1.
Associated Ins and Surety vs Iya
 Valino spouses owned a house and to enable her to
purchase on credit rice from NARIC, Lucia Valino
executed a chattel mortgage over the house in
favour of Assoc Ins and Surety
 At the time of the undertaking the parcel of land on
which the house was erected is still registered on the
name of the name of Phil Realty Corporation but
later on due to the full payment of the lot, the
Valinos secured TCT
 To secure payment for their debt of 12k, they
executed a real estate mortgage over the house and
lot in favour of Isabel Iya.
 The surety company paid the credit of the Valinos to
NARIC. Demand reimbursement, failed to pay.
Foreclosed the mortgage over the house and
awarded to them the house in a public auction.
 The surety company learned of the real estate
mortgage over the house and lot and filed a case for
the exclusion of the house.
 Isabel Iya in her reply said that she has a real right
over the house and lot by virtue of the real estate
mortgage executed by the Valinos and the auction
sale was invalid.
 The surety company contended that since the lot
was not yet owned by the Valinos during the
execution of the chattel mortgage, the house was
then only a personal property.
 The spouses Valino admitted the mortgage of the
land in favour of Iya but assailed that the building
was included thereon.
 The lower court ruled that the chattel mortgage
executed in favour of the surety company was
preferred and superior over the real estate mortgage
executed in favour of Isabel Iya. It was ruled that as
the Valinos were not yet the registered owner of the
land at the time the contract with Isabel Iya was
entered into, the building was transformed into a
real property and the real estate mortgage was
deemed proper.
 The SC ruled that “while it is true that generally, real
estate connotes the land and the building
constructed thereon, it is obvious that the inclusion
of the building, separate and distinct from the land,
in the enumeration of what may constitute real
properties could only mean one thing—that a
building is by itself an immovable property…
Moreover, and in view of the absence of any specific
provision to the contrary, a building is an immovable
property irrespective of whether or not said
structure and the land on which it is adhered to
belong to the same owner. (Lopez vs. Orosa)
 A building certainly cannot be divested of its
character of a realty by the fact that the land on
which it constructed belongs to another. To hold it
the other way, the possibility is not remote that it
would result in confusion, for to cloak the building
with an uncertain status made dependent on the
ownership of the land, would create a situation
where a permanent fixture changes its nature or
character as the ownership of the land changes
hands.
 In the case at bar, as personal properties could only
be the subject of a chattel mortgage and as
obviously the structure in question is not one, the
execution of the chattel mortgage covering said
building is clearly invalid and a nullity. While it is true
that said document was correspondingly registered
in the Chattel Mortgage Register of Rizal, this act
produced no effect whatsoever for where the
interest conveyed is in the nature of a real property,
the registration of the document in the registry of
the chattel mortgage is merely a futile act.
2. Tumalad vs Vicencio
 Defendants executed a chattel mortgage in favour of
plaintiffs over their house to guarantee a loan worth
4800.
 Defendant failed to pay and the mortgage was
judicially foreclosed
 They were ordered to vacate the house after it was
sold in a public auction
 The defendants questioned the validity of the sale
and contended that the subject matter of the
mortgage is a house of strong materials, and being
an immovable, it can only be the subject of a real
estate mortgage and not a chattel mortgage
 The Court ruled that it is a settled jurisprudence that
the “view that parties to a deed of chattel mortgage
may agree to consider a house as personal property
for the purposes of a contract, “is good only insofar
as the contracting parties are concerned. It is based,
partly, upon the principle of estoppel”. Hence, if a
house belonging to a person stands on a rented land
belonging to another person, it may be mortgaged as
a personal property as so stipulated in the document
of mortgage. It should be noted, however that the
principle is predicated on statements by the owner
declaring his house to be a chattel, a conduct that
may conceivably estop him from subsequently
claiming otherwise.
 In the contract before Us, the house on the rented
land is not only expressly designated as Chattel
Mortgage; it is specifically provides that “the
mortgagor…voluntarily cedes, sells, and transfers by
way of Chattel Mortgage the property together with
its leasehold rights over the lot on which it is
constructed and participation..”. Although there is
no specific statements referring to the subject house
as personal property, yet by ceding, selling, or
transferring a property by way of chattel mortgage
defendants-appelants could only have meant to
convey the house as chattel, or at least, intended to
treat the same as such, so that they should not now
be allowed to make an inconsistent stand by
claiming otherwise.
 Moreover, the subject house stood on a rented lot to
which defendants-appelant merely had a temporary
right as lessee, and although this can not in itself
alone determine the status of the property, it does
so when combined with other factors to sustain the
interpretation that the parties, particularly the
mortgagors, intended to treat the house as
personalty.
3. Standard Oil Company vs Jaramillo
 Before the Court is a petition seeking a peremptory
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
 Gervasia Dela Rosa executed a chattel mortgage
over a house and lot and presented said document
to defendant.
 Defendant refused to register the same for it was
not a chattel mortgage because it does not fall
within the meaning of the Chattel Mortgage Law.
