1. STANDARD OIL COMPANY vs.

JARAMILLO

On November 27, 1922, Gervasia de la Rosa was the lessee of a parcel of land situated in the City of Manila and
owner of the house of really tough materials built thereon. She executed that fine day a document in the form of
a chattel mortgage, purporting to convey to Standard Oil Company of New York (by way of mortgage) both the
leasehold interest in said lot and the building.

After said document had been duly acknowledged and delivered, Standard Oil presented it to Joaquin Jaramillo,
as register of deeds of the City of Manila, for the purpose of having the same recorded in the book of record of
chattel mortgages. Upon examination of the instrument, Jaramillo opined that it was not chattel mortgage, for the
reason that the interest therein mortgaged did not appear to be personal property, within the meaning of the
Chattel Mortgage Law, and registration was refused on this ground only.

Later this confusion was brought to the Supreme Court upon demurrer by Joaquin Jaramillo, register of deeds of
the City of Manila, to an original petition of the Standard Oil Company of New York, demanding a mandamus to
compel the respondent to record in the proper register a document purporting to be a chattel mortgage executed
in the City of Manila by Gervasia de la Rosa, Vda. de Vera, in favor of the Standard Oil Company of New York.

The Supreme Court overruled the demurrer, and ordered that unless Jaramillo interposes a sufficient answer to
the petition for mandamus by Standard Oil within 5 days of notification, the writ would be issued as prayed, but
without costs.

ISSUE:
w/n the Registry of Deeds can determine the nature of property to be registered.
w/n the Registry of Deeds has powers beyond Ministerial discretion.

RESOLUTION:

1.Jaramillo, register of deeds, does not have judicial or quasi-judicial power to determine nature of document
registered as chattel mortgage Section 198 of the Administrative Code, originally of Section 15 of the Chattel
Mortgage Law (Act 1508 as amended by Act 2496), does not confer upon the register of deeds any authority
whatever in respect to the "qualification," as the term is used in Spanish law, of chattel mortgages. His 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 existence of the contract, and the legal effects of the
contract must be discovered in the instrument itself in relation with the fact of notice.

2.Article 334 and 335 of the Civil Code does not supply absolute criterion on distinction between real and
personal property for purpose of the application of the Chattel Mortgage Law Article 334 and 335 of the Civil
Code supply no absolute criterion for discriminating between real property and personal property for purposes of
the application of the Chattel Mortgage Law. Those articles state rules which, considered as a general doctrine,
are law in this jurisdiction; but it must not be forgotten that under given conditions property may have character
different from that imputed to it in said articles. It is undeniable that the parties to a contract may be agreement
treat as personal property that which by nature would be real property; and it is a familiar phenomenon to see
things classed as real property for purposes of taxation which on general principle might be considered personal
property. Other situations are constantly arising, and from time to time are presented to the Supreme Court, in
which the proper classification of one thing or another as real or personal property may be said to be doubtful.]
 2. LEUNG YEE vs. FRANCO STRONG MACHINERY

In 1913, Compania Agricola Filipina (CAF) was indebted to two personalities: Leung Yee and Frank L. Strong
Machinery Co. CAF purchased some rice cleaning machines from Strong Machinery. CAF installed the machines in
a building. As security for the purchase price, CAF executed a chattel mortgage on the rice cleaning machines
including the building where the machines were installed. CAF failed to pay Strong Machinery, hence the latter
foreclosed the mortgage the same was registered in the chattel mortgage registry.

CAF also sold the land (where the building was standing) to Strong Machinery. Strong Machinery took possession
of the building and the land.

On the other hand, Yee, another creditor of CAF who engaged in the construction of the building, being the
highest bidder in an auction conducted by the sheriff, purchased the same building where the machines were
installed. Apparently CAF also executed a chattel mortgage in favor Yee. Yee registered the sale in the registry of
land. Yee was however aware that prior to his buying, the property has been sold in favor of Strong Machinery
evidence is the chattel mortgage already registered by Strong Machinery (constructive notice).

ISSUE: Who is the owner of the building?

HELD: The SC ruled that Strong Machinery has a better right to the contested property. Yee cannot be regarded as
a buyer in good faith as he was already aware of the fact that there was a prior sale of the same property to
Strong Machinery.

The SC also noted that the Chattel Mortgage Law expressly contemplates provisions for chattel mortgages which
only deal with personal properties. The fact that the parties dealt the building as if its a personal property does
not change the nature of the thing. It is still a real property. Its inscription in the Chattel Mortgage registry does
not modify its inscription the registry of real property.
 3. PRUDENTIAL BANK vs. PANIS

Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage
over a residential building. The mortgage included also 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. After securing the first loan, the
spouses secured another from the same bank. To secure payment, another real estate mortgage was executed
over the same properties.

The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged
to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in
public auction despite opposition from the spouses. The respondent court held that the REM was null and void.

HELD:
A real estate mortgage can be constituted on the building erected on the land belonging to another. The inclusion
of building distinct and separate from the land in the Civil Code can only mean that the building itself is an
immovable property.

