Mabalacat Sugar Co., Inc.
, owner of the sugar central obtained a loan from Cu
CIVIL CODE OF THE PHILIPPINES
BOOK II - PROPERTY, OWNERSHIP,
AND ITS MODIFICATIONS
Case Digests
Article 415 – Immovable Property
Leung Yee v. Strong Machinery
No. L-11658 (1918)
1st Mortgage of Building to FL Strong Machinery Co
"Compañía Agrícola Filipina" bought rice-cleaning machinery from F. L.
Strong Machinery Co. and executed a chattel mortgage thereon to secure
payment of the purchase price. It included in the mortgage deed the building of
strong materials in which the machinery was installed, without any reference to
the land on which it stood. The mortgaged property was later sold by the sheriff,
in pursuance of the terms of the mortgage instrument, and was bought by the
machinery company; and such was registered in the chattel
mortgage registry, and the sale of the property to the machinery company in
satisfaction of the mortgage was annotated in the same registry.
Deed of Sale of Land
Subsequently, Compañía Agrícola Filipina executed a deed of sale of the land
on the building without reference to the building erected on the land; and
without registration of the said deed. At the same time the machinery company
went into possession of the building when the sale took place.
2nd Mortgage of Building to Leung Yee
"Compañía Agrícola Filipina" executed another mortgage to the plaintiff upon
the building, separate and apart from the land on which it stood, to secure
payment of the balance of its indebtedness to the plaintiff under a contract for
the construction of the building. The same was sold by the sheriff to Leung Yee
ISSUE:
 Who has a better right over the building
 WON the building can be considered personal property and be
registered in the Chattel Mortgage Registry because it was
treated separately from the land where it stood.
RULING:
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.
By its express terms, the Chattel Mortgage Law contemplates and makes
provision for mortgages of personal property; and the sole purpose and object
of the chattel mortgage registry is to provide for the registry of "Chattel
mortgages," that is to say, mortgages of personal property executed in the
manner and form prescribed in the statute.
In this case; building is real property though treated separately from the
land
The building of strong materials in which the rice-cleaning machinery was
installed by the "Compañía Agrícola Filipina" was real property, and the mere
fact that the parties seem to have dealt with it separate and apart from the land
on which it stood in no wise changed its character as real property. It follows
that neither the original registry in the chattel mortgage registry of the
instrument purporting to be a chattel mortgage of the building and the
machinery installed therein, nor the annotation in that registry of the sale of the
mortgaged property, had any effect whatever so far as the building was
concerned.
Conclusion: The Court ruled in favor of F.L. Strong Machinery Co.; The
Court cited Article 1473 of the CC; the machinery company must be held to be
the owner of the property under the third paragraph of the above cited article of
the code, it appearing that the company first took possession of the property;
and further, that the building and the land were sold to the machinery company
long prior to the date of the sheriff's sale to the plaintiff. Further, Leung Yee
was duly notified that the machinery company had bought the building from
'Compañía Agrícola Filipina’s judgement debtor hence he cannot be a purchaser
in good faith.
Berkenkotter v. Cu Unjieng e Hijos
No. 41643 (1935)
Unjieng e Hijos, secured by a first mortgage constituted on two parcels of land.
shortly after said mortgage had been constituted, the Mabalacat Sugar Co., Inc.,
decided to increase the capacity of its sugar central by buying additional
machinery and equipment. In order to carry out this plan, B. A. Green, president
of said corporation, proposed to the plaintiff, B. H. Berkenkotter, 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
Mabalacat Sugar Co., Inc., B.H. Berkenkotter agreed and supplied to B.A.
Green the total amount of P25,750. Furthermore, B. H. Berkenkotter had a
credit of P22,000 against said corporation for unpaid salary. B. A. Green failed
to obtain said additional loan from Cu Unjieng e Hijos.
Berkenkotter claims that the machines are not permanent incorporations of the
central property because they are considered securities by B.A. Green to
Berkenkotter in case no additional loan was approved from Cu Unjieng e Hijos.
in case B. A. Green should fail to obtain an additional loan from the defendants
Cu Unjieng e Hijos, said machinery and equipment would become security
therefor, said B. A. Green binding himself not to mortgage nor encumber them
to anybody until said plaintiff be fully reimbursed for the corporation's
indebtedness to him.
ISSUE: Whether or not the Additional machinery and equipment are
considered improvements incorporated with the central and are therefore
subject tot the mortgage deed executed in favor of Cu Unjien e Hijos.
RULING:
Citing Bischoff v Pomar and Compania General de Tabacos; in a mortgage of
real estate, the improvements on the same are included; therefore, all objects
permanently attached to a mortgaged building or land, although they may have
been placed there after the mortgage was constituted, are also included. Except