 The Court ruled that the position taken by the
defendant is untenable; and it is his duty to accept
the proper fee and place the instrument on record.
The duties of a register of deeds in respect to the
registration of chattel mortgage are of a purely
ministerial character; and no provision of law can be
cited which confers upon him any judicial or quasi-
judicial power to determine the nature of any
document of which registration is sought as a chattel
mortgage.
4. Prudential Bank vs. Judge Panis
 Before the Court is a petition for review on certiorari
of the decision of the CFI declaring the deeds of real
estate mortgage executed by respondent spouses in
favour of the petitioner bank are null and void
 As to the original mortgage, they mortgaged a 2-
storey, semi-concrete residential building which
includes the occupancy of the lot.
 However, during the pendency of the mortgage, the
Sec of Agriculture issued a Sales Patent over the
parcel of land in favour of the defendants. And there
after executed another mortgage over the same
properties.
 Due to their failure to pay obligation, foreclosed.
Sold during an auction
 Respondent Judge declared the deeds of real estate
mortgage
 Issue: Whether or not a valid real estate mortgage
can be constituted on the building erected on the
land belonging to another.
 The Court ruled in affirmative.
 “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.”
 Thus, while it is true that a mortgage of land
necessarily includes, in the absence of stipulation of
the improvements thereon, still buildings by itself
may be mortgaged apart from the land on which it
has been built. Such mortgage would still be a real
mortgage for the building would still be considered
immovable property even if dealt with separately
and apart from the land. In the same manner, this
Court has also established that possessory rights
over said properties before title is vested on the
grantee, may be validly transferred or conveyed as in
a deed of mortgage
 As to the original mortgage deed on 2-storey
building, it was issued before the issuance of the
Sales Patent in the name of the private respondent
Magcale. Under the foregoing considerations, it is
evident that the mortgage executed by private
respondent on his own building which was erected
on the land belonging to the government is to all
intents and purposes a valid mortgage.
 As to the second mortgage over the same
properties, it was executed after the issuance of the
sales patent and of the OCT was null and void
because it falls squarely under the prohibition of the
Public Land Act.
5. Mindanao Bus vs City Assessor
 Before the Court is a petition assailing the decision
of CTA holding petitioner liable for real estate tax on
its maintenance and repair equipment
 Petitioner contends that the properties subject to
real estate tax are movable properties and not realty
 The Court ruled in favour of the petitioner: “So that
movable equipments to be immobilized in
contemplation of the law must first be “essential and
principal elements” of an industry or works without
which such industry or works would be “unable to
function or carry on the industrial purpose for which
it was established”. We may here distinguish,
therefore, those movable which become
immobilized by destination because they are
essential and principal elements in the industry for
those which may not be so considered immobilized
because they are merely incidental, not essential and
principal.
 Similarly, the tools and equipment in question in this
instant case, by their nature, not essential and
principal municipal elements of petitioner’s business
of transporting passengers and cargoes by motor
trucks. They are merely incidentals—acquired as
movables and used only for expediency to facilitate
and/or improve its service. Even without such tools
and equipments, its business may be carried on,
without such tools and equipment, before the war.
The transportation business could be carried on
without the repair or service shop if its rolling
equipment is repair or service shop it its rolling
equipment is repaired or serviced in another shop
belonging to another.
 The equipment in question are destined only to
repair or service the transportation business, which
is not carried on in a building or permanently on a
piece of land, as demanded by the law. Said
equipment may not, therefore, be deemed real
property.
6. Sibal vs Valdez
 Before the Court is a petition assailing the sheriff’s
attachment of the sugar cane planted by the plaintiff
and his tenants on seven parcel of lands.
 The said lands were sold to defendant and petitioner
offered to redeem said sugarcanes planted on the
said lands.
 Defendant refused to accept the offer and claimed
that the sugarcanes are personal property and not
subject to redemption
 The Court ruled that generally, ungathered fruits
form an integral part of an immovable; however, for
the purposes of attachment and execution, and for
the purposes of Chattel Mortgage Law, ungathered
fruits have the nature of personal property.
7. Davao Sawmill vs Castillo
 The Davao Sawmill is the holder of a lumber
conscession from the Govt
 The land where the building was erected is owned by
another person and stipulated on their agreement
that after the expiration period, all the buildings and
improvements introduced therein will be transferred
to the ownership of the owner of the land. The
accessories and the machineries are not included.
 The trial court judge found that the properties in
question were personal properties and are not part
of the properties to be levied.
 The Court ruled that the machineries in question are
“machineries 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”.
 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.
8. Manila Electric Co vs Central Board of Assessment
Appeals
 This case is about the imposition of the realty tax on
two oil storage tanks installed in 1969 by Manila
Electric Company on a lot in Batangas which they
leased from Caltex. They are used for storing fuel oil
for Meralco’s powerplant.
 Meralco contends that the tanks were not attached
to its foundation and are not one of those real
properties enumerated in Article 415, thus not
subject to realty tax.