While it is true that a mortgage of land necessarily includes in the absence of stipulation of the improvements
thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is built. Such
a mortgage would still be considered as a REM for the building would still be considered as immovable property
even if dealt with separately and apart from the land.

The original mortgage on the building and right to occupancy of the land was executed before the issuance of the
sales patent and before the government was divested of title to the land. Under the foregoing, it is evident that
the mortgage executed by private respondent on his own building was a valid mortgage. As to the second
mortgage, it was done after the sales patent was issued and thus prohibits pertinent provisions of the Public Land
Act.
 4. BICERRA vs. TENEZA

FACTS: The Bicerras are supposedly the owners of the house worth P200, built on a lot owned by them in
Lagangilang, Abra; which the Tenezas forcibly demolished in January 1957, claiming to be the owners thereof. The
materials of the house were placed in the custody of the barrio lieutenant. The Bicerras filed a complaint claiming
actual damages of P200, moral and consequential damages amounting to P600, and the costs. The CFI Abra
dismissed the complaint claiming that the action was within the exclusive (original) jurisdiction of the Justice of
the Peace Court of Lagangilang, Abra.

ISSUE:
W/N the action involves title to real propety.
W/N the dismissal of the complaint was proper.

HELD:
The Supreme Court affirmed the order appealed. Having been admitted in forma pauperis, no costs were
adjudged.

1. House is immovable property even if situated on land belonging to a different owner; Exception, when
demolished. A house is classified as immovable property by reason of its adherence to the soil on which it is built
(Article 415, paragraph 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.

2. Recovery of damages not exceeding P2,000 and involving no real property belong to the Justice of the Peace
Court. The complaint is for recovery of damages, the only positive relief prayed for. Further, a declaration of being
the owners of the dismantled house and/or of the materials in no wise constitutes the relief itself which if granted
by final judgment could be enforceable by execution, but is only incidental to the real cause of action to recover
damages. As this is a case for recovery of damages where the demand does not exceed PhP 2,000 and that there
is no real property litigated as the house has ceased to exist, the case is within the jurisdiction of the Justice of the
Peace Court (as per Section 88, RA 296 as amended) and not the CFI (Section 44, id.)
 5. DAVAO SAWMILL vs. CASTILLO

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.

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.
 6. BERKENKOTTER vs. CU UNJIENG

On 26 April 1926, the Mabalacat Sugar Company obtained from Cu Unjieng e Hijos, a loan secured by a first
mortgage constituted on 2 parcels of land "with all its buildings, improvements, sugar-cane mill, steel railway,
telephone line, apparatus, utensils and whatever forms part or is a necessary complement of said sugar-cane mill,
steel railway, telephone line, now existing or that may in the future exist in said lots.On 5 October 1926, the
Mabalacat Sugar Company decided to increase the capacity of its sugar central by buying additional machinery
and equipment, so that instead of milling 150 tons daily, it could produce 250. Green proposed to the
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 the mortgagees, Cu Unjieng e Hijos, and that in
case Green should fail to obtain an additional loan from Cu Unjieng e Hijos, said machinery and equipment would
become security therefore, said Green binding himself not to mortgage nor encumber them to anybody until
Berkenkotter be fully reimbursed for the corporation's indebtedness to him.

Having agreed to said proposition made in a letter dated 5 October 1926, Berkenkotter, on 9 October 1926,
delivered the sum of P1,710 to Green, the total amount supplied by him to Green having beenP25,750.
Furthermore, Berkenkotter had a credit of P22,000 against said corporation for unpaid salary. With the loan of
P25,750 and said credit of P22,000, the Mabalacat Sugar Co., Inc., purchased the additional machinery and
equipment. On 10 June 1927, Green applied to Cu Unjieng e Hijos for an additional loan of P75,000 offering as
security the additional machinery and equipment acquired by said Green and installed in the sugar central after
the execution of the original mortgage deed, on 27 April 1927, together with whatever additional equipment
acquired with said loan. Green failed to obtain said loan. Hence, above mentioned mortgage was in effect.

Issue:
Are the additional machines also considered mortgaged?

Held:
Article 1877 of the Civil Code provides that mortgage includes all natural accessions, improvements,
growing fruits, and rents not collected when the obligation falls due, and the amount of any indemnities said or
due the owner by the insurers of the mortgaged property or by virtue of the exercise of the
power of eminent domain, with the declarations, amplifications, and limitations established by law, whether the
state continues in the possession of the person who mortgaged it
or whether it passes into the hands of a third person. It is a rule, that 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. Article
334, paragraph 5, of the Civil Code gives the character of real property to machinery, liquid containers,
instruments or implements intended by the owner of any building or land for use in connection with any industry
or trade being carried on therein and which are expressly adapted to meet the requirements of such trade or
industry. 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.
7. PEOPLES BANK AND TRUST vs. DAHICAN LUMBER