when there is an exclusion thereof through a stipulation between the contracting
parties.
Ruling Summary;
(1) 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 subjects said machinery and
equipment to the mortgage constituted thereon (article 1877, Civil Code);
(2) that the fact that the purchaser of the new 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
otherwise encumbering them does not alter the permanent character of the
incorporation of said machinery and equipment with the central; and
(3) that the sale of the machinery and equipment in question by the purchaser
who was supplied the purchase money, as a loan, to the person who supplied
the money, after the incorporation thereof with the mortgaged sugar central,
does not vest the creditor with ownership of said machinery and equipment but
simply with the right of redemption.
(1) In this case; Machines are permanent because of their purpose which
is for the use of the sugar industry
If the installation of the machinery and equipment in question in the central of
the Mabalacat Sugar Co., Inc., in lieu of. the other of less capacity existing
therein, for its sugar industry, converted them into real property by reason of
their purpose, it cannot be said that their incorporation therewith was not
permanent in character because, as essential and principal elements of a sugar
central, without them the sugar central would be unable to function or carry on
the industrial purpose for which it was established. Inasmuch as the central is
permanent in character, the necessary machinery and equipment installed for
carrying on the sugar industry for which it has been established must necessarily
be permanent.
(2) In this case; The fact that machines were deemed as security does not
prevent B.A. Green from using them as 2 nd mortgage
the fact that B. A. Green bound himself to the plaintiff B. H. Berkenkotter to
hold said machinery and equipment as security for the payment of the latter's
credit and to refrain from mortgaging or otherwise encumbering them until
Berkenkotter has been fully reimbursed therefor, is not incompatible with the
permanent character of the incorporation of said machinery and equipment with
the sugar central of the Mabalacat Sugar Co., Inc., as nothing could prevent B.
A. Green from giving them as security at least under a second mortgage.
(3) In this case; On sale of machinery only right of redemption was sold;
As to the alleged sale of said machinery and equipment to the plaintiff and
appellant after they had been permanently incorporated with the sugar central
of the Mabalacat Sugar Co., Inc., and while the mortgage constituted on said
sugar central to Cu Unjieng e Hijos remained in force, only the right of
redemption of the vendor Mabalacat Sugar Co., Inc., in the sugar central with
which said machinery and equipment had been incorporated, was transferred
thereby, subject to the right of the defendants Cu Unjieng e Hijos under the first
mortgage.
Philippine Refining Co. v. Jarque
No. 41506 (1935)
Philippine Refining Co., In., and Francisco Jarque executed three mortgages on
the motor vessels Pandan and Zaragoza. Neither of the first two mortgages had
appended an affidavit of good faith. The third mortgage contained such an
affidavit. . A fourth mortgage was executed by Francisco Jarque and Ramon
Aboitiz on the motorship Zaragoza and was entered in the chattel mortgage
registry of the register of deeds. Francisco Jarque was later declared to be an
insolvent debtor. Subsequently, Judge Jose M. Hontiveros declined to order the
foreclosure of the mortgages, but on the contrary sustained the special defenses
of fatal defectiveness of the mortgages.
ISSUE:
 Whether or not Vessels are personal property and therefore subject
under the Chattel Mortgage Law
 Whether or not Vessels are any different than the Chattel mortgage
of other personality
RULING:
Vessels are personal property subject under the Chattel mortgage law
Vessels are considered personal property under the civil law. Similarly under
the common law, vessels are personal property although occasionally referred
to as a peculiar kind of personal property. Since the term "personal property"
includes vessels, they are subject to mortgage agreeably to the provisions of the
Chattel Mortgage Law. Indeed, it has heretofore been accepted without
discussion that a mortgage on a vessel is in nature a chattel mortgage.
Difference between a chattel mortgage and an ordinary chattel is record in
the collector of customs
The only difference between a chattel mortgage of a vessel and a chattel
mortgage of other personality is that it is not now necessary for a chattel
mortgage of a vessel to be noted in the registry of the register of deeds, but it is
essential that a record of documents affecting the title to a vessel be entered in
the record of the Collector of Customs at the port of entry. Otherwise a
mortgage on a vessel is generally like other chattel mortgages as to its requisites
and validity.
Need for Affidavit of good faith to make mortgage enforceable as against
third persons
The Chattel Mortgage Law in its section 5, in describing what shall be deemed
sufficient to constitute a good chattel mortgage, includes the requirement of an
affidavit of good faith appended to the mortgage and recorded therewith. The
absence of the affidavit vitiates a mortgage as against creditors and subsequent
