BICERRA v TENEZA G.R. No.

L-16218 November 29, 1962

Facts: appellants were the owners of the house, worth P200.00, built on and
owned by them and situated in the said municipality Lagangilang; that sometime
in January 1957 appealed forcibly demolished the house, claiming to be the
owners thereof; that the materials of the house, after it was dismantled, were
placed in the custody of the barrio lieutenant of the place; and that as a result of
appellate's refusal to restore the house or to deliver the material appellants the
latter have suffered damages.
Issue: whether the action involves title to real property.
Ruling/ Rationale: 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.

----PRUDENTIAL BANK v. PANIS

An Real Estate Mortgage can be constituted on the building erected on the land
belonging to another.

FACTS:
Spouses Magcale secured a loan with Prudential Bank. To further secure said loan,
the spouses executed a Real Estate Mortgage over the residential building, with a
right to occupy the lot. The Real Estate Mortgage also included information about
the Sales Patent applied for by the spouses for the lot to which the building stood.
The spouses got another loan, which was secured by another Real Estate
Mortgage over the same properties.

The Sec. of Agriculture issued a Miscellaneous Sales Patent over the lot which
was then mortgaged to the bank in favor of the Macales.

The spouses defaulted on both loans. Thus, the Real Estate Mortgage was
extrajudicially foreclosed, and sold in a public auction.

The RTC held that the Real Estate Mortgage was null and void.

ISSUE:
Whether or not a Real Estate Mortgage can be constituted on the building erected
on a lot belonging to another?

HELD:
Yes.
The fact that the spouses executed the Real Estate Mortgage over the building
before executing the second Real Estate Mortgage over the land proved that the
spouses intended for the building to be an immovable separate and distinct from
the land on which it is built.
-----MAKATI LEASING AND FINANCE CORP. V. WEAREVER TEXTILE MILLS, INC.
Parties to a contract may by agreement treat as personal property that which by
nature is a real property, as long as no interest of 3rd party would be prejudiced.

FACTS:
To obtain financial accommodations from Makati Leasing, Wearever Textile
discounted and assigned several receivables under a Receivable Purchase
Agreement with Makati Leasing. To secure the collection of receivables, it

executed a chattel mortgage over several raw materials and a machinery Artos
Aero Dryer Stentering Range (Dryer).

Wearever defaulted thus the properties mortgaged were extrajudicially

foreclosed. The sheriff, after the restraining order was lifted, was able to enter
the premises of Wearever and removed the drive motor of the Dryer. The CA
reversed the order of the CFI, ordering the return of the drive motor since it
cannot be the subject of a replevin suit being an immovable bolted to the ground.
Thus the case at bar.

ISSUE:
Whether the dryer is an immovable property

HELD: NO
The SC relied on its ruling in Tumalad v. Vicencio, that if a house of strong
materials can be the subject of a Chattel Mortgage as long as the parties to the
contract agree and no innocent 3rd party will be prejudiced then moreso that a
machinery may treated as a movable since it is movable by nature and becomes
immobilized only by destination. And treating it as a chattel by way of a Chattel
Mortgage, Wearever is estopped from claiming otherwise.
------Evangelista v. Alto Surety
Evangelista v. Alto Surety
Facts:
In 1949, Santos Evangelista instituted Civil Case No. 8235 of the CFI Manila
(Santos Evangelista vs. Ricardo Rivera) for a sum of money. On the same date, he
obtained a writ of attachment, which was levied upon a house, built by Rivera on
a land situated in Manila and leased to him, by filing copy of said writ and the
corresponding notice of attachment with the Office of the Register of Deeds of
Manila. In due course, judgment was rendered in favor of Evangelista, who
bought the house at public auction held in compliance with the writ of execution
issued in said case on 8 October 1951. The corresponding definite deed of sale

