PRUDENTIAL BANK

vs. HON. DOMINGO D. PANIS, FERNANDO MAGCALE & TEODULA BALUYUT-MAGCALE

G.R. No. L-50008
August 31, 1987
FACTS:

Spouses Magcale secured a loan from Prudential bank by executing a real estate mortgage
over a residential building

The duly registered mortgage included the right to occupy the lot and the information about
the sales patent applied for by the spouses for the lot to which the building stood

The spouses then failed to pay for the loan and the real estate mortgage was extrajudicially
foreclosed and sold in public auction despite opposition from the spouses

The respondent court held that the real estate mortgage was null and void

LAW/S:

ART. 415 NEW CIVIL CODE

PAR. 1: Lands, buildings, roads, and constructions of all kinds adhered to the soil
Buildings are real properties

ISSUE/S:

Whether or not the deeds of real estate mortgage are valid

RULING:

YES, THEY ARE VALID.

Under enumeration of Art. 415, inclusion of "building" separate and distinct from the
land, in said provision of law can only mean that a building is by itself an immovable
property (Lopez vs. Orosa)

NOTE:

While 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 which it has been built

Building is an immovable = REAL ESTATE MORTGAGE

Possessory rights over buildings before title is vested on grantee may be validly transferred
via deed of mortgage