encumbrancers. As a consequence a chattel mortgage of a vessel wherein the
affidavit of good faith required by the Chattel Mortgage Law is lacking, is
unenforceable against third persons.
The Court rules in favor of Jarque.
Davao Saw Mill Co. Inc, v Castillo and Davao Light Power Co
No. 40411 (1935)
Davao Sawmill Co., operated a sawmill. The land upon which the business was
conducted was leased from another person. On the land, Davao Sawmill erected
a building which housed the machinery it used. Some of the machines were
mounted and placed on foundations of cement. In the contract of lease, Davo
Sawmill agreed to turn over free of charge all improvements and buildings
erected by it on the premises with the exception of machineries, which shall
remain with the Davao Sawmill. In an action brought by the Davao Light and
Power Co., judgment was rendered against Davao Sawmill. A writ of execution
was issued and the machineries placed on the sawmill were levied upon as
personalty by the sheriff. Davao Light and Power Co., proceeded to purchase
the machinery and other properties auctioned by the sheriff.
ISSUE: Whether or not machinery and equipment mounted on cement and
installed by a LESSEE on leased land is considered real property.
RULING:
Machinery involved in this case
In this case what is involved is machinery not intended by the owner of any
building or land for use in connection therewith, 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 expiration or abandonment of the lease.
GENERAL RULE: Machinery only becomes an immovable if placed by
the owner and not by the tenant
machinery which is movable in its nature only becomes immobilized when
placed in a plant by the owner of the property or plant,
EXCEPTION: but not when so placed by a tenant, a usufructuary, or any
person having only a temporary right, unless such person acted as the agent of
the owner.
In this case; It could have fallen under the exception to exception if not because
of the last sentence of the lease contract between the owner of the land and
Davao Sawmill that; “That the machineries and accessories are not included
in the improvements which will pass to the party of the first part on the
expiration or abandonment of the land leased.”
Note:
Immobilization of property through a contract of permanent destination
Where a lease in substance required the putting in of improved machinery,
deprived the tenant of any right to charge against the lessor the cost of such
machinery, and it was expressly stipulated that the machinery so put in should
become a part of the plant belonging to the owner without compensation to the
lessee. Under such conditions the tenant in putting in the machinery was acting
but as the agent of the owner in compliance with the obligations resting upon
him, and the immobilization of the machinery which resulted arose in legal
effect from the act of the owner in giving by contract a permanent destination
to the machinery.
Caltex Phil. Inc. v. Central Board of Assessment Appeals
No. L-50466 (1982)
CALTEX installed machinery and equipment in its gas station located on leased
land. The Machines and equipment consists of underground tanks, elevated
tank, water tanks, gasoline pumps, etc. The said machines and equipment are
loaned by Caltex to GAS STATION OPERATORS under a lease agreement
where it is stipulated that the operators upon demand, shall return to Caltex the
machines and equipment. Hence, the LESSOR of the land where the gas station
is located does not become the owner of the machines and equipment installed
for ownership retained by Caltex.
The city assessor of Pasay City characterized the said items of gas station
equipment and machinery as taxable realty. The city board of tax appeals ruled
that they are personalty. The assessor appealed to the Central Board of
Assessment Appeals.
The Central Board of Assessment Appeals claims that the machines and the
equipment are within the meaning of sections 3(k) (m) and 38 of the Real
Property Tax Code, Presidential Decree No. 464; Hence they are subject to
realty tax.
ISSUE: whether the gas station equipment and machinery permanently affixed
by Caltex to its gas station and pavement (which are indubitably taxable realty)
should be subject to the realty tax.
RULING:
The machine and equipment are TAXABLE IMPROVEMENTS AND
MACHINERY within the meaning of thr Assessment Law and the Real
Property Tax Code
We hold that the said equipment and machinery, as appurtenances to the gas
station building or shed owned by Caltex (as to which it is subject to realty tax)
and which fixtures are necessary to the operation of the gas station, for without
them the gas station would be useless, and which have been attached or affixed
permanently to the gas station site or embedded therein, are taxable
improvements and machinery within the meaning of the Assessment Law and
the Real Property Tax Code.
The Court further held that it is a familiar phenomenon to see things classed as
real property for purposes of taxation which on general principle might be
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considered personal property. Hence, The Central Board of Assessment
Appeals did not commit a grave abuse of discretion in upholding the city
assessors imposition of the realty tax on Caltex’s gas station and equipment.
Machinery and Engineering v. Court of Appeals
No. L-7057 (1982)
Machinery and Engineering Supplies Inc. filed a complaint for replevin for the