was issued to him on 22 October 1952, upon expiration of the period of

redemption. When Evangelista sought to take possession of the house, Rivera
refused to surrender it, upon the ground that he had leased the property from the
Alto Surety & Insurance Co., Inc. and that the latter is now the true owner of said
property. It appears that on 10 May 1952, a definite deed of sale of the same
house had been issued to Alto Surety, as the highest bidder at an auction sale
held, on 29 September 1950, in compliance with a writ of execution issued in Civil
Case 6268 of the same court (Alto Surety & Insurance vs. Maximo Quiambao,
Rosario Guevara and Ricardo Rivera)" in which judgment for the sum of money,
had been rendered in favor of Alto Surety. Hence, on 13 June 1953, Evangelista
instituted an action against Alto Surety and Ricardo Rivera, for the purpose of
establishing his title over said house, and securing possession thereof, apart from
recovering damages. After due trial, the CFI Manila rendered judgment for
Evangelista, sentencing Rivera and Alto Surety to deliver the house in question to
Evangelista and to pay him, jointly and severally, P40.00 a month from October
1952, until said delivery. The decision was however reversed by the Court of
Appeals, which absolved Alto Surety from the complaint on account that although
the writ of attachment in favor of Evangelista had been filed with the Register of
Deeds of Manila prior to the sale in favor of Alto Surety, Evangelista did not
acquire thereby a preferential lien, the attachment having been levied as if the
house in question were immovable property.
Issue:
Whether or not a house constructed by the lessee of the land on which it is built,
should be dealt with, for purpose of attachment, as immovable property?
Held:
The court ruled that the house is not personal property, much less a debt, credit
or other personal property not capable of manual delivery, but immovable
property. As held in Laddera vs. Hodges (48 OG 5374), "a true building is
immovable or real property, whether it is erected by the owner of the land or by a
usufructuary or lessee. The opinion that the house of Rivera should have been
attached, as "personal property capable of manual delivery, by taking and safely
keeping in his custody", for it declared that "Evangelista could not have validly
purchased Ricardo Rivera's house from the sheriff as the latter was not in
possession thereof at the time he sold it at a public auction is untenable. Parties
to a deed of chattel mortgage may agree to consider a house as personal
property for purposes of said contract. However, this view is good only insofar as
the contracting parties are concerned. It is based, partly, upon the principle of
estoppel. Neither this principle, nor said view, is applicable to strangers to said
contract. The rules on execution do not allow, and should not be interpreted as to
allow, the special consideration that parties to a contract may have desired to
impart to real estate as personal property, when they are not ordinarily so. Sales
on execution affect the public and third persons. The regulation governing sales
on execution are for public officials to follow. The form of proceedings prescribed

for each kind of property is suited to its character, not to the character which the
parties have given to it or desire to give it. The regulations were never intended
to suit the consideration that parties, may have privately given to the property
levied upon. The court therefore affirms the decision of the CA with cost against
Alto Surety.
------DAVAO SAW MILL CO. VS. CASTILLO
61 SCRA 709

FACTS:
Petitioner is the holder of a lumber concession. It operated a sawmill on a land,
which it doesnt own. Part of the lease agreement was a stipulation in which after
the lease agreement, all buildings and improvements would pass to the
ownership of the lessor, which would not include machineries and accessories.
In connection to this, petitioner had in its sawmill machineries and other
equipment wherein some were bolted in foundations of cement.

HELD:
The machinery must be classified as personal property.

The lessee placed the machinery in the building erected on land belonging to
another, with the understanding that the machinery was not included in the
improvements which would pass to the lessor on the expiration of the lease
agreement. The lessee also treated the machinery as personal
property in executing chattel mortgages in favor of third persons. The
machinery was levied upon by the sheriff as personalty pursuant to a writ of
execution obtained without any protest being registered.

Furthermore, machinery only becomes immobilized when placed in a plant by the

owner of the property or plant, but not when so placed by a tenant, usufructuary,
or any person having temporary right, unless such person acted as the
agent of the owner.
----BOARD OF ASSESSMENT APPEALS V. MANILA ELECTRIC COMPANY
10 SCRA 68

FACTS:
City Assessor of QC declared the steel towers for real property tax under Tax
Declarations. After denying the respondents petition to cancel these
declarations, an appeal was taken with the CTA which held that the steel towers
come under the exception of poles under the franchise given to
MERALCO; the steel towers are personal properties; and the City Treasurer is
liable for the refund of the amount paid.