On September 8, 1948, Atlantic Gulf & Pacific Company of Manila, a West Virginia corporation licensed to do
business in the Philippines sold and assigned all its rights in the Dahican Lumber concession to Dahican Lumber
Company - hereinafter referred to as DALCO - for the total sum of $500,000.00, of which only the amount of
$50,000.00 was paid. Thereafter, to develop the concession, DALCO obtained various loans from the People's
Bank & Trust Company amounting, as of July 13, 1950, to P200,000.00. In addition, DALCO obtained, through the
BANK, a loan of $250,000.00 from the Export-Import Bank of Washington D.C., evidenced by five promissory
notes of $50,000.00 each, maturing on different dates, executed by both DALCO and the Dahican America Lumber
Corporation, a foreign corporation and a stockholder of DALCO, As security for the payment of the
abovementioned loans, on July 13, 1950 DALCO executed in favor of the BANK a deed of mortgage covering five
parcels of land situated in the province of Camarines Norte together with all the buildings and other
improvements existing thereon and all the personal properties of the mortgagor located in its place of business in
the municipalities of Mambulao and Capalonga, Camarines Norte. On the same date, DALCO executed a second
mortgage on the same properties in favor of ATLANTIC to secure payment of the unpaid balance of the sale price
of the lumber concession amounting to the sum of $450,000.00. Both deeds contained a provision extending the
mortgage lien to properties to be subsequently acquired by the mortgagor.

Both mortgages were registered in the Office of the Register of Deeds of Camarines Norte. In addition thereto
DALCO and DAMCO pledged to the BANK 7,296 shares of stock of DALCO and 9,286 shares of DAMCO to secure
the same obligation.

Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon its maturity, the BANK paid the same to
the Export-Import Bank of Washington D.C., and the latter assigned to the former its credit and the first mortgage
securing it. Subsequently, the BANK gave DALCO and DAMCO up to April 1, 1953 to pay the overdue promissory
note.

After July 13, 1950 - the date of execution of the mortgages mentioned above - DALCO purchased various
machineries, equipment, spare parts and supplies in addition to, or in replacement of some of those already
owned and used by it on the date aforesaid. Pursuant to the provision of the mortgage deeds quoted theretofore
regarding "after acquired properties," the BANK requested DALCO to submit complete lists of said properties but
the latter failed to do so. In connection with these purchases, there appeared in the books of DALCO as due to
Connell Bros. Company (Philippines) - a domestic corporation who was acting as the general purchasing agent of
DALCO -the sum of P452,860.55 and to DAMCO, the sum of P2,151,678.34.chan

On December 16, 1952, the Board of Directors of DALCO, in a special meeting called for the purpose, passed a
resolution agreeing to rescind the alleged sales of equipment, spare parts and supplies by CONNELL and DAMCO
to it. On January 13, 1953, the BANK, in its own behalf and that of ATLANTIC, demanded that said agreements be
cancelled but CONNELL and DAMCO refused to do so. As a result, on February 12, 1953; ATLANTIC and the BANK,
commenced foreclosure proceedings in the Court of First Instance of Camarines Norte against DALCO and
DAMCO.

Upon motion of the parties the Court, on September 30, 1953, issued an order transferring the venue of the
action to the Court of First Instance of Manila. On August 30, 1958, upon motion of all the parties, the Court
ordered the sale of all the machineries, equipment and supplies of DALCO, and the same were subsequently sold
for a total consideration of P175,000.00 which was deposited in court pending final determination of the action.
By a similar agreement one-half (P87,500.00) of this amount was considered as representing the proceeds
obtained from the sale of the "undebated properties" (those not claimed by DAMCO and CONNELL), and the
other half as representing those obtained from the sale of the "after acquired properties".

ISSUE: WON the "after acquired properties" were subject to the deeds of mortgage mentioned heretofore.
Assuming that they are subject thereto, WON the mortgages are valid and binding on the properties aforesaid
inspite of the fact that they were not registered in accordance with the provisions of the Chattel Mortgage Law.

HELD:

Under the fourth paragraph of both deeds of mortgage, it is crystal clear that all property of every nature and
description taken in exchange or replacement, as well as all buildings, machineries, fixtures, tools, equipments,
and other property that the mortgagor may acquire, construct, install, attach; or use in, to upon, or in connection
with the premises - that is, its lumber concession - "shall immediately be and become subject to the lien" of both
mortgages in the same manner and to the same extent as if already included therein at the time of their
execution. Such stipulation is neither unlawful nor immoral, its obvious purpose being to maintain, to the extent
allowed by circumstances, the original value of the properties given as security.

Article 415 does not define real property but enumerates what are considered as such, among them being
machinery, receptacles, instruments or replacements intended by owner of the tenement for an industry or works
which may be carried on in a building or on a piece of land, and shall tend directly to meet the needs of the said
industry or works. On the strength of the above-quoted legal provisions, the lower court held that inasmuch as
"the chattels were placed in the real properties mortgaged to plaintiffs, they came within the operation of Art.
415, paragraph 5 and Art. 2127 of the New Civil Code". In the present case, the characterization of the "after
acquired properties" as real property was made not only by one but by both interested parties. There is,
therefore, more reason to hold that such consensus impresses upon the properties the character determined by
the parties who must now be held in estoppel to question it.