 The Board concludes that while the tanks rest or sit
on their foundation, the foundation itself and the
walls, dikes, and steps, which are integral parts of
the tanks are affixed to the land while the pipelines
are attached to the tanks. Meralco is required to pay
realty taxes on the two tanks.
 The Court ruled that the two storage tanks are not
embedded in the land, they may nevertheless, be
considered as improvements on the land, enhancing
its utility and rendering it useful to the oil industry. It
is undeniable that the two tanks have been installed
with some degree of performance as receptacles for
the considerable quantities of oil needed by Meralco
for its operations.
 Oil storage tanks were held to be taxable realty in
Standard Oil Co vs Atlantic City
9. Caltex Philippines vs Central Board of Assessment
 Petition assailing the decision of the Central Board of
Assessment classifying the machineries and
equipment of Caltex as personalty
 The City Assessor of Pasay classified them as taxable
realty and appealed before the CBA.
 The CBA affirmed the findings of the City Assessor
thus this petition filed by Caltex Philippines
 The issue has been resolved by the SC under the
provisions of the Assessment Law and the Real
Property Tax Code.
 The SC ruled that the said equipment, as
appurtenances to the gas station building or shed
owned by Caltex 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.
10. Board of Assessment Appeals vs Meralco
 Petition for review of a decision of the CTA declaring
the steel towers or poles of Meralco as personalty
 The City Assessor of QC declared the steel towers as
taxable realty.
 Respondents appealed before the Board of
Assessment Appeals. Uphold the cause of
respondents declaring the steel towers within the
term poles which are exempt from taxes under the
terms of respondents franchise
 The issue in this case whether they constitute real
properties, so that they can be subject to a real
property tax.
 The Court ruled that the steel towers do not fall
within the provisions of Article 415 of the Civil Code
as immovable property, therefore exempt from real
property tax.
11. Serg’s Products vs PCI Leasing
 Respondent applied before the Court a writ of
replevin for the seizure of the machineries and
equipment of petitioner
 Petitioner assailed the decision that the said
properties are real properties thus not subject for
seizure
 The Court ruled in favour of the defendant.
 The machineries that were subjects of the Writ of
Seizure were placed by petitioners in the factory
built on their own land. Indisputably, they were
essential and principal elements of their chocolate-
making industry. Hence, although each of them was
movable of personal property of its own, all of them
have become “immobilized by destination because
they are essential and principal elements in the
industry”. In that sense, petitioners are correct in
arguing that the said machineries are real, not
personal property pursuant to Article 415 of the Civil
Code.
 The Court has held that contracting parties may
validly stipulate that a real property can be
considered as personal. After agreeing to such
stipulation, they are consequently stopped from
claiming otherwise. Under the principle of estoppel,
a party to a contract is ordinarily precluded from
denying the truth of any material fact found therein.
 In the present case, the Lease Agreement clearly
provides that the machineries in question are to be
considered as personal property. Clearly then,
petitioners are stopped from denying the
characterization of the subject machines as personal
property. Under the circumstances, they are proper
subjects of the Writ of Seizure
 It should be stressed, however, that our holding—
that the machines should be deemed personal
property pursuant to the Lease Agreement—is good
only insofar as the contracting parties are
concerned. Hence, while the parties are bound by
the Agreement, third persons acting in good faith are
not affected by its stipulation characterizing the
subject machinery as personal. In any event, there is
no showing that any specific third party would be
adversely affected.
12. Tsai vs CA
 Respondent EVERTEX executed a Chattel and Real
Mortgage over a lot and some other chattels
enumerated and attached in the contract. The
mortgage was in favour of petitioner PBCom to
obtain a loan of 3M from
 A second loan was again obtained by respondent
from petitioner secured by a chattel mortgage over
personal properties attached to the contract
 Evertex declared insolvency and filed insolvency
proceedings
 Due to their failure to pay obligation, petitioner filed
extrajudicial foreclosure proceedings against
EVERTEX
 The properties were sold in a public auction to
PBCom
 EVERTEX filed a complaint for annulment of sale for
the foreclosure proceedings were in violation of
Insolvency Law
 RTC ruled in favour of EVERTEX
 CA affirmed
 Respondents argued that the controverted units of
machineries are not “real properties” but chattels
and therefore they were not part of the foreclosed
real properties, rendering the lease and the sale a
nullity
 The Court ruled that “while it is true that the
controverted properties appear to be immobile, a
perusal of the contract of Real and Chattel Mortgage
executed by the parties herein gives us a contrary
indication. In the case at bar, both the trial court and
the appellate court reached the same finding that
the true intention of PBCom and the owner,
EVERTEX, is to treat machinery and equipment as
chattels
 In the instant case, the parties (1) executed a
contract styled as Real and Estate Mortgage instead
of Real Mortgage it indeed their intention is to treat
all properties included therein as immovable and (2)
attached to the said contract a separate “LIST” of
machineries and equipment. These facts, taken
together, evince the conclusion that the parties’
intention is to treat these units of machinery as
chattels.