recovery of the machinery and equipment sold and delivered to Ipo Limestone
Co. (Villarama). Judge issued an order for immediate possession of th
machinery and equipment. Ramon Roco, representative of Machinery and
Engineering found that the equipments could not possibly be dismantled
without causing damages or injuries to the wooden frames attached to them. .
The manager of Ipo protested the seizure on the ground that the same were not
personal property as dismantling them would result to damages to the wooden
frames attached. Still Roco insisted on dismantling the property causing
damage to the frames. An order was later issued for the reinstallment of the
machines and equipment. Instead they were left on the road without inventory
or proper reinstallment to restore them to their prior condition.
ISSUE: Whether or not the machine and equipment were real property and
therefore not subject to a complaint for replevin.
RULING:
Action for Replevin
"Ordinarily replevin may be brought to recover any specific personal property
unlawfully taken or detained from the owner thereof, provided such property is
capable of identification and delivery; but replevin ill not lie for the recovery of
real property or incorporeal personal property
In this case; Machinery was attached to the land and were intended by the
owner of the tenement of an industry to meet the needs of the industry
When the sheriff repaired to the premises of respondent, Ipo Limestone Co.,
Inc., the machinery and equipment in question appeared to be attached to the
land, particularly to the concrete foundation of said premises, in a fixed manner,
in such a way that the former could not be separated from the latter "without
breaking the material or deterioration of the object." Hence, in order to remove
said outfit, it became necessary, not only to unbolt the same, but, also, to cut
some of its wooden supports. Moreover, said machinery and equipment were
"intended by the owner of the tenement for an industry" carried on said
immovable and tended "directly to meet the needs of the said industry."
Hence they are immovable property and not subject to replevin
For these reasons, they were already immovable property pursuant to
paragraphs 3 and 5 of Article 415 of Civil Code of the Philippines, which are
substantially identical to paragraphs 3 and 5 of Article 334 of the Civil Code of
Spain. As such immovable property, they were not subject to replevin.
Navarro v. Pineda
No. L-18456 (1963)
Rufino Pineda and his mother Juana obtained a loan of P2,550 from Condrado
Navarro which they promised to pay within or after six months. As security for
said loan, Rufino executed a Chattel Mortgage over a truck in his own name
and over his two-story residential house which was erected on the lot of a third
person.
Because of the failure to pay of the Pineda’s, Navarro instituted a complaint for
foreclosure of said mortgaged properties.
The Pineda’s however allege that since only movables can be subject of a
Chattel Mortgage, then the mortgage in question cannot give rise to a valid
foreclosure since the subject of the mortgage herein is an immovable property
(two-story house). Moreover, they argue that the trial court erred in declaring
valid said Chattel Mortgage and that the court’s reason is merely that it was
erected on a land that belongs to a third person.
ISSUE: Whether or not the residential lot is an immovable and therefore not
subject of a Chattel Mortgage making the said Mortgage void.
RULING: The residential lot is a movable by virtue of the Principle of
Estoppel.
Parties may by agreement treat as personal property that which by nature
is real property
In construing Arts. 334 and 335 of the Spanish Civil Code (corresponding to
Arts. 415 and 416, N.C.C.), for purposes of the application of the Chattel
Mortgage Law, it was held that under certain conditions, “a property may have
a character different from that imputed to it in said articles. It is undeniable that
the parties to a contract may by agreement, treat as personal property that which
by nature would be real property.”
There can not be any question that a building of mixed materials may be the
subject of a chattel mortgage, in which case, it is considered as between the
parties as personal property. The matter depends on the circumstances and the
intention of the par-ties”. “Personal property may retain its character as such
where it is so agreed by the parties interested even though annexed to the realty
x x x”
Principle of Estoppel
The view that parties to a deed of chattel mortgage may agree to consider a
house as personal property for the purposes of said contract, “is good only
insofar as the contracting parties are concerned. It is based partly, upon the
principles of estoppel.
Object placed by lessee does not become immovable
Hence, an object placed on a land by one who has only a temporary right to the
same, such as a lessee or usufructuary, does not become immobilized by
attachment.
In this case; the house was treated as personal property
In the case at bar, the house in question was treated as personal or movable
property, by the parties to the contract themselves. In the deed of chattel
mortgage, appellant Rufino G. Pineda conveyed by way of “Chattel Mortgage”
“my personal properties”, a residential house and a truck. The mortgagor
himself grouped the house with the truck, which is, inherently a movable
