parcel $ in the certificate of sale by the sheriff 9Fhibit A= and
the description of parcels & and $ of the complaint "ill readily sho" that
they are not the same.
The description of the parcels in the complaint is as follo"s2
&. 6a caa dulce sembrada por los inquilinos del e-ecutado 6eon
3ibal &.Q en una parcela de terreno de la pertenencia del citado
e-ecutado, situada en 6ibutad, Culubasa, 4amban, Tarlac, de unas
dos hectareas poco mas o menos de superficie.
$. 6a caa dulce sembrada por el inquilino del e-ecutado 6eon 3ibal
&.Q, !lamado Ale-andro /olicarpio, en una parcela de terreno de la
pertenencia del e-ecutado, situada en #alayap, Culubasa, 4amban,
Tarlac de unas dos hectareas de superficie poco mas o menos." The
description of parcel $ given in the certificate of sale 9Fhibit A= is as
follo"s2
$a. Terreno palayero situado en Culubasa, 4amban, Tarlac, de
&11,0%0 metros cuadrados de superficie, linda al :. con Canuto
3ibal, Fsteban 6aHatin and Ale-andro #ayrit7 al F. con Francisco
#iHon, Felipe 5au and others7 al 3. con Ale-andro #ayrit, !sidro
3antos and 5elecio 5au7 y al ?. con Ale-andro #ayrit and /aulino
Bergara. Ta :o. $.A), vador amillarado /),$00 pesos.
?n the other hand the evidence for the defendant purported to sho" that
parcels & and $ of the complaint "ere included among the parcels bought
by BaldeH from 5acondray on *une $A, &%$), and corresponded to parcel )
in the deed of sale 9Fhibit 4 and $=, and "ere also included among the
parcels bought by BaldeH at the auction of the real property of 6eon 3ibal
on *une $A, &%$), and corresponded to parcel ' in the certificate of sale
made by the sheriff 9Fhibit A=. The description of parcel ) 9Fhibit $= and
parcel ' 9Fhibit A= is as follo"s2
-arels 3o. =. J Terreno palayero, ubicado en el barrio de
Culubasa,4amban, Tarlac, !. F. de &)A,000 metros cuadrados de
superficie, lindante al :orte con Doad of the barrio of Culubasa that
goes to Concepcion7 al Fste con *uan #iHon7 al 3ur con 6ucio 5ao
y Canuto 3ibal y al ?este con Fsteban 6aHatin, su valor amillarado
asciende a la suma de /$,%%0. Ta :o. $.AG.
As "ill be noticed, there is hardly any relation bet"een parcels & and $ of
the complaint and parcel ) 9Fhibit $ and 4= and parcel ' 9Fhibit A=. 4ut,
inasmuch as the plaintiff did not care to appear at the trial "hen the
defendant offered his evidence, "e are inclined to give more "eight to the
evidence adduced by him that to the evidence adduced by the plaintiff, "ith
respect to the o"nership of parcels & and $ of the compliant. 8e, therefore,
conclude that parcels & and $ of the complaint belong to the defendant,
having acquired the same from 5acondray I Co. on *une $A, &%$), and
from the plaintiff 6eon 3ibal on the same date.
!t appears, ho"ever, that the plaintiff planted the palay in said parcels and
harvested therefrom &%0 cavans. There being no evidence of bad faith on
his part, he is therefore entitled to one-half of the crop, or %A cavans. >e
should therefore be condemned to pay to the defendant for %A cavans only,
at /'.)0 a cavan, or the sum of /'$', and not for the total of &%0 cavans
as held by the lo"er court.
As to the o"nership of parcel 1 of the complaint, the evidence sho"s that
said parcel corresponds to parcel & of the deed of sale of 5acondray I Co,
to BaldeH 9Fhibit 4 and $=, and to parcel ) in the certificate of sale to
BaldeH of real property belonging to 3ibal, eecuted by the sheriff as above
stated 9Fhibit A=. BaldeH is therefore the absolute o"ner of said parcel,
having acquired the interest of both 5acondray and 3ibal in said parcel.
8ith reference to the parcel of land in /acalcal, Tarlac, described in
paragraph ' of the second cause of action, it appears from the testimony of
the plaintiff himself that said parcel corresponds to parcel . of the deed of
sale of 5acondray to BaldeH 9Fhibit 4 and $= and to parcel &0 in the deed
of sale eecuted by the sheriff in favor of BaldeH 9Fhibit A=. BaldeH is
therefore the absolute o"ner of said parcel, having acquired the interest of
both 5acondray and 3ibal therein.
!n this connection the follo"ing facts are "orthy of mention2
Fecution in favor of 5acondray I Co., 5ay &&, &%$'. Fight parcels of land
"ere attached under said eecution. 3aid parcels of land "ere sold to
5acondray I Co. on the '0th day of *uly, &%$'. Dice paid /),$1'.%'. ?n
3eptember $), &%$', 6eon 3ibal paid to 5acondray I Co. /$,000 on the
redemption of said parcels of land. 93ee Fhibits 4 and C =.
