Prop Doctrine

8/6/2019 Prop Doctrine

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TITLE FACTS ISSUE DOCTRINELadera v.Hodges

In the cases of immovables byincorporation, the code nowhererequires that the attachment orincorporation be made by the owner of the land. The only criterion is the unionof incorporation with the soil.

Mindanao BusCo. vs City Assessor &

Treasurer

1. Petitioner is a public utility solelyengaged in transporting passengers andcargoes by motor trucks, over its authorizedpublic lines in Mindanao. Petitioner has its

main office and shop at Cagayan de Oro.

2. Court of Tax Appeals holds MinadanaoBus Co. as liable to the payment of theRealty Tax on its maintenance and repairequipment.

3. The Machineries in question is valued at P4,000 assessed by the City Assessor of Cagayan, as these machineries are sitting oncement or wooden platforms.

WON Court of TaxAppeals erred inupholding the CityAssessor scontention that thesaid tools andequipments areimmovable s andare taxable realproperties.

Movable equipments, to be immobilizedin contemplation of law, must beessential and principal elements of an

industry or works.

Evangelista v. Alto Surety

WON a houseconstructed by the

lessee of the landon which it is built,should be dealt asimmovableproperty, for thepurpose of attachment.

A house is an immovable whether it beerected by the owner of the land or by ausufructuary or lessee.

The parties may agree, however, toconsider the house as a personalproperty. But such agreement is validonly for the purposes of the contract between the parties concerned by virtueof estoppel. Such agreement is not binding to third persons, especiallywhen their rights are prejudiced.

Lopez v. Orosa 1. Lopez, supplied wood for the constructionof the theatre. The materials totaled 62,255but Orosa was only able to pay 20, 848 thusleaving a balance of almost 42k.

3. Later on respondents acquired a bank

loan of 30k, wherein Luzon Surety Companyas their surety and the land and buildings asmortgages.

4. Petitioner sued to collect the unpaidmaterials and was able to get a judgment making the respondents jointly liable to paythe remaining amount.

5. He was able to obtain a materialman s lienon the building of the theatre. And, alsostocks amounting to 42k shall be sold inpublic auction in case the respondentsdefault.

6.Petitioner wasn t happy because he alsowanted a lien on the land, urging that the

judgment lien should include it since thebuilding and the land are inseparable.

While it is true that generally, real estateconnotes the land and the buildingconstructed thereon, it is obvious that the inclusion of the building, separateand distinct from the land, in theenumeration of that may constitute realproperties could only mean one thingthat a building is by itself an immovableproperty. In the absence of any specificprovision of the law to the contrary, abuilding is an immovable property,irrespective of whether or not saidstructure and the land on which it isadhered to belong to the same owner.

Tsai v. CA 1. EVERTEX executed a Deed of Real andChattel Mortgage and another ChattelMortgage as security for loan from PBCom.

2. Due to business reverses, EVERTEX filedinsolvency proceedings. Notice of Sheriff sSale was issued. At two different publicauction, PBCom emerged as the highest bidder, making them owner of theproperties.

4. The factory was leased to Tsai forP500/month. and was sold to them later on,the factory, lock, stock and barrel to Tsai for

RTC held that the leaseand sale were irregularas it involved

The fact that the machineries werebolted or cemented on real propertymortgaged does not make them ipsofacto immovable under 415(3&5) as theparties intent has to be looked into.

Even if the properties appear to beimmovable by nature, nothing prohibitsthe law from treating them as chattels tosecure an obligation under the principleof estoppel.


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P9Million, including the contestedmachineries.

5. EVERTEX filed a complaint for annulment of sale and conveyance of the properties toPBCom was allegedly in violation of Insolvency Law.

properties not includedin the mortgagecontract.

Y ap vs. Tanada 1. Goulds Pumps International Phil filed inCity Court of Cebu a complaint against Yapand his wife, seekin recovery of P1,459, thebalance of the price and installation cost of awater pump in the petitioner s house)

2. The case resulted a judgment in favor of Goulds, as none of the defendants appeareddespite notices, having been served uponthem.

3. Yap appealed to CFI, yet again he wasordered in defaiult by Judge Tanada, forfailure to appear in pre-trial.

4.On oct. 15,1960, Judge Tanada issued anorder granting Gould s Motion for Issuanceof Write of Execution. Yap filed for Motionfor Reconsideration but was denied. Hence,this case.

WON CFI erred indeclining to annulthe execution of thesale of the pumpand accessoriessubject of theaction althoughmade without therequisite noticeprescribed for saleof immovable.

The water pump does not fit thedescription in Art.415(3)/ Theseparation or removal of the pumpinvolved nothing more complicated thanthe loosening of bolts or dismantling of other fasteners.

Yap s argument that the water had becomeimmovable property by its being installed in hisresidence is untenable. It could be and in fact wasseparated from Yap s premises without beingbroken or suffering deterioration.

MachineryEngineering

Supplies Inc vs.CA

WON replevin wasapplicable to theproperties inquestion.

The special civil action of Replevin isapplicable only to personal property.