HELD:
The steel towers of an electric company dont constitute real property for the
purposes of real property tax.
---SERGS PRODUCTS AND GOQUIOLAY V. PCI LEASING AND FINANCE

338 SCRA 499

FACTS:
PCI filed a case for collection of a sum of money as well as a writ of
replevin for the seizure of machineries, subject of a chattel mortgage
executed by petitioner in favor of PCI.

Machineries of petitioner were seized and petitioner filed a motion for

special protective order. It asserts that the machineries were real property and
could not be subject of a chattel mortgage.

HELD:
The machineries in question have become immobilized by destination
because they are essential and principal elements in the industry, and thus have
become immovable in nature.

Nonetheless, they are still proper subjects for a chattel mortgage.

Contracting parties may validly stipulate that a real property be considered as

personal. After agreement, they are consequently estopped from claiming
otherwise.

----1
Roxas v. CA
MELANIA A. ROXAS, petitioner, vs. THE HON. COURT OF APPEALS and ANTONIO M.
CAYETANO, respondents.
G.R. No. 92245, 26 June 1991.
PARAS, J.:
Petitioner Melania Roxas ("Melania") is married to Antonio Roxas ("Antonio"),
although they are already estranged and living separately.
Melania discovered that Antonio leased to Respondent Antonio Cayetano ("Mr.
Cayetano") their conjugal lot in Novaliches without her knowledge and consent.
Thus, Melanie filed a case before the RTC praying for the annulment of the
contract of lease between Antonio and Mr. Cayetano.
Mr. Cayetano moved to dismiss the complaint on the sole ground that the
complaint states no cause of action.
The RTC Judge resolved said Motion by dismissing Melania's complaint.
ISSUE: W/N a husband, may legally enter into a long-term contract of lease
involving conjugal real property without the consent of the wife.
Ruling: No. (Case remanded to the RTC by the SC)
Even if the husband is administrator of the conjugal partnership, administration

does not include acts of ownership. For while the husband can administer the
conjugal assets unhampered, he cannot alienate or encumber the conjugal realty.
As stated in Black's Law Dictionary, the word "alienation" means "the transfer of
the property and possession of lands, tenements, or other things from one person
to another ... The act by which the title to real estate is voluntarily assigned by
one person to another and accepted by the latter, in the form prescribed by law."
While encumbrance "has been defined to be every right to, or interest in, the
land which may subsist in third persons, to the diminution of the value of the
land, but consistent with the passing of the fee by the conveyance; any (act) that
impairs the use or transfer of property or real estate..."
The pivotal issue in this case is whether or not a lease is an encumbrance and/or
alienation.
Under Art. 1643 of the New Civil Code "In the lease of things, one of the parties
binds himself to give to another the enjoyment or use of a thing for a price
certain, and for a period which may be definite or indefinite...." Thus, lease is a
grant of use and possession: it is not only a grant of possession.
In the contract of lease, the lessor transfers his right of use in favor of the lessee.
The lessor's right of use is impaired, therein. He may even be ejected by the
lessee if the lessor uses the leased realty.
Therefore, lease is a burden on the land, it is an encumbrance on the land. The
concept of encumbrance includes lease, thus "an encumbrance is sometimes
construed broadly to include not only liens such as mortgages and taxes, but also
attachment, LEASES, inchoate dower rights, water rights, easements, and other
RESTRICTIONS on USE."
Moreover, lease is not only an encumbrance but also a qualified alienation, with
the lessee becoming, for all legal intents and purposes, and subject to its terms,
the owner of the thing affected by the lease.
Thus, in case the wife's consent is not secured by the husband as required by
law, the wife has the remedy of filing an action for the annulment of the contract.
-------HEIRS OF SORIANO V. CA and SPOUSES ABALOS
A person may be declared the owner of a property but he may not be entitled to
possession.The exercise of the rights of ownership is subject to limitations that

may be imposed by law. Although declared to be the lawful owner, such owner
cannot automatically evict the physical possessor of the land unless it has been
determined that no rights of the possessor will be violated by such eviction.