Attachment, April $%, &%$), in favor of BaldeH. /ersonal property of 3ibal
"as attached, including the sugar cane in question. 9Fhibit A= The said
personal property so attached, sold at public auction 5ay % and &0, &%$).
April $%, &%$), the real property "as attached under the eecution in favor
of BaldeH 9Fhibit A=. *une $A, &%$), said real property "as sold and
purchased by BaldeH 9Fhibit A=.
*une $A, &%$), 5acondray I Co. sold all of the land "hich they had
purchased at public auction on the '0th day of *uly, &%$', to BaldeH.
As to the loss of the defendant in sugar cane by reason of the in-unction,
the evidence sho"s that the sugar cane in question covered an area of $$
hectares and G0 ares 9Fhibits ., .-b and .-c=7 that said area "ould have
yielded an average crop of &0'% picos and G0 cates7 that one-half of the
quantity, or A&% picos and .0 cates "ould have corresponded to the
defendant, as o"ner7 that during the season the sugar "as selling at /&' a
pico 9Fhibit A and A-A=. Therefore, the defendant, as o"ner, "ould have
netted / G,1A1.)0 from the sugar cane in question. The evidence also
sho"s that the defendant could have ta(en from the sugar cane &,0&1,000
sugar-cane shoots 9puntas de cana= and not &,&10,000 as computed by the
lo"er court. #uring the season the shoots "ere selling at /&.$0 a thousand
9Fhibits G and 1=. The defendant therefore "ould have netted /&,$$0.)0
from sugar-cane shoots and not /&,)'A.G. as allo"ed by the lo"er court.
As to the palay harvested by the plaintiff in parcels & and $ of the
complaint, amounting to &%0 cavans, one-half of said quantity should
belong to the plaintiff, as stated above, and the other half to the defendant.
The court erred in a"arding the "hole crop to the defendant. The plaintiff
should therefore pay the defendant for %A cavans only, at /'.)0 a cavan, or
/'$' instead of /G)G as allo"ed by the lo"er court.
The evidence also sho"s that the defendant "as prevented by the acts of
the plaintiff from cultivating about &0 hectares of the land involved in the
litigation. >e epected to have raised about G00 cavans of palay, '00
cavans of "hich "ould have corresponded to him as o"ner. The lo"er
court has "isely reduced his share to &A0 cavans only. At /) a cavan, the
palay "ould have netted him /G00.
!n vie" of the foregoing, the -udgment appealed from is hereby modified.
The plaintiff and his sureties Cenon de la CruH, *uan 3angalang and
5arcos 3ibal are hereby ordered to pay to the defendant -ointly and
severally the sum of /.,%00..0, instead of /%,)'%.0. allo"ed by the lo"er
court, as follo"s2
/G,1A1.)0 for the sugar cane7
&,$$0.)0 for the sugar cane shoots7
'$'.00
for the palay harvested by plaintiff in parcels & and
$7
G00.00 for the palay "hich defendant could have raised.
.,%00..0
PPPPPPPPPPPP
!n all other respects, the -udgment appealed from is hereby affirmed, "ith
costs. 3o ordered
,3 B CAD6?3 $& />!6 A)'
,3 vs Carlos
@.D. :o. G$%A, $& /hil A)'3eptember &, &%&&
FACT32
!gnacio Carlos has been a consumer of electricity furnished by the 5anila
Flectric Dailroad and 6ight Company for a building containing theresidence
of the accused and ' other residences. 4elieving that more light is
consumed than "hat is sho"n in the meter installed, the company
installedan additional meter on the pole outside CarlosSs house to compare
the actual consumption. They found out that Carlos used a -umper. Further,
a -umper "as found in a dra"er of a small cabinet in the room of the
defendantSs house "here the meter "as installed. !n the absence of any
eplanation for hispossession of said device, the presumption raised "as
that Carlos "as the o"ner of the device "hose only use "as to deflect the
flo" of electricity,causing loss to the 5eralco of over $000 (ilo"atts of
current. Accused of theft, CarlosSs defense "as that electricity "as an
un(no"n force, not a fluid, and being intangible, could not be the ob-ect of
theft.
!33,F2
8hether the court erred in declaring that electricity can be the ob-ect of
theft.
>F6#2
8hile electric current is not a fluid, still, its manifestations and effects li(e
those of gas may be seen and felt. The true test of "hat may be stolenis
not "hether it is corporeal or incorporeal, but "hether, being possessed of
value, a person other than the o"ner may appropriate the same.
Flectricity,li(e gas, is a valuable merchandise and may thus be stolen. 93ee
also ,.3. v. Tambunting, )& /hil. 'G)=.The court further ruled that electricity,
the same as gas, is a valuable article of merchandise, bought and sold li(e
other personal property and is capableof appropriation by another. !t is also
susceptible of being severed from a mass or larger quantity and of being
transported from place to place. >ence, noerror "as committed by the trial
court in holding that electricity is a sub-ect of larceny
3TD?C>FCLFD B DA5!DFC )) />!6 %''
G.R. No. 185;( Se7+e5ber ;6, 19;;
!N=OLUNTARY !NSOL=ENCY OF "AUL STROCECKER, appellee,
vs.