property. The house which was not even declared for taxation purposes was
small and made of light construction materials: G.I. sheets roofing, sawali and
wooden walls and wooden posts; built on land belonging to another.
Note: compared to Leung yee
In these two cases and in the Leung Yee case, supra, third persons assailed the
validity of the deed of chattel mortgages; in the present case, it was one of the
parties to the contract of mortgages who assailed its validity.
Article 420 – Property in Relation to the Person whom it belongs
Philippine Fisheries Development Authority v. Court of Appeals
No. 150301 (2007)
[REPORT]
The MUNICIPALITY OF NAVOTAS assessed the real estate taxes allegedly
due from PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY (PFDA)
for the management and operation of the NAVOTAS FISHING PORT
COMPLEX (NFPC). The assessed taxes remained unpaid leading to a Notice
sent to PFDA that the NFPC will be sold at public auction to collect their
delinquent realty taxes.
The PFDA sought sought the deferment of the auction sale claiming that the
NFPC is owned by the Republic of the Philippines, and pursuant to Presidential
Decree (P.D.) No. 977, it (PFDA) is not a taxable entity.
The matter was referred to the Department of Finance which stated that If used
by a non-taxable person other than PFDA itself, it remains to be non-taxable.
Otherwise, if said properties are being used by taxable persons, same becomes
taxable properties. Hence, an ocular inspection of real property is necessary for
reason that the real properties, the use of which has been granted to taxable
persons.
The Municipality of Navotas, notwithstanding the DOF’s Instructions,
published the notice of sale for the NFPC. Hence, the PFDA filed a case before
the Court claiming that NFPC is a reclaimed land and hence a property of public
dominion, owned by the state, and intended for public use and public service;
Therefore, it is exempted from realty tax and cannot be sold at public auction.
ISSUE: Whether or not the PFDA as a reclaimed land and hence a property of
public dominion is exempt from realty tax and cannot be sold at a public
auction.
RULING:
On the tax exemption of the PFDA
The Court explained that the power of the Local Government Unit to impose
realty taxes was granted and limited by the LGCode; Thus, such exercise of
taxing powers shall not extend to the levy of taxes, fees, charges of any kind on
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the national government, its agencies and instrumentalities, and local
government units. (Sec 133 of LGCode)
However, in this case the Court held that such exemption does not apply when
the beneficial use of the government property has been granted to a taxable
person. Section 234 (a) of the Code states that real property owned by the
Republic of the Philippines or any of its political subdivisions is exempted from
payment of the real property tax “except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person.”
In this case; PFDA, being an instrumentality of the national government, is
exempt from real property tax but the exemption does not extend to the portions
of the NFPC that were leased to taxable or private persons and entities for their
beneficial use.
On sale in Public Auction
The Court held that the NFP which was constructed by the State for public use
and/or public service falls within the term “port” in Article 420 of the Civil
Code, which provides things of public dominion. Hence, Being a property of
public dominion the same cannot be subject to execution or foreclosure sale.
Therefore , the NFPC cannot be sold at public auction in satisfaction of the tax
delinquency assessments made by the Municipality of Navotas on the entire
complex.
Reclaimed land belongs to State
Additionally, the land on which the NFPC property sits is a reclaimed land,
which belongs to the State the Court declared that reclaimed lands are lands of
the public domain and cannot, without Congressional fiat, be subject of a sale,
public or private.
PFDA is only liable to pay the amount of P62,841,947.79 representing the
total taxes due as of December 31, 2001 from PFDA-owned properties that
were leased, as shown in the Summary of Realty Taxes Due Properties
Owned and/or Managed by PFDA.
Article 445 – With Respect to Immovable Property
Daclison v. Baytion
G.R. No. 219811 (2016)
BAYTION as a co-owner, along with his siblings, and administrator of
inherited land leased portions of the said land to LEONIDA. Upon the
expiration of the said Lease DACLISON took over without the consent of
Baytion. Hence, a complaint for forcible entry with damages was filed by
Baytion.
Daclison claims that Baytion had once leased the subject property to ANTONIO
DELA CRUZ where Antonio started a business. that ten or fifteen years later,
a stone walling, called a ,was erected at the creek lying beside Baytions
property, leaving a deep down-sloping area; that Antonio negotiated with a
certain engineer so he could be in possession of the said down-slope; that
Antonio had the down-slope filled up until it was leveled with the leased
portion; that Antonio paid for the right to possess the same.
Antonio’s business was taken over by LEONIDA, and was later taken over by
ERNANIE. Daclison claims that Baytion had demanded for Ernanie to vacate
the premises and later Baytion made a promise hat he would no longer bother
them if they would just transfer to the filled-up and plane-leveled property;
