QUIZ on PROPERTY

Assignment 1

1. Define Property.
- Under the Civil Code, property, considered as an object, is that which is, or may be,
appropriated.

Article 414. All things which are or may be the object of appropriation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property.

2. Differentiate movable to immovable property.

- Movable property refers to personal property, which is either consumable or
nonconsumable. On the other hand, immovable property refers to roads, constructions and
buildings. They are referred to as immovable because they adhere to the soil.

3. Why is there a need to differentiate immovable to movable property?

- The classification of property into immovables or movables does not assume its importance
from the fact of mobility or non-mobility, but from the fact that different provisions of the law
govern the acquisition, possession, disposition, loss, and registration of immovables and
movables.

4. What are the classifications of immovable property? Classify the immovable property
enumerated in Article 415 according to this.
-The following are immovable properties:
a. Land, buildings, roads and constructions of all kinds adhered to the soil;
b. Trees, plants and growing fruits, while they are attached to the land or form an integral
part of an immovable;
c. Everything attached to an immovable in a fixed manner in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object;
d. Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or
on lands by the owner of the immovable in such a manner that it reveals the intention to
attach them permanently to the tenements;
e. Machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or on a piece of
land, and which tend directly to meet the needs of the said industry or works;
f. Animal houses, pigeon-houses,
g. Beehives, fishponds or breeding places of similar nature, in case their owner has placed or
preserved them, with the intention to have them permanently attached to the land, and
forming a permanent part of it; the animals in those places are included;
h. Fertilizer actually used on a piece of land;
i. Mines, quarries and slag dumps, while the matter thereof forms part of the bed, and
waters either running or stagnant;
j. Docks and structures which, though floating, are intended by their nature and object to
remain at a fixed place on a river, lake or coast; and
k. Contracts for public works, and servitudes and other real rights over immovable property

5. Classify property as when such belongs. Briefly discuss each class.

-Classes of Immovable or real property:
1. Real by nature – it cannot be carried from place to place (pars. 1 & 8, Art. 415, Civil
Code)
2. Real by incorporation – attached to an immovable in a fixed manner to be an
integral part thereof (pars. 1-3 Art. 415, Civil Code)
3. Real by destination – placed in a n immovable for the utility it gives to the activity
carried thereon (pars. 4-7 and 9 Art. 415, Civil Code)
4. By analogy it is so classified by express provision of law (par. 10, Art. 415, Civil Code)
6. Identify the relevant issues and jurisprudence of the following cases:
a. Prudential Bank v. Panis, 153 SCRA 390 (1980)
Issues: Whether or not a real estate mortgage over a building erected on the land
belonging to another is valid.
Jurisprudence: Building separate and distinct from the land. In the enumeration of
properties under Article 415 of the Civil Code of the Philippines, it is obvious that the
inclusion of 'building' separate and distinct from the land, in said provision of law can only
mean that a building is by itself an immovable property. A mortgage of land necessarily
includes buildings unless otherwise stipulated. A building by itself, however, may be
mortgaged apart from the land on which it has been built. Such a mortgage would still
be a real estate mortgage for the building alone would still be considered an immovable
property.

b. Board of Assessment Appeals vs. Manila Electric Company, 10 SCRA 68

Issue: Whether or not the transformers, electric posts (or poles), transmission lines,
insulators, and electric meters are real properties, so that they can be subject to real
property tax.

Jurisprudence: Steel towers are not immovable property under paragraph 1, 3 and 5. The
steel towers or supports do not come within the objects mentioned in paragraph 1,
because they do not constitute buildings or constructions adhered to the soil. They are
not constructions analogous to buildings nor adhering to the soil. They cannot be
included under paragraph 3, as they are not attached to an immovable in a fixed
manner, and they can be separated without breaking the material or causing
deterioration upon the object to which they are attached. These steel towers or supports
do not also fall under paragraph 5, for they are not machineries, receptacles, instruments
or implements, and even if they were, they are not intended for industry or works on the
land. As per description, given by the lower court, they are removable and merely
attached to a square metal frame by means of bolts, which when unscrewed could
easily be dismantled and moved from place to place.

c. Manila Securities Industrial Corp. vs. CBIAA, 114 SCRA 261 (1982)
Issue: Whether or not Meralco’s pipeline is a real property subject to realty tax.

