LEUNG YEE vs. F.L STRONG MACHINERY CO. AND WILLIAM SON [37 SCRA 644] FACTS: 1.

First mortgage: Compania Agricola Filipina bought rice-cleaning machinery from the machinery company and this was secured by a chattel mortgage on the machinery and the building to which it was installed. Upon failure to pay, the chattel mortgage was foreclosed, the building and machinery sold in public auction and bought by the machinery company. 2. Days after, the Compania Agricola Filipina executed a deed of sale over the land to which the building stood in favor of the machinery company. This was done to cure any defects that may arise in the machinery companys ownership of the building. 3. Second mortgage: on or about the date to which the chattel mortgage was executed, Compania executed a real estate mortgage over the building in favor of Leung Yee, distinct and separate from the land. This is to secure payment for its indebtedness for the construction of the building. Upon failure to pay, the mortgage was foreclosed. 4. The machinery company then filed a case, demanding that it be declared the rightful owner of the building. The trial court held that it was the machinery company which was the rightful owner as it had its title before the building was registered prior to the date of registry of Leung Yees certificate. HELD: Building separate from land does not affect character as real property; Registry of chattel mortgage does not affect character of the building and the machineries installed therein. 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," mortgages of personal property executed in the manner and form prescribed in the statute. The building of strong materials in which the machinery was installed 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.

DAVAO SAWMILL vs. CASTILLO FACTS: The Davao Saw Mill is the holder of a lumber concession from the Government. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao, Province of Davao. However, the land upon which the business was conducted belonged to another person.

On the land the sawmill company erected a building which housed the machinery used by it. Some of the implements thus used were clearly personal property, the conflict concerning machines which were placed and mounted on foundations of cement. In the contract of lease stipulated that on the expiration of the period agreed upon, or if the Lessee should leave or abandon the land leased, all the improvements and buildings introduced and erected by the Lessee shall pass to the exclusive ownership of the Lessor without any obligation on its part to pay any amount for said improvements and buildings; which do not include the machineries and accessories in the improvements. In another action, Davao Light & Power Co., Inc., vs. Davao Saw Mill Co., Inc., a judgment was rendered in favor of the Davao Light and a writ of execution issued for the properties now in question to be levied upon as personalty by the sheriff. Davao Light, the winning bidder, proceeded to take, possession of the machinery and other properties described in the certificates of sale executed in its favor by the, sheriff of Davao. As connecting up with the facts, Davao Saw Mill Co. has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons. One of such persons is Castillo, an appellee by assignment from the original mortgagees. ISSUE: Whether or not the machinery real or personal? HELD: As a rule, the machinery should be considered as personal, since it was not placed on the land by the owner of the said land. Immobilization by destination or purpose cannot generally be made by a person, whose possession of the property is only temporary, otherwise we will be forced to presume that he intended to give the property permanently away in favor of the owner of the premises. In the case at bar, when Davao Saw placed the machinery in a 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 or abandonment of the land leased, it in effect shows that the lessee also treated the machinery as personal property by 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, therefore the machinery must be classified as personal property. 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.

MINDANAO BUS CO. vs. CITY ASSESSOR FACTS: Mindanao Bus Company is a public utility engaged in transporting passengers and cargoes by motor trucks in Mindanao but has its main offices in Cagayan de Oro. The company is also owner to the land where it maintains and operates a garage, a repair shop, blacksmith and carpentry shops; the machineries are place on wooden and cement platforms. The City Assessor of Cagayan de Oro City assessed at P4,400 said maintenance and repair equipment. The company appealed the assessment to the Board of Tax Appeals on the ground that the same are not realty. The Board of Tax Appeals of the City sustained the city assessor, so the company filed with the Court of Tax Appeals a petition for the review of the assessment. The CTA held that the Company was liable to the payment of the realty tax on its maintenance and repair equipment. Hence, the company filed a petition for review with the Supreme Court. ISSUE: Whether or not the machineries assessed by the respondent are real properties? HELD: Paragraph 5 of Article 415 of the New Civil which provides 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 are immovable properties. 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." The tools and equipments in question in this instant case are, by their nature, not essential and principal 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. The equipments 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 equipments may not, therefore, be deemed real property.

SALVADOR H. LAUREL vs. RAMON GARCIA [G. R. No. 92013, July 25, 1990] FACTS: This is a petition for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306 Roppongi; 5-chome Minato-ku Tokyo, Japan scheduled on February 21, 1990.

The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on 9 May 1956. The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. ISSUES: 1. Whether or not the Roppongi property and others of its kind can be alienated by the Philippine government. 2. Whether or not the Chief Executive, her officers and agents have the authority, and jurisdiction to sell the Roppongi property. RULING: The Court ruled in the negative. The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese government. There can be no doubt that it is of public dominion and is outside the commerce of man. And the property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio vs. Director of Lands, 108 Phil 335). It is not for the President to convey valuable real property of the government on his or her own sole will. Any such conveyances must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence. Petition is granted.