Daclison insists that the filled-up portion is not an improvement on the leased
property as found by the RTC and the court . It is a property separate and distinct
from the leased property. Baytion basically posits that although the disputed
portion is outside the description of the property it forms an integral part of the
latter because it is an accretion, construction, or improvement on the property
and, under the law, any accretion or anything built thereon belongs to him and
his co-owners.
ISSUE: Whether or not Baytion has a better right to posses the subject
property.
RULING: The Court held that Baytion’s contention that he owns that portion
by reason of accretion is misplaced.
Requisites of Accretion:
the following requisites must concur in order for an accretion to be considered,
namely that
1. the deposit be gradual and imperceptible;
2. that it be made through the effects of the current of the water;
3. and that the land where accretion takes place is adjacent to the banks
of rivers.
In this case; contested portion is not an accretion
In the case at bench, this contested portion cannot be considered an accretion.
To begin with, the land came about not by reason of a gradual and imperceptible
deposit. The deposits were artificial and man-made and not the exclusive result
of the current from the creek adjacent to his property. Baytion failed to prove
the attendance of the indispensable requirement that the deposit was due to the
effect of the current of the river or creek. Alluvion must be the exclusive work
of nature and not a result of human intervention.
The property is also NOT an improvement or accession; “made thereon”
means made within / on the property
Article of the Civil Code provides Art. 445 provides Whatever is built, planted
or sown on the land of another and the improvements or repairs made thereon,
belong to the owner of the land, subject to the provisions of the following
articles.
It must be noted that Article 445 uses the adverb thereon which is simply
defined as on the thing that has been mentioned. In other words, the supposed
improvement must be made, constructed or introduced within or on the property
and not outside so as to qualify as an improvement contemplated by law.
otherwise, it would just be very convenient for land owners to expand or widen
their properties in the guise of improvements.
In this case; Baytion is not the owner of the disputed property.
Baytion, not being the owner of the contested portion, does not have a better
right to possess the same. In fact, in his initiatory pleading, he never claimed to
have been in prior possession of this piece of property. His claim of ownership
is without basis.
Conclusion: As earlier pointed out, the portion is neither an accretion nor an
accession. That being said, it is safe to conclude that he does not have any cause
of action to eject Daclison.
Bicerra v. Teneza
No. L-16218 (1962)
Bicerra were owners of the house built on a lot owned by them. Sometime in
1957 Teneza forcibly demolished the house, claiming to be the owners thereof;
After the house was dismantled the materials thereof were placed in the custody
of the barrio lieutenant of the place;
Because Teneza refused to restore the house or even deliver the materials of the
said house back to Bicerra they petition to be awarded actual, moral and
consequential damages. Further they prayed that they be declared the owners of
the house in question as well as with the materials that resulted in its
dismantling.
ISSUE: Whether the action involves title to real property, despite the fact that
the house was already demolished?
RULING: The Court orders the dismissal of the petition of Bicerra
A house is classified as immovable property by reason of its adherence to the
soil on which it is built (Art. 415, par. 1, Civil Code). This classification holds
true regardless of the fact that the house may be situated on land belonging to a
different owner. But once the house is demolished, as in this case, it ceases to
exist as such and hence its character as an immovable likewise ceases.
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Article 477
Heirs of Orosa v. Migrino
G.R. Nos. 99338-40. February 1, 1993
In a previous case entitled “Maria Mayug Vda. de Cailles v. Dominador
Mayuga, et. al.,” the Court confirmed ownership over 53 hectares of land in
favor of DOMINADOR MAYUGA, whose successor- in- interest is NICOLAS
OROSA.
THE HEIRS OF NICOLAS OROSA then moved for the execution of such
judgement to which the lower Court issued an order for the LAND
REGISTRATION AUTHORITY to submit the amended technical description
of the said lot.
However, the LAND REGIS AUTHORITY did not comply with the order
claiming that its records indicate that the property has been previously decreed
in favor of JOSE VELASQUEZ;
GOLDENROD INC (GOLDENROD) filed a motion for leave to intervene in
the execution proceeding claiming that it has an interest in the subject property;
The HEIRS OF OROSA opposed to the motion but without success, since said
motion for leave to intervene was granted by the LOWER COURT.
Hence a petition was filed by the HEIRS OF OROSA in Court;
GOLDENROD’S CONTENTION: That said land was acquired for value by
DELTA MOTORS CORPORATION (DELTA) from NICOLAS OROSA; He
also acquired those portions allegedly belonging to VELASQUEZ; Delta
succeeded in obtaining TCTs for those titled and later sold the land to