!L.EFONSO RAM!RE4, creditor and appellant.
&!LL!AM E.MON.S, assignee.
Lim 6 Lim for appellant.
Ross 6 La!rene and "ntonio T. Carrasoso, 'r., for the Fidelity 6 Surety
Co.
ROMUAL.E4, J.:
The question at issue in this appeal is, "hich of the t"o mortgages here in
question must be given preferenceT !s it the one in favor of the Fidelity I
3urety Co., or that in favor of !ldefonso DamireH. The first "as declared by
the trial court to be entitled to preference.
!n the lo"er court there "ere three mortgagees each of "hom claimed
preference. They "ere the t"o above mentioned and Concepcion Ayala.
The latter+s claim "as re-ected by the trial court, and from that ruling she
did not appeal.
There is no question as to the priority in time of the mortgage in favor of the
Fidelity I 3urety Co. "hich "as eecuted on 5arch &0, &%&%, and
registered in due time in the registry of property, that in favor of the
appellant being dated 3eptember $$, &%&%, and registered also in the
registry.
The appellant claims preference on these grounds2 9a= That the first
mortgage above-mentioned is not valid because the property "hich is the
sub-ect-matter thereof is not capable of being mortgaged, and the
description of said property is not sufficient7 and 9b= that the amount due
the appellant is a purchase price, citing article &%$$ of the Civil Code in
support thereof, and that his mortgage is but a modification of the security
given by the debtor on February &A, &%&%, that is, prior to the mortgage
eecuted in favor of the Fidelity I 3urety Co.
As to the first ground, the thing that "as mortgaged to this corporation is
described in the document as follo"s2
. . . his half interest in the drug business (no"n as "nti#ua Botia
Ramire, 9o"ned by 3rta. #olores del Dosario and the mortgagor
herein referred to as the partnership=, located at Calle Deal :os. &$'
and &$A, #istrict of !ntramuros, 5anila, /hilippine !slands.
8ith regard to the nature of the property thus mortgaged, "hich is one-half
interest in the business above described, such interest is a personal
property capable of appropriation and not included in the enumeration of
real properties in article ''A of the Civil Code, and may be the sub-ect of
mortgage. All personal property may be mortgaged. 93ec. $, Act :o. &A0..=
The description contained in the document is sufficient. The la" 9sec. 1, Act
:o. &A0.= requires only a description of the follo"ing nature2
The description of the mortgaged property shall be such as to enable
the parties to the mortgage, or any other person, after reasonable
inquiry and investigation, to identify the same.
Turning to the second error assigned, numbers &, $, and ' of article &%$$ of
the Civil Code invo(ed by the appellant are not applicable. :either he, as
debtor, nor the debtor himself, is in possession of the property mortgaged,
"hich is, and since the registration of the mortgage has been, legally in
possession of the Fidelity I 3urety Co. 93ec. ), Act :o. &A0.7
5eyers vs. Thein, &A /hil., '0'.=
!n no "ay can the mortgage eecuted in favor of the appellant on
3eptember $$, &%&%, be given effect as of February &A, &%&%, the date of
the sale of the drug store in question. ?n the &Ath of February of that year,
there "as a stipulation about a persons security, but not a mortgage upon
any property, and much less upon the property in question.
5oreover, the appellant cannot deny the preferential character of the
mortgage in favor of the Fidelity I 3urety Co. because in the very
document eecuted in his favor it "as stated that his mortgage "as
a seond mortgage, subordinate to the one made in favor of the Fidelity I
3urety Co.
The -udgment appealed from is affirmed "ith costs against the appellant.
3o ordered.
C!TE ?F 4A@,!? B3. :!:?, ).1 3CDA $&
G.R. No. 161811 A7r06 1;, ;((6
TE C!TY OF /AGU!O, MAUR!C!O .OMOGAN, a#$ ORLAN.O
GENO=E, /etitioners,
vs.
FRANC!SCO N!BO, %OSEF!NA N!BO, EMMANUEL N!BO, a#$ EURL!E
OCAM"O, Despondents.
# F C ! 3 ! ? :
CAR"!O MORALES, J.:
The 4ureau of 6ands a"arded on 5ay &', &%GG to :arcisa A. /lacino
9:arcisa= a parcel of land identified as 6ot :o. &0 9the lot= located at 3aint
Anthony Doad, #ominican-5irador 4arangay, 4aguio City.
Francisco :io 9:io=, one of the herein respondents, "ho has been
occupying the lot, contested the a"ard by filing a /etition /rotest on
#ecember $', &%1A before the 4ureau of 6ands.
The #irector of 6ands dismissed the /etition /rotest by ?rder of :ovember
&&, &%1G.
:io appealed the dismissal all the "ay to the 3upreme Court but he did
not succeed.