FACTS:
A piece of land located in Lingayen, Pangasinan is the disputed property in this
case. Said land was originally owned by one Adriano Soriano, subsequently it was
leased for a period of 15 years to the Spouses David and Consuelo with RAMON
SORIANO, son of Adriano and herein petitioner, acting as caretaker/tenant of the
property during the duration of the lease. Upon the death of Adriano the lot he
owned was divided into TWO and given to his heirs. One of the lots inherited was
sold to the Spouses ABALOS, here. The other lot was also bought by the Spouses
Abalos although not completely (only of the lot). The lots in question were
subsequently registered in the name of the Spouses Abalos. The courts later
declared them to be the undisputed owners thereof. Soriano questions their
ownership of the land and so filed cases against the spouses. Currently Soriano is
still in possession of the land claiming rights of Security of Tenure as a tenant of
the land.

ISSUE:
May a winning party in a land registration case effectively eject the possessor
thereof?

RULING/RATIO:
No. Possession and ownership are distinct legal concepts. Possession is the
holding of a thing or the enjoyment of a right. Literally, to possess means to
actually and physically occupy a thing with or without right. A judgment of
ownership does not necessarily include possession as a necessary incident. Such
declaration pertains only to OWNERSHIP and does not automatically include
possession. This is especially true in the case at bar wherein petitioner is
occupying the land allegedly in the concept of an agricultural tenant. The court
says allegedly due to the fact that there is still a pending case in the DARAB
(Department of Agrarian Reform and Adjudication Board) on the issue. The issue
of ownership of the subject land has been laid to rest by final judgment; however
the right of possession is yet to be resolved. The Tenancy Act, which protects the

rights of agricultural tenants, may limit the exercise of rights by the lawful
owners. The exercise of the rights of ownership yields to the exercise of the rights
of an agricultural tenant. Since the rights of Soriano to possess the land are still
pending litigation in the DARAB he is protected from dispossession of the land
until final judgment of said court unless Sorianos occupancy is found by the
court to be unlawful.
-------Custodio vs CA
Civil Law Torts and Damages Damnum Absque Injuria Actionable Wrong
Pacifico Mabasa owns a property behind the properties of spouses Cristino and
Brigida Custodio and spouses Lito and Ma. Cristina Santos. The passageway
leading to Mabasas house passes through the properties of the Custodios and
the Santoses.
Sometime in 1981, the spouses Lito and Ma. Cristina Santos built a fence around
their property. This effectively deprived Mabasa passage to his house. Mabasa
then sued the Custodios and the Santoses to compel them to grant his right of
way with damages. Mabasa claims that he lost tenants because of the blockade
done by the families in front. The trial court ruled in favor of Mabasa. It ordered
the Custodios and the Santoses to give Mabasa a permanent easement and right
of way and for Mabasa to pay just compensation. The Santoses and the Custodios
appealed. The Court of Appeals affirmed the decision of the trial court. However,
the CA modified the ruling by awarding damages in favor of Mabasa (Actual
damages: P65k, Moral damages: P30k, Exemplary damages: P10k).
ISSUE: Whether or not the grant of damages by the CA is proper.
HELD: No. The award is not proper. This is an instance of damnum absque injuria.
There is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the loss, hurt, or harm which results from the
injury; and damages are the recompense or compensation awarded for the
damage suffered. Thus, there can be damage without injury in those instances in
which the loss or harm was not the result of a violation of a legal duty.
In this case, it is true that Mabasa may have incurred losses (damage) when his
tenants left because of the fence made by the Santoses. However, when Santos
built the fence, he was well within his right. He built the fence inside his property.
There was no existing easement agreement, either by contract or by operation of
law, on his property. Hence, Santos has all the right to build the fence. It was only