GOLDENROD; Goldenrod also obtained TCTs issued in its name;
Subsequently, GOLDENROD sold the land to a CONSORTIUM composed of
FIL ESTATE MANAGEMENT INC., ARTURO Y. DY, MEGATOP
REALTY DEVELOPMENT INC., PEAKSUN ENTERPRISES AND
EXPORT CORPORATION, AND ELENA D. JAO ("CONSORTIUM");
Included in such sale is an UNDERTAKING on the part of GOLDENROD to
"defend the title of the VENDEES to the property against claims of any third
person whatsoever."
ISSUE:
 Whether or not Goldenrod has sufficient legal interest in the
land.
RULING:
Goldenrod’s DIRECT and ACTUAL interest was disposed of hence it only
had expectant or contingent interest
Taking Goldenrod's own admissions at their face value, it is quite apparent that
whatever direct and actual legal interest it may have had over the land had been
disposed of by it for value in favor of the consortium in 1989 and that whatever
residual legal interest in the property can be premised on Goldenrod's
contractual undertaking, actually an express warranty against eviction, is
expectant or contingent in nature.
Presently, Goldenrod has no legal interest in the property and its warranty
can only be enforced by the consortium if the latter is dispossessed of the
land by virtue of a proper action instituted by the Orosa heirs as registered
owners thereof.
Legal interest for a person to intervene in a suit should be ACTUAL and
MATERIAL;
the legal interest which entitles a person to intervene in a suit must be actual
and material, direct and immediate. A party seeking to intervene in a pending
case must show that he will either gain or lose by the direct legal operation and
effect of a judgment.
In this case;
Goldenrod has failed to meet this criteria and the lower court gravely abused its
discretion in permitting intervention after having overlooked this matter.
LowerCourt cited Section 32 of PD1529; which allows for the reopening of
a decree of registration when a person has been deprived of any interest
over the affected land;
Section 32 of P.D. 1529,16 permitting the reopening of a decree of registration
within one year after its entry, if the same was procured through actual fraud
and a person is thereby deprived of any interest over the affected land.
However, GoldenRod had no actual interest that can be deprived from it;
The difficulty with this view is that, as earlier noted, Goldenrod had not shown
any actual interest in the land of which it could have been deprived, on the
basis of an actual or extrinsic fraud perpetrated by petitioners in the course of
procuring their decree of confirmation. Goldenrod had merely alleged, rather
ambiguously, a cause of action against petitioners in that they "suddenly
breached and disregarded the 1977 Agre ment" (the sale between Nicolas
Orosa and Delta). Even the public respondent made no finding that Goldenrod
was the apparent victim of an actual fraud. Hence its invocation of the remedy
provided in Section 32 of P.D. 1529 was bereft of basis.
Moreover; confirmation and adjudication of owenership has become final
and settled in the previous civil case; this means that the lower Court has
been divested of jurisdiction to act on said case; It only had jurisdiction to
execute the Court’s decision
upon entry of the Court's judgment in G.R. No. L-30859, the confirmation of a
registerable title, and the consequent adjudication of ownership over Lot 9 Psu-
11411 Amd-2, in favor of petitioners' predecessors-in-interest became a final
and settled matter.18 Such entry of judgment operated ipso facto to divest the
lower court of its general jurisdiction to act in LRC No. 2839, save for the
limited matter of supervising the process of executing the Court's decision. The
public respondent simply cannot, as it appears to be trying to do in this case,
interpret or reverse the implication of this Court's ruling that petitioners are
entitled to a Torrens title over Lot 9 Psu11411 Amd-2, just because Goldenrod
seeks to recall execution by making a supervening allegation that petitioners are
no longer the owners thereof.
Another contention by the Lower Court is that the grantof the motion for
leave to intervene was in order to clear the cloud in the title of the party to
whom ownership may be adjudicated;
It would appear that the public respondent premised its ruling solely on the
belief that a cloud had descended on the title over the real property which is the
subject matter of LRC No. 2839 and that this cloud had to be removed.
Article 477 of the Civil Code;
Art. 477. The plaintiff must have legal or equitable title to, or an interest
in the real property which is the subject matter of the action. He need not
be in possession of said property.
In this case;
Evidence of Goldenrod's capacity on this point is inexistent because Goldenrod
is not asserting a claim to the property On the contrary, it had admitted having
alienated its interest in the land referred to as Lot 9 Psu11411 Amd-2 to the
consortium. Thus, Goldenrod is not an interested party capable of instituting an
action to quiet title, either by intervening in LRC No. 2839 or by instituting a
separate action. The right to commence such a separate action pertains to its
Vendee, if the latter wishes to defend the validity of its 1987 purchase from
Goldenrod and to hold the Vendor Goldenrod liable on its warranty of title.
5 | PROPERTY | 2018 |Louis Palma Gil
 Lim-Rosario v. Lim
G.R. No. 206534. October 5, 2016

