Case Title LADERA vs.

HODGES
G.R. no. G.R. No. 8027-R
Date: 23 September 1952

FACTS:
Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised to sell a
lot with an area of 278 square meters to Ladera, subject to certain terms and
conditions. The agreement called for a down payment of P 800.00 and
monthly installments of P 5.00 each with interest of 1% per month, until P 2,085 is
paid in full. In case of failure of the purchaser to make a monthly payment within 60
days after it fell due, “this contract may be taken and considered as rescinded and
annulled,” in which case all sums of money paid would be considered rentals and the
vendor shall be at liberty to dispose of the parcel of land with all the improvements
thereon to any other person in a manner as if this contract had never been made.
After the execution of the contract, Ladera built on a lot a house of mixed materials
assessed at P4500.

Unfortunately, Ladera failed to pay the agreed installments, whereupon the appellant
rescinded the contract and filed an action for ejectment. The MTC rendered a decision
upon agreement of the parties- Ladera to vacate and surrender possession of the lot
and pay P10 a month until delivery of the premises. Also, on that day, Ladera paid
Hodges P188.50 which the latter recorded as rental payment. The court issued an alias
writ of execution and pursuant thereto the sheriff levied upon all rights, interests, and
participation over your house standing on the lot. The sheriff posted the notices of the
sale but did not publish the same in a newspaper of general circulation.
An auction sale was then conducted but Ladera was not able to attend as she had
gone to Manila. The house was then sold to one Avelina Magno as the highest bidder.
Meanwhile, Ladera sold the same lot to one Manuel Villa and on the same day
purchased the house from Magno for 200 pesos. This, however, was not recorded.

Ladera returned to Iloilo after the sale and learned of its results. She went to see the
sheriff and upon the latter’s representation that she could redeem the property, she
paid him P230 and the sheriff issued a receipt. It does not appear, however, that this
money was turned over to Hodges. Thereupon, Ladera spouses filed an action against
Hodges, the sheriff, and the judgment sale purchasers, Magno and Villa to set aside
the sale and recover the house.

Judgment was rendered in favor of Ladera, setting aside the sale for non-compliance
with Rule 39,Rules of Court regarding judicial sales of real property. On appeal,
Hodges contends that the house, being built on a lot owned by another, should be
regarded as movable or personal property.
ISSUE:
Whether or not the house being built on land owned by another should be regarded
as movable property.
HELD:
NO.
According to Article 334 of the Civil Code (now 415), Immovable property are the
following: “Lands, building, roads, and constructions of all kinds adhering to the
soil;” Applying the principle Ubi lex non distinguit nec nos distinguere debemu, the law
makes no distinction as to whether the owner of the land is or is not the owner of the
building. In view of the plain terms of the statute, the only possible doubt could arise
in the case of a house sold for demolition.

In the case of immovables by destination, the code requires that they be placed by the
owner of the tenement, in order to acquire the same nature or consideration of real
property. In cases of immovable by incorporation, the code nowhere requires that the
attachment or incorporation be made by the owner of the land. The only criterion is
union or incorporation with the soil.
Ladera did not declare his house to be a chattel mortgage. The object of the levy or
sale was real property. The publication in a newspaper of general circulation was
indispensible. It being admitted that no publication was ever made, the execution sale
was void and conferred no title on the purchaser.

The alleged purchaser at the auction sale, Magno, is a mere employee of the creditor
Hodges and the low bid made by her as well as the fact that she sold the house to
Villa on the same day that Hodges sold him the land, proves that she was merely
acting for and in behalf of Hodges.

It should be noted that in sales of immovables, the lack of title of the vendor taints the
rights of subsequent purchasers. Unlike in sales of chattels and personality, in
transactions covering real property, possession in good faith is not equivalent to title.