The decision of the #irector of 6ands dated :ovember &&, &%1G having
become final and eecutory,
&
the then-Fecutive #irector of the #epartment
of Fnvironment and :atural Desources-Cordillera Autonomous Degion
9#F:D-CAD=, on petition of :arcisa, issued an ?rder of Fecution dated
February &, &%%' directing the Community Fnvironment and :atural
Desources ?ffice 9CF:D?= ?fficer to enforce the decision "by ordering
/etitioner :io and those acting in his behalf to refrain from continuously
occupying the area and remove "hatever improvements they may have
introduced thereto."
$
Attempts to enforce the ?rder of Fecution failed, prompting :arcisa to file
a complaint for e-ectment before the 4aguio City 5unicipal Trial Court in
Cities 95TCC=. The 5TCC dismissed :arcisaSs complaint, ho"ever, by
?rder
'
of August 1, &%%G.
:arcisaSs counsel, Atty. Fdilberto Claravall 9Atty. Claravall=, later petitioned
the #F:D-CAD for the issuance of a 3pecial ?rder authoriHing the City
3heriff of 4aguio, the City /olice 3tation, and the #emolition Team of the
City @overnment to demolish or remove the improvements on the lot
introduced by :io. The #F:D-CAD denied the petition, citing lac( of
-urisdiction over the City 3heriff of 4aguio, the City /olice 3tation, and the
#emolition Team of the City @overnment. The #F:D-CAD also invo(ed
3ection &) 9no" 3ection &0 9d== of Dule '% of the Dules of Court.
)
Atty. Claravall thereupon moved to have the ?rder of Fecution previously
issued by the #F:D-CAD amended, "hich "as granted. As amended, the
?rder of Fecution addressed to the CF:D? ?fficer read2
8>FDFF?DF, pursuant to the provisions of 3ection &.)) of the Devised
Administrative Code as amended by Act :o. '011, you are hereby en-oined
to enforce the aforementioned order, "ith the assistance upon request of
the City 3heriff of 4aguio City, the #emolition Team of 4aguio City and the
4aguio City /olice 3tation, by ?rdering /etitioner :io and those acting in
his behalf to refrain from continuously occupying the area andre5oCe
D3a+eCer 057roCe5e#+* +3ey 5ay 3aCe 0#+ro$u2e$ +3ere+o.

3? ?D#FDF#.
A
9Fmphasis and underscoring supplied=
The #F:D-CF:D?, together "ith the #emolition Team of 4aguio City and
the 4aguio City police, desisted, ho"ever, in their earlier attempt to enforce
the Amended ?rder of Fecution.
G
?n *uly &G, &%%1, the #emolition Team of 4aguio City headed by Fngineer
?rlando @enove and the 4aguio City /olice, on orders of then 4aguio City
/olice ?fficer-!n-Charge 9?!C= #onato 4acquian, started demolishing the
houses of :io and his herein co-respondents.
1
The demolition "as, ho"ever, temporarily stopped upon the instructions of
#F:D-CF:D ?fficer @uillermo FianHa, "ho later advised :io that the
#F:D-CF:D? "ould implement the Amended ?rder of Fecution on
August ), &%%1.
.
:io and his "ife *osefina :io thereupon filed a /etition
%
for Certiorari and
/rohibition "ith /rayer for Temporary Destraining ?rder before the
Degional Trial Court 9DTC= of 4aguio City against @uillermo FianHa, Teofilo
?limpo of the #F:D-CF:D?, 5ayor 5auricio #omogan 9hereafter
petitioner=, Atty. Claravall, Fngr. ?rlando @enove 9hereafter petitioner=,
Dolando Angara, and /olice ?fficer #onato 4acquian challenging the
Amended ?rder of Fecution issued by the #F:D-CF:D?.)avvphil.net
The :io spouses later filed an Amended /etition
&0
by impleading
Fmmanuel :io and Furlie ?campo as therein co-petitioners and the City
of 4aguio 9hereafter petitioner= and :arcisa as therein additional
respondents, and further praying for damages.
4ranch G of the 4aguio DTC dismissed the petition of :io et al. 9hereafter
respondents= for lac( of merit.
&&
DespondentsS 5otion for
Deconsideration
&$
having been denied, they filed a /etition for
Devie"
&'
under Dule )$ of the Dules before the Court of Appeals.
4y #ecision
&)
of #ecember &&, $00$, the Court of Appeals granted the
/etition for Devie", holding that 3ec. &09d= of Dule '% of the Dules reading2
3FC. &0. :;eution of 'ud#ments for speifi at.

9d= Removal of improvements on property sub'et of e;eution. J 8hen
the property sub-ect of the eecution contains improvements constructed or
planted by the -udgment obligor or his agent, the officer shall not destroy,
demolish or remove said improvements ecept upon special order of the
court, issued upon motion of the -udgment obligee after due hearing and
after the former has failed to remove the same "ithin a reasonable time
fied by the court. 9,nderscoring supplied=
applies.