TECHNOGAS PHIL vs. CA FACTS Petitioner bought a lot together with the building and improvements including the wall which encroached that of the defendant. Upon learning of such encroachment, petitioner offered to buy the land but defendant refused. After 2 years, through an agreement, petitioner agreed to demolish the wall (but the case did not state what happened to this agreement, my assumption is that it did not happen due to conflicts that arose after) Defendant dug a canal along the wall which caused a portion of it to collapse. Petitioner filed a supplemental complaint re the action and a separate criminal action of malicious mischief (which the wife was convicted of) RTC decided for the petitioners and the CA reversed. Note that respondent wants to have the wall demolished.

ISSUES: A. Whether or not petitioner is a builder in bad faith because it is 'presumed to know the metes and bounds of his property.' B. Whether or not amicable settlement was a proper remedy C. Whether or not respondent can opt to demolish the structure without exercising the option to sell the land to the petitioner and the latter cannot do buy the same RULING: Petition was granted. Good faith or Bad Faith No such doctrinal statement that supports that the knowledge of metes and bounds of a land due to the Torrens system would amount to bad faith if there was encroachment on the land of another. A. When the petitioner purchased the lot, the wall was already built. Even the respondent did not knew about the encroachment until he has hired a surveyor. B. Where one derives title to the property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence against the former. And possession in good faith does not lose this character except when the possessor is aware of this impropriety. C. The encroachment was very narrow which can be considered as a mere error. Remedy the petitioner, despite being a purchaser of the original builder, can compel the landowner to either buy the property or sell the piece of land because: 1. He was really unaware of the encroachment basing on the fact presented by both sides. 2. When the petitioner bought the land, he has stepped into the rights of the original owner (hence, the right to compel the LO to buy or sell is also transferred) Estoppel Petitioner is not considered in estoppel only because it has previously agreed to demolish a part of the wall. Rather, it was to be negotiated by the parties concern. In the meantime, petitioner has to pay the rent for the property occupied by its building only up to the date when respondent serves notice of their option. Case remanded back to the trial court for determination of the value of the land and the number of days to allot for the respondent to choose an option.

DEPRA vs. DUMLAO FACTS: Dumlao is the owner of a parcel of land in Iloilo, while Depra owns the lot adjoining his. Dumlao built his house on his own land, but the kitchen encroached about 34 sq.m on Depras

property. Upon finding this, Depras mom ordered Dumlao to move back from his encroachment, then subsequently filed an action for unlawful detainer against Dumlao. The lower court found that Dumlao was a builder in good faith, and ordered him to pay rent (PhP5.00/month) forced lease between the parties. Depra refused to accept the rentals so Dumlao deposited this with the MTC. Neither party appealed judgment so this became final and executory. 1 year later, though, Depra filed an complaint for Quieting of Title. Dumlao contested this, stating that the suit is barred by res judicata. But Depra averred that the lower court did not have jurisdiction to rule on encumbrances of real property only the CFI has jurisdiction. A case to quiet title was also instituted wherein Depra was held to be the owner of the land. ISSUE: 1. Whether or not res judicata would apply to the case at bar? 2. Whether or not the land owner can be compelled to accept rent payments by the court (with both LO and BPS being in good faith)? HELD: In the first issue, res judicata would not apply should the first case be one for ejectment and the other for quieting of title. Article 448 of the Civil Code provides that the land owner has 2 options to buy the building or to sell/rent his land. This is so because the rights of the owner of the land is older, and by the principle of accession, he also has a right to the accessories. The Court remanded the case to the RTC to determine the fair price of the land, the expenses incurred by the BPS (Dumlao), the increase in value of the land, and whether the value of the land is considerably more than the value of the kitchen built on it. The RTC shall then give Depra 15 days to exercise such option.

IGNAO vs. IAC When co-ownership is terminated by division of land, Art 448 applies to parties in good faith. The party whose land is encroached upon has the sole right to choose whether to sell his land encroached or to appropriate that which encroaches his land. FACTS: The case involves Petitioner Florencio Ignao and his Uncles Juan and Isidro Ignao as Respondents. Both Petitioner and Respondents co-owned land with 534 sqm (about the size of an Olympic swimming pool.) in Cavite. The parties had a falling out (maybe the uncles had bad breath) and so attempted to partition the land, with 133 going to the uncles and 266 going to Petitioner. The attempt failed. Later, Petitioner discovered that the two houses of Respondent uncles encroached his land. Juan ate 42 sqm and Isidro ate 59 sqm for the grand total of 101 sqm. He complained.

The RTC said that uncles built in good faith therefore that exempts them from damages. Art 448 therefore applies But things didnt go to well for the Petitioner. The RTC said that if Petitioner opted to appropriate the sections of the encroaching houses, the Uncles will be left with worthless hovels. Hence, RTC ordered Petitioner to just sell his land which was encroached. No Good! cried Petitioner and he appealed to the IAC. He lost again. Petitioner trooped to the SC for vindication ISSUE: 1. Whether or not Petitioner has the right to choose whether to appropriate the house encroaching his land or to sell his land. 2. Whether or not the courts and respondents can rob Petitioner of the options provided for under Art 448. HELD: Petitioner has the right whether to appropriate the houses or to sell his land! The ruling of the RTC and IAC contravened the explicit provisions of Art 448 which granted him the explicit right to choose. The law is clear when it bestows choice upon the aggrieved land owner and not upon the builders or the courts.