after the judgment in the trial court that the easement was created which was
even conditioned on the payment of Mabasa of the just compensation. Santos did
not commit a legal injury against Mabasa when he built the fence, therefore,
there is no actionable wrong as basis for the award of damages. In this case, the
damage has to be borne by Mabasa.
----GARCIA VS CA 1999
FACTS: In 1981, a lot was registered and sold by Pedro Garcia to the Magpayo
spouses.The Magpayos mortgaged the land to the Philippine Bank of Commerce
(PBCom). Thespouses failed to pay, hence, the mortgage was extra-judicially
closed. The petition filed byPBCom for the issuance of the writ of possession was
granted, however, upon service of thewrit of possession, Mrs. Magpayos brother,
Jose Garcia, who was in possession of theland, refused to honor it and filed a
motion for intervention. He alleged that he inherited theland as one of the heirs
of his mother.The lower court held that the mortgage was void but, upon appeal,
CA reversed itsdecision. Petitioner appealed to the SC and raised, as one of the
errors, that CA decided thecase based on issues not raised in the trial court nor in
the appellants brief.
Issue:
Did the Court of Appeals err in resolving the issues of ownership
andpossession?
Held:
No. PBComs appellate brief alleged that the trial court could not
distinguishownership from possession; that plaintiff- appellees possession could
not ripen intoownership; that he was an intruder in bad faith and his possession is
certainly not in theconcept of an owner.We stress again that the possession and
ownership are distinct legal concepts.Ownership exists when a thing pertaining to
one person is completely subjected to his will ina manner not prohibited by law
and consistent with the rights of others. Ownership confers certain rights to the
owner, one of which is the right to dispose of the thing by way of sale.Pedro
Garcia and his wife exercised their right to dispose of what they owned when
theysold the subject property to the Magpayo spouses.On the other hand,
possession is defined as the holding of a thing or the enjoymentof a right.
Literally, to possess means to actually and physically occupy a thing with or
without right. Possession may be had in one of two ways: possession in the
concept of anowner and possession of a holder. A possessor in the concept of an
owner may be theowner himself or one who claims to be so. On the other hand,
one who possesses as amere holder acknowledges in another a superior right
which he believes to be ownership,whether his belief is right or wrong. The
records show that petitioner occupied the propertynot in the concept of an owner
for his stay was merely tolerated by his parents.
------

GEMINIANO v. CA
Lessor in good faith and Builders in Good faith are not synonymous. Article 1678
may apply to the formers case and Art 448 may apply to the latters case. If a
person knew that his stay would likely end or that he knew somehow that he is
not the owner of the land then he is not a BPS in good faith.

FACTS:
The lot in question was originally owned by the mother of the petitioner.
Petitioner sold their unfinished bungalow to the respondents for P6,000, with a
promise to sell the lot to the latter. The property was later leased to the
respondents for 7 years starting November 1978 for P40 a month as evidenced
by their written lease contract. The respondents built their house and introduced
some improvements in the lot. In 1985 petitioners mother refused receiving
monthly rentals. It turned out that the lot in question was subject to litigation
which resulted to its acquisition by Maria Lee which was sold to Salcedo, who
further sold to Dionisio spouses. The property eventually came back to the
petitioner when the Dinisio spouses executed a Deed of Quitclaim over the said
property in favor of the petitioners. As such, the lot was registered in the latters
names. (petitioners never lost possession of the land because Lee and company
never issued a writ of possession against them).

In 1993, petitioners wrote a letter to respondents demanding them to vacate the

premises and when the latter refused, petitioners filed in court. Respondents
claim that they should be entitled to buy the land because of the promise of the
petitioners to sell them the land and because they were builders in Good faith.
The courts now are deciding which one to use: Art. 448 regarding builders and
land owners in good faith or Art. 1678 regarding lessee in good faith who can be
reimbursed half of the expenses of the improvements if the LO chooses to
appropriate them and that such lessee have the right to retain in the premises
until fully reimbursed.
ISSUES:
1) Whether or not the respondents were builders in Good faith?
2) Whether Art 448 or 1678 should be applied?