Thus disposed the appellate court2
8>FDFF?DF, the instant appeal is hereby @DA:TF# and the ?rders
dated 3eptember $), &%%1 and :ovember $', &%%. are hereby 3FT
A3!#F. /ublic respondent City 5ayor 5auricio #omogan thru the
#emolition Team and City FngineerSs ?ffice are hereby ordered to cease
and desist from enforcing the amended order of eecution issued by ?scar
:. >amada, Degional Fecutive #irector of the #epartment of
Fnvironmental and :atural Desources, concerning the demolition or
removal of the structures made by petitioners until private respondent
applied for a special order abovementioned "ith the proper
court.)avvphil.net
3? ?D#FDF#.
&A
9,nderscoring supplied=
Despondents filed before the appellate court an F-/arte 5otion for
Deconsideration
&G
on *anuary %, $00', alleging that some of the reliefs they
prayed for in their petition "ere left unacted upon.
&1
/etitioners too filed a
5otion for Deconsideration
&.
on *anuary $., $00', raising the follo"ing
grounds2
&. T>F >?:?DA46F C?,DT FA!6F# T? C?:3!#FD T>AT
T>F C!TE 5AE?D >A3 T>F /?8FD T? ?D#FD T>F
#F5?6!T!?: ?F !66F@A66E-4,!6T 3TD,CT,DF37
$. T>F >?:?DA46F C?,DT @DABF6E FDDF# !: @!B!:@ #,F
C?,D3F T? T>F /FT!T!?: F?D DFB!F87
'. T>F >?:?DA46F C?,DT 5!3A//6!F# 3FC. &0 9d=, D,6F '%
of the D,6F3 ?F C?,DT.
&%
9,nderscoring supplied=
!n support of the first ground, petitioners raised before the appellate court,
in their 5otion for Deconsideration, for the first time, the po"er of the City
5ayor to validly order the demolition of a structure constructed "ithout a
building permit pursuant to 3ec. )AA9b= '9vi= of the 6ocal @overnment Code
of &%%& in relation to the :ational 4uilding Code of the /hilippines.
Alleging that respondents built their house "ithout the required entry and
building permits, petitioners argued that the City 5ayor may order the
demolition of a house "ithout a special court order.
$0
The Court of Appeals denied both partiesS motions for reconsideration by
Desolution
$&
of #ecember &1, $00'.
>ence, the present petition of the City of 4aguio, 5ayor #omogan 9no" a
Congressman=, and ?rlando @enove, faulting the appellate court2
&. . . . !: D,6!:@ T>AT A 3/FC!A6 C?,DT ?D#FD !3 :FF#F#
F?D T>F #F5?6!T!?: ?F DF3/?:#F:T3S 3TD,CT,DF37
$. . . . !: A//6E!:@ 3FC. &09d= D,6F '% ?F T>F D,6F3 ?F
C?,DT !: T>!3 CA3F7
'. . . . !: F:TFDTA!:!:@ DF3/?:#F:T3S /FT!T!?: F?D
DFB!F8.
$$
The petition fails.
8hile it is noted that respondentSs appeal to the Court of Appeals "as
erroneously brought under Dule )$ of the Dules of Court, instead of under
Dule )&, the DTC having rendered the questioned decision in the eercise
of its original, not appellate, -urisdiction, this Court overloo(s the error in
vie" of the merits of respondentsS case.
$'
/etitionersS contention that the enforcement of the Amended ?rder of
Fecution does not need a hearing and court order "hich 3ec. &09d= of
Dule '% of the Dules of Court requires does not lie. That an administrative
agency "hich is clothed "ith quasi--udicial functions issued the Amended
?rder of Fecution is of no moment, since the requirement in 3ec. &0 9d= of
Dule '% of the Dules of Court echoes the constitutional provision that "no
person shall be deprived of life, liberty or property "ithout due process of
la", nor shall any person be denied the equal protection of the la"s."
$)
"ntipolo Realty Corporation v. 3ational 2ousin# "uthority teaches2
!n general, the quantum of -udicial or quasi--udicial po"ers "hich an
administrative agency may eercise is defined in the enabling act of such
agency. !n other "ords, the etent to "hich an administrative entity may
eercise such po"ers depends largely, if not "holly, on the provisions of
the statute creating or empo"ering such agency.
$A
9,nderscoring supplied=
There is, ho"ever, no eplicit provision granting the 4ureau of 6ands 9no"
the 6and 5anagement 4ureau= or the #F:D 9"hich eercises control over
the 6and 5anagement 4ureau= the authority to issue an order of
demolition
$G
J "hich the Amended ?rder of Fecution, in substance, is.
!ndeed,
;"<hile the -urisdiction of the 4ureau of 6ands is confined to the
determination of the respective rights of rival claimants to public lands or to
cases "hich involve the disposition of public lands, +3e 7oDer +o
$e+er50#e D3o 3a* +3e a2+ua6, 73y*02a6 7o**e**0o# or o22u7a+0o# or
+3e be++er r0)3+ o1 7o**e**0o# oCer 7ub602 6a#$* re5a0#* D0+3 +3e
2our+*.