Jurisprudence: Pipeline means a line of pipe connected to pumps, valves and control
devices for conveying liquids, gases or finely divided solids. It is a line of pipe running
upon or in the earth, carrying with it the right to the use of the soil in which it is placed.
Article 415[l] and [3] provides that real property may consist of constructions of all kinds
adhered to the soil and everything attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the material or
deterioration of the object. The pipeline system in question is indubitably a construction
adhering to the soil. It is attached to the land in such a way that it cannot be separated
therefrom without dismantling the steel pipes which were welded to form the pipeline.
Insofar as the pipeline uses valves, pumps and control devices to maintain the flow of oil,
it is in a sense machinery within the meaning of the Real Property Tax Code.
d. Sibal vs. Valdez, 50 Phil. 512, 524 (1927)
Issue: Whether or not the sugarcane in question is a personal or real property.

Jurisprudence: Paragraph 2, Article 334 of the Civil Code interpreted by the Tribunal
Supremo de Espana as that growing crops may be considered as personal property.
Sugar cane may come under the classification of real property as "ungathered products"
in paragraph 2 of article 334 of the Civil Code, which enumerates as real property as
"Trees, plants, and ungathered products, while they are annexed to the land or form an
integral part of any immovable property." That article, however, has received in recent
years an interpretation by the Tribunal Supremo de España, which holds that, under
certain conditions, growing crops may be considered as personal property. (Decision of
March 18, 1904, vol. 97, Civil Jurisprudence of Spain.) Thus, under Spanish authorities,
pending fruits and ungathered products may be sold and transferred as personal
 property. Also, the Supreme Court of Spain, in a case of ejectment of a lessee of an
agricultural land, held that the lessee was entitled to gather the Products corresponding
to the agricultural year because said fruits did not go with the land but belonged
separately to the lessee. And further, under the Spanish Mortgage Law of 1909, as
amended, the mortgage of a piece of land does not include the fruits and products
existing thereon, unless the contract expressly provides otherwise.

e. Tsai vs. CA, 366 SCRA 324 (2001)

Issue: Whether or not the foreclosure on after acquired properties of EVERTEX is valid.

Jurisprudence: Inasmuch as the subject mortgages were intended by the parties to

involve chattels, insofar as equipment and machinery were concerned, the Chattel
Mortgage Law applies, which provides in Section 7 thereof that: “a chattel mortgage
shall be deemed to cover only the property described therein and not like or substituted
property thereafter acquired by the mortgagor and placed in the same depository as
the property originally mortgaged, anything in the mortgage to the contrary
notwithstanding.” And, since the disputed machineries were acquired in 1981 and could
not have been involved in the 1975 or 1979 chattel mortgages, it was consequently an
error on the part of the Sheriff to include subject machineries with the properties
enumerated in said chattel mortgages. As the auction sale of the subject properties to
PBCom is void, no valid title passed in its favor. Consequently, the sale thereof to Tsai is
also a nullity under the elementary principle of nemo dat quod non habet, one cannot
give what one does not have.

f. Davao Sawmill vs. Castillo, 61 Phil. 709

Issue: Whether or not the machines are personal property.

Jurisprudence: Standard Oil ruling key to issue on the character of the property. It must
be pointed out that Davao Sawmill should have registered its protest before or at the
time of the sale of this property. It must further be pointed out that while not conclusive,
the characterization of the property as chattels by Davao Sawmill is indicative of
intention and impresses upon the property the character determined by the parties. In
this connection the decision of the court in the case of Standard Oil vs. Jaramillo,
whether obiter dicta or not, furnishes the key to such a situation.

Immobilization of machinery; when placed in plant by owner. Machinery which is

movable in its nature only becomes immobilized when placed in a plant by the owner of
the property or plant, 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. The
distinction rests upon the fact that one only having a temporary right to the possession or
enjoyment of property is not presumed by the law to have applied movable property
belonging to him so as to deprive him of it by causing it by an act of immobilization to
become the property of another.

g. Hongkong and Shanghai Bank vs. Aldecoa, 30 Phil. 255

Issue: Whether or not the action filed by the bank should be dismissed on the ground of
lis pendens.

Jurisprudence: Court has jurisdiction as bank does not seek to exercise mortgage right
on real properties in the provinces. The bank is not seeking to exercise its mortgage rights
upon the mortgages which the defendant firm holds upon certain real properties in the
Provinces of Albay and Ambos Camarines and to sell these properties at public auction
in these proceedings; nor does the judgment of the trial court directs that this be done.
Before that property can be sold the original mortgagors will have to be made parties.
The bank is not trying to foreclose any mortgages on real property executed by Aldecoa
& Co. A plea of the pendency of a prior action is not available unless the prior action is
of such a character that, had a judgment been rendered therein on the merits, such a
judgment would be conclusive between the parties and could be pleaded in bar of the
second action.