RULING:
1) No, they were not builders in good faith. The respondents knew that their stay
would end after the lease contract expires. They cant bank on the promise,
which was not in writing, of the petitioners that the latter will sell the land to
them. According to 1403, an agreement for the sale of real property or an interest
therein is unenforceable, unless some note or memorandum thereof be produced.
Other than the alleged promise by petitioner, respondents had no other evidence
to prove their claim.

2) They are mere lessees in good faith; therefore Art 1678 may apply if the lessor
chooses to appropriate the improvements. But since the petitioners refused to
exercise that option, the private respondents cant compel them to reimburse the
one-half value of the house and improvements. Neither can they retain the
premises until reimbursement is made. The private respondents sole right then
is to remove the improvements without causing any more impairment upon the
property leased than is necessary.
-----Kilario v. CA
G.R. No. 134329. January 19, 2000
Respondent Silverio Pada filed an ejectment case against sps. Kilario. The latter
occupies a portion of the intestate estate of Jacinto Pada, Grandfather of Silverio.
The
Kilarios have been living therein since 1960 by sheer tolerance. When Jacinto
Pada
dies, his heirs entered into extrajudicial partition of his estate in 1951. As a result
thereof, lot 5581 was allocated to Ananias and Marciano who became co-owners
of said
lot.
Ananias died and his daughter succeeded in his right as co-owner. Eventually,
Juanita sold her right in the co-ownership to Engr. Paderes. Mariaon the other
hand,
heir of Marciano, sold her share to her cousin respondent Silverio Pada. The latter

demanded sps. Kilario to vacate but the sps. refused.On June 1995, a complaint
for
ejectment was filed against sps. Kilario. On July1995 a deed of donation in their
favor
was executed by heirs of Amador Pada.

ISSUE: Whether or not the partition was valid

The extrajudicial partition of the estate of Jacinto Pada among his heirs made in
1951 is valid, albeit executed in an unregistered private document. No law
requires
partition among heirs to be in writing and be registered in order to be valid. The
object of registration is to serve as constructive notice to others. It follows then
that the intrinsic validity of partition not executed with the prescribed formalities
is not undermined when no creditors are involved. Without creditors to take into
consideration, it is competent for the heirs of an estate to enter into an
agreement for distribution thereof in a manner and upon a plan different from
those provided by the rules from which, in the first place, nothing can be inferred
that a writing or other formality is essential for the partition to be valid. The
partition of inherited property need not be embodied in a public document so as
to be effective as regards the heirs that participated therein. The extrajudicial
partition which the heirs of Jacinto Pada executed voluntarily and spontaneously
in 1951 has produced a legal status. When they discussed and agreed on the
division of the estate of Jacinto Pada, it is presumed that they did so in
furtherance of their mutual interests. As such, their division is conclusive, unless
and until it is shown that there were debts existing against the estate which had
not been paid. No showing, however, has been made of any unpaid charges
against the estate of Jacinto Pada. Thus, there is no reason why the heirs should
not be bound by their voluntary acts.
The belated act of Concordia, Esperanza and Angelito, who are the heirs of
Amador Pada, of donating the subject property to petitioners after forty four (44)
years
of never having disputed the validity of the 1951 extrajudicial partition that
allocated the subject property to Marciano and Ananias, produced no legal effect.
The donation made by his heirs to petitioners of the subject property, thus, is
void for they were not the owners thereof. At any rate it is too late in the day for
the heirs of Amador Pada to

repudiate the legal effects of the 1951 extrajudicial partition as prescription and
laches have equally set in.Petitioners are estopped from impugning the
extrajudicial partition executed by the heirs of Jacinto Pada after explicitly
admitting in their Answer that they had been occupying the subject property
since 1960 without ever paying any rental as they only relied on the liberality and
tolerance of the Pada family. Their admissions are evidence of a high order and
bind them insofar as the character of their possession of the subject property is
concerned.