The rationale is evident. The 4ureau of 6ands does not have the
"here"ithal to police public lands. :either does it have the means to
prevent disorders or breaches of peace among the occupants. !ts po"er is
clearly limited to disposition and alienation and "hile it may decide disputes
over possession, this is but in aid of ma(ing the proper a"ards. T3e
u6+05a+e 7oDer +o re*o6Ce 2o#1602+* o1 7o**e**0o# 0* re2o)#0Ee$ +o be
D0+30# +3e 6e)a6 2o57e+e#2e o1 +3e 20C06 2our+* a#$ 0+* 7ur7o*e 0* +o
eF+e#$ 7ro+e2+0o# +o +3e a2+ua6 7o**e**or* a#$ o22u7a#+* D0+3 a C0eD
+o Gue66 *o20a6 u#re*+.
$1
9Fmphasis added=
Consequently, this Court held2
$.
+3e 7oDer +o or$er +3e *3er011 +o re5oCe 057roCe5e#+* a#$ +ur#
oCer +3e 7o**e**0o# o1 +3e 6a#$ +o +3e 7ar+y a$Hu$)e$ e#+0+6e$ +3ere+o,
be6o#)* o#6y +o +3e 2our+* o1 Hu*+02e a#$ #o+ +o +3e /ureau o1
La#$*.
$%
9Fmphasis and underscoring supplied=
!n fine, it is the court sheriff "hich is empo"ered to remove improvements
introduced by respondents on, and turn over possession of, the lot to
:arcisa.
/etitionersS invocation of the City 5ayorSs authority under 3ec. )AA9b= '9vi=
of the 6ocal @overnment Code to order the demolition or removal of an
illegally constructed house, building, or structure "ithin the period
prescribed by la" or ordinance and their allegation that respondentsS
structures "ere constructed "ithout building permits
'0
"ere not raised
before the trial court. /etitioners having, for the first time, invo(ed said
section of the 6ocal @overnment Code and respondentsS lac( of building
entry permits in their 5otion for Deconsideration of the Court of AppealsS
decision, it "as correctly denied of merit,
'&
it being settled that matters,
theories or arguments not brought out in the proceedings belo" "ill
ordinarily not be considered by a revie"ing court as they cannot be raised
for the first time on appeal.
'$
&EREFORE, the petition is .!SM!SSE.. The questioned #ecision and
Desolution of the Court of Appeals areAFF!RME..
:o pronouncement as to costs.
SO OR.ERE..
Re7ub602 A2+ No. -1-( %a#uary -, 199;
AN ACT AUTOR!4!NG TE LEGACY OR .ONAT!ON OF ALL OR
"ART OF A UMAN /O.Y AFTER .EAT FOR S"EC!F!E. "UR"OSES
Be it enated by the Senate and 2ouse of Representatives of the
-hilippines in Con#ress assembled?2
Se2+0o# 1. Title. U This Act shall be (no"n as the IOrgan Donation Act of
1991I.
Se2+0o# ;. Definition of Terms. U As used in this Act the follo"ing terms
shall mean2
9a= "9r#an Ban% Stora#e Faility" - a facility licensed, accredited or
approved under the la" for storage of human bodies or parts thereof.
9b= "/eedent" - a deceased individual, and includes a still-born infant
or fetus.
9c= "Testator" - an individual "ho ma(es a legacy of all or part of his
body.
9d= "/onor" - an individual authoriHed under this Act to donate all or
part of the body of a decedent.)a!phil@alf
9e= "2ospital" - a hospital licensed, accredited or approval under the
la", and includes, a hospital operated by the @overnment.
9f= "-art" - includes transplantable organs, tissues, eyes, bones,
arteries, blood, other fluids and other portions of the human body.
9g= "-erson" - an individual, corporation, estate, trust, partnership,
association, the @overnment or any of its subdivisions, agencies or
instrumentalities, including government-o"ned or -controlled
corporations7 or any other legal entity.
9h= "-hysiianA or ASur#eon" - a physician or surgeon licensed or
authoriHed to practice medicine under the la"s of the Depublic of the
/hilippines.
9i= "Immediate Family" of the decedent - the persons enumerated in
3ection )9a= of this Act.
9-= "/eath" - the irreversible cessation of circulatory and respiratory
functions or the irreversible cessation of all functions of the entire
brain, including the brain stem. A person shall be medically and
legally dead if either2)a!phil@alf
9&= !n the opinion of the attending physician, based on the
acceptable standards of medical practice, there is an absence
of natural respiratory and cardiac functions and, attempts at
resuscitation "ould not be successful in restoring those
functions. !n this case, death shall be deemed to have occurred
at the time these functions ceased7 or
9$= !n the opinion of the consulting physician, concurred in by
the attending physician, that on the basis of acceptable
standards of medical practice, there is an irreversible cessation
of all brain functions7 and considering the absence of such
functions, further attempts at resuscitation or continued
supportive maintenance "ould not be successful in resorting
such natural functions. !n this case, death shall be deemed to
have occurred at the time "hen these conditions first appeared.