BRIGIDA LIM acquired leasehold rights on a government lot in Baguio City;

Brigida and her son ALFONSO LIM allegedly entered into an AGREEMENT
for the construction of a building on the said property which would be fully
financed by ALFONSO LIM.

An AFFIDAVIT OF WAIVER OF RIGHTS was executed by BRIGIDA

categorically waiving, renouncing, and transferring all her rights and interests
over the leased lot in Alfonsos favor. Another Deed of Waiver of Rights
reiterating her waiver of rights over the leased lot and the erected building in
favor of her son. However, in an AFFIDAVIT assailing the validity of the
documents she stated that she and her husband LUIS were the real owners of
the property and that Alfonso never caused and paid for the construction of the
subject building.

BRIGIDA dies intestate and ALFONSO and his sisters JULIA LIM ROSARIO,
MERCEDES LIM CUSTODIO, NORMA LICARDO, AND LEILA
ESPIRITU executed a DEED OF EXTRAJUDICIAL SETTLEMENT for the
estates of their parents without including the disputed property.

JULIA LIM ROSARIO then filed a complaint before the Court for JUDICIAL
PARTITION OF REAL ESTATE including the disputed property.

Lower Court Granted the petition of JULIA LIM-ROSARIO but the CA

reversed the decision of the Lower Court ordering that further proceedings be
made to determine the proper application of Articcles 448 in relation to Article
546 of the Civil Code.

ISSUE: Whether or not the property in question should be included in Brigida’s

estate and be divided in equal shares among her children.

RULING:

Records provide that Brigida had acquired the disputed property during
her marriage to Luis and the title to property remains under her name;
Credit was given to her affidavit by the Court pertinent provisions of which
are;
Alfonso Lim revealed his greedy intention to own for himself alone the said
entire building at the exclusion of all his aforenamed sisters. And towards this
end, with use of threats and intimidation, my said son Alfonso Lim, forced me
to sign an affidavit dated May 27, 1988 stating therein, among others, that it
was my said son Alfonso Lim who financed the construction of the first two (2)
storeys and who entered into a building contract with a certain Romeo F. Laigo.
It is also stated therein that it was my said son who financed the construction of
the 3rd and fourth floors, plus the penthouse of the same building sometime in
1977. All these matters are absolutely false because all the expenses
therefor are my own money as stated earlier and none came from my said
son Alfonso Lim because the latter was jobless that time up to the present
and gets his money from me. When the building was already completed, my
said son got all the rentals therefrom at the exclusion of his sisters, although,
there were rare occasions that my said son gave me minimal amount from said
rentals;

The affidavit of Brigida provides that

 it was never Brigidas intention to give the exclusive ownership of
the contested lot to Alfonso, and the title to the same was never
transferred in anybody elses name.
 the development of the building had actually come from Brigida and
Luis and not from Alfonso, who was jobless and had no sufficient
source of income at that time to finance the construction of a
building.
 exposes the fact that Brigida never intended to transfer the sole
ownership of the contested property to her only son, but wanted it to
benefit all of her children, and that whatever document she may have
had executed in the past was fraudulently acquired and not obtained
with her valid consent.

6 | PROPERTY | 2018 |Louis Palma Gil