The death of the person shall be determined in accordance "ith the
acceptable standards of medical practice and shall be diagnosed
separately by the attending physician and another consulting physician,
both of "hom must be appropriately qualified and suitably eperienced in
the care of such parties. The death shall be recorded in the patient+s
medical record.
Se2+0o# ,. Person Who May Execte A !egacy. U Any individual, at least
eighteen 9&.= years of age and of sound mind, may give by "ay of legacy,
to ta(e effect after his death, all or part of his body for any purpose
specified in 3ection G hereof.
Se2+0o# @. Person Who May Execte a Donation. U
9a= Any of the follo"ing, person, in the order of property stated
hereunder, in the absence of actual notice of contrary intentions by
the decedent or actual notice of opposition by a member of the
immediate family of the decedent, may donate all or any part of the
decedent+s body for any purpose specified in 3ection G hereof2
9&= 3pouse7
9$= 3on or daughter of legal age7
9'= Fither parent7
9)= 4rother or sister of legal age7 or
9A= @uardian over the person of the decedent at the time of his
death.
9b= The persons authoriHed by sub-section 9a= of this 3ection may
ma(e the donation after or immediately before death.
Se2+0o# 5. Examination of "man #o$y or Part Thereof . U A legacy of
donation of all or part of a human body authoriHes any eamination
necessary to assure medical acceptability of the legacy or donation for the
purpose9s= intended.
For purposes of this Act, an autopsy shall be conducted on the cadaver of
accident, trauma, or other medico-legal cases immediately after the
pronouncement of death, to determine qualified and healthy human organs
for transplantation andOor in furtherance of medical science.
Se2+0o# 6. Persons Who May #ecome !egatees or Donees. U The
follo"ing persons may become legatees or donees of human bodies or
parts thereof for any of the purposes stated hereunder2
9a= Any hospital, physician or surgeon - For medical or dental
education, research, advancement of medical or dental science,
therapy or transplantation7
9b= Any accredited medical or dental school, college or university -
For education, research, advancement of medical or dental science,
or therapy7
9c= Any organ ban( storage facility - For medical or dental education,
research, therapy, or transplantation7 and
9d= Any specified individual - For therapy or transplantation needed by
him.
Se2+0o# -. Dty of "os%itals. U A hospital authoriHed to receive organ
donations or to conduct transplantation shall train qualified personnel and
their staff to handle the tas( of introducing the organ donation program in a
humane and delicate manner to the relatives of the donor-decedent
enumerated in 3ection ) hereof. The hospital shall accomplish the
necessary form or document as proof of compliance "ith the above
requirement.
Se2+0o# 8. Manner of Execting a !egacy. U
9a= 6egacy of all or part of the human body under 3ection ' hereof
may be made by "ill. The legacy becomes effective upon the death
of the testator "ithout "aiting for probate of the "ill. !f the "ill is not
probated, or if it is declared invalid for testamentary purposes, the
legacy, to the etent that it "as eecuted in good faith, is
nevertheless valid and effective.
9b= A legacy of all or part of the human body under 3ection ' hereof
may also be made in any document other than a "ill. The legacy
becomes effective upon death of the testator and shall be respected
by and binding upon his eecutor or administrator, heirs, assigns,
successors-in-interest and all members of the family. The document,
"hich may be a card or any paper designed to be carried on a
person, must be signed by the testator in the presence of t"o
"itnesses "ho must sign the document in his presence. !f the testator
cannot sign, the document may be signed for him at his discretion
and in his presence, in the presence of t"o "itnesses "ho must,
li(e"ise, sign the document in the presence of the testator. #elivery
of the document of legacy during the testator+s lifetime is not
necessary to ma(e the legacy valid.
9c= The legacy may be made to a specified legatee or "ithout
specifying a legatee. !f the legacy is made to a specified legatee "ho
is not available at the time and place of the testator+s death, the
attending physician or surgeon, in the absence of any epressed
indication that the testator desired other"ise, may accept the legacy
as legatee. !f the legacy does not specify a legatee, the legacy may
be accepted by the attending physician or surgeon as legatee upon
or follo"ing the testator+s death. The physician "ho becomes a
legatee under this subsection shall not participate in the procedures
for removing or transplanting a part or parts of the body of the
decedent.
9d= The testator may designate in his "ill, card or other document, the
surgeon or physician "ho "ill carry out the appropriate procedures. !n
the absence of a designation, or if the designee is not available, the
legatee or other persons authoriHed to accept the legacy may
authoriHe any surgeon or physician for the purpose.
Se2+0o# 9. Manner of Execting a Donation. U Any donation by a person
authoriHed under subsection 9a= of 3ection ) hereof shall be sufficient if it
complies "ith the formalities of a donation of a movable property.
!n the absence of any of the persons specified under 3ection ) hereof and
in the absence of any document of organ donation, the physician in charge
of the patient, the head of the hospital or a designated officer of the hospital
"ho has custody of the body of the deceased classified as accident,
trauma, or other medico-legal cases, may authoriHe in a public document
the removal from such body for the purpose of transplantation of the organ
to the body of a living person2 /rovided, That the physician, head of
hospital or officer designated by the hospital for this purpose has eerted
reasonable efforts, "ithin forty-eight 9).= hours, to locate the nearest
relative listed in 3ection ) hereof or guardian of the decedent at the time of
death.
!n all donations, the death of a person from "hose body an organ "ill be
removed after his death for the purpose of transplantation to a living
person, shall be diagnosed separately and certified by t"o 9$= qualified
physicians neither of "hom should be2
9a= A member of the team of medical practitioners "ho "ill effect the
removal of the organ from the body7 nor
9b= The physician attending to the receipt of the organ to be removed7
nor
9c= The head of hospital or the designated officer authoriHing the
removal of the organ.
Se2+0o# 1(. Person&s' Athori(e$ to )emo*e Trans%lanta+le Organs. U
?nly authoriHed medical practitioners in a hospital shall remove andOor
transplant any organ "hich is authoriHed to be removed andOor
transplanted pursuant to 3ection A hereof.
Se2+0o# 11. Deli*ery of Docment of !egacy or Donation. U !f the legacy
or donation is made to a specified legatee or donee, the "ill, card or other
document, or an eecuted copy thereof, may be delivered by the testator or
donor, or is authoriHed representative, to the legatee or donee to epedite
the appropriate procedures immediately after death. The "ill, card or other
document, or an eecuted copy thereof, may be deposited in any hospital
or organ ban( storage facility that accepts it for safe(eeping or for
facilitation or procedures after death. ?n the request of any interested party
upon or after the testator+s death, the person in possession shall produce
the document of legacy or donation for verification.
Se2+0o# 1;. Amen$ment or )e*ocation of !egacy or Donation. U
a= !f he "ill, card or other document, or an eecuted copy thereof, has
been delivered to a specific legatee or donee, the testator or donor
may amend or revo(e the legacy or donation either by2
9&= The eecution and delivery to the legatee or donee of a
signed statement to that effect7 or
9$= An oral statement to that effect made in the presence of t"o
other persons and communicated to the legatee or donee7 or
9'= A statement to that effect during a terminal illness or in-ury
addressed to an attending physician and communicated to the
legatee or donee7 or
9)= A signed card or document to that effect found on the person
or effects of the testator or donor.
9b= Any "ill, card or other document, or an eecuted copy thereof,
"hich has not been delivered to the legatee or donee may be
revo(ed by the testator or donor in the manner provided in subsection
9a= of this 3ection or by destruction, cancellation or mutilation of the
document and all eecuted copies thereof.
Any legacy made by a "ill may also be amended or revo(ed in the
manner provided for amendment or revocation of "ills, or as provided
in subsection 9a= of this 3ection.
Se2+0o# 1,. )ights an$ Dties After Death. U
9a= The legatee or donee may accept or re-ect the legacy or donation
as the case may be. !f the legacy of donation is of a part of the body,
the legatee or donee, upon the death of the testator and prior to
embalming, shall effect the removal of the part, avoiding unnecessary
mutilation. After removal of the part, custody of the remainder of the
body vests in the surviving spouse, net of (in or other persons under
obligation to dispose of the body of the decedent.
9b= Any person "ho acts in good faith in accordance "ith the terms of
this Act shall not be liable for damages in any civil action or sub-ect to
prosecution in any criminal proceeding of this Act.
Se2+0o# 1@. ,nternational -haring of "man Organs or Tisses. U
3haring of human organs or tissues shall be made only through echange
programs duly approved by the #epartment of >ealth2 /rovided, That
foreign organ or tissue ban( storage facilities and similar establishments
grant reciprocal rights to their /hilippine counterparts to dra" organs or
tissues at any time.
Se2+0o# 15. ,nformation Dri*e. U !n order that the public "ill obtain the
maimum benefits from this Act, the #epartment of >ealth, in cooperation
"ith institutions, such as the :ational Lidney !nstitute, civic and non-
government health organiHations and other health related agencies,
involved in the donation and transplantation of human organs, shall
underta(e a public information program.
The 3ecretary of >ealth shall endeavor to persuade all health
professionals, both government and private, to ma(e an appeal for human
organ donation.
Se2+0o# 16. )les an$ )eglations. U The 3ecretary of >ealth, after
consultation "ith all health professionals, both government and private, and
non-government health organiHations shall promulgate such rules and
regulations as may be necessary or proper to implement this Act.
Se2+0o# 1-. )e%ealing .lase. U All la"s, decrees, ordinances, rules and
regulations, eecutive or administrative orders, and other presidential
issuance inconsistent "ith this Act, are hereby repealed, amended or
modified accordingly.
Se2+0o# 18. -e%ara+ility .lase. U The provisions of this Act are hereby
deemed separable. !f any provision hereof should be declared invalid or
unconstitutional, the remaining provisions shall remain in full force and
effect.
Se2+0o# 19. Effecti*ity. U This Act shall ta(e effect after fifteen 9&A= days
follo"ing its publication in the ?fficial @aHette or at least t"o 9$=
ne"spapers of general circulation.
Approved2 *anuary 1, &%%$