The machinery and equipments inquestion appeared to be that of attachedto the and, particularly to the concretefoundation of said premises, in a fixedmanner, in such a way that the formercannot be separated therefrom without breaking the material or deterioration of the object. Thereby, it became animmovable.

Burgos vs Chief of Staff

WON seizedproperties are to beconsidered real.

The machinery which is movabe bynature becomes immobilized whenplaced by the owner of the tenement,property or plant, but not so whenplaced by a tenant, usufructuary, or any

other person having only temporaryright, unless such person acted as agent of the owner.

Makati Leasing& Finance Corp.vs. WeareverTextile Mills

WON themachinery in suit isreal or personalproperty from theviewpoint of theparties.

Where a chattel mortgage is constitutedon a machinery permanently attached tothe ground, the machinery is to beconsidered as personal property.

Sergs ProductsInc v PCILeasing andFinance

PCI filed a case for collection of asum of money as well as a writ of replevin for the seizure of machineries, subject of a chattelmortgage executed in favor of PCI.

Machineries in question wewseized and petitioner filed a motionfor special protective orders. It asserts that the machineries werereal prop and could not be subject of a chattel mortg.

The machines, that were the subjects of the writ of seizure, were placed bypetitioners in the factory built on theirown land. Indisputably, they wereessential and principal elements of theirchocolate-making industry. Hence,although each of them was movable onits own, all of them have becomeimmobilized by destination becausethey are essential and principalelements of the industry. Thecontracting parties however may validlystipulate that a real property beconsidered as personal. After agreeingto such stipulation, they areconsequently estopped from claimingotherwise.


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Art. 1484. In a contract of sale of personal property the priceof which is payable in installments, the vendor may exerciseany of the following remedies:

(1) Exact fulfillment of the obligation, should the vendeefail to pay;

(2) Cancel the sale, should the vendee's failure to paycover two or more installments;

(3) Foreclose the chattel mortgage on the thing sold, if onehas been constituted, should the vendee's failure topay cover two or more installments. In this case, heshall have no further action against the purchaser to

recover any unpaid balance of the price. Anyagreement to the contrary shall be void. (1454-A-a)

Art. 1485. The preceding article shall be applied to contractspurporting to be leases of personal property with option tobuy, when the lessor has deprived the lessee of thepossession or enjoyment of the thing. (1454-A-a)

Art. 1486. In the case referred to in two preceding articles, astipulation that the installments or rents paid shall not bereturned to the vendee or lessee shall be valid insofar as thesame may not be unconscionable under the circumstances.(n)

Art. 1487. The expenses for the execution and registration of the sale shall be borne by the vendor, unless there is astipulation to the contrary. (1455a)

Art. 1488. The expropriation of property for public use isgoverned by special laws. (1456)

Art. 1489. All persons who are authorized in this Code toobligate themselves, may enter into a contract of sale, savingthe modifications contained in the following articles.Where necessaries are those sold and delivered to a minor orother person without capacity to act, he must pay areasonable price therefor. Necessaries are those referred to inArticle 290. (1457a)

Art. 1490. The husband and the wife cannot sell property toeach other, except:

(1) When a separation of property was agreed upon in themarriage settlements; or(2) When there has been a judicial separation or property

under Article 191. (1458a)

Art. 1491. The following persons cannot acquire by purchase,even at a public or judicial auction, either in person orthrough the mediation of another:

(1) The guardian, the property of the person or personswho may be under his guardianship;

(2) Agents, the property whose administration or sale mayhave been entrusted to them, unless the consent of the principal has been given;

(3) Executors and administrators, the property of theestate under administration;

(4) Public officers and employees, the property of the Stateor of any subdivision thereof, or of any government-

owned or controlled corporation, or institution, theadministration of which has been intrusted to them;this provision shall apply to judges and governmentexperts who, in any manner whatsoever, take part inthe sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers andemployees connected with the administration of

justice, the property and rights in litigation or leviedupon an execution before the court within whose

jurisdiction or territory they exercise their respectivefunctions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers,with respect to the property and rights which may bethe object of any litigation in which they may takepart by virtue of their profession.

(6) Any others specially disqualified by law. (1459a)Art. 1492. The prohibitions in the two preceding articles areapplicable to sales in legal redemption, compromises andrenunciations. (n)

CHAPTER 3EFFECTS OF THE CONTRACT

WHEN THE THINGSOLD HAS BEEN LOST

Art. 1493. If at the time the contract of sale is perfected, thething which is the object of the contract has been entirelylost, the contract shall be without any effect.

But if the thing should have been lost in part only, the vendeemay choose between withdrawing from the contract anddemanding the remaining part, paying its price in proportionto the total sum agreed upon. (1460a)

Art. 1494. Where the parties purport a sale of specific goods,and the goods without the knowledge of the seller haveperished in part or have wholly or in a material part sodeteriorated in quality as to be substantially changed incharacter, the buyer may at hi s option treat the sale:

(1) As avoided; or(2) As valid in all of the existing goods or in so much

thereof as have not deteriorated, and as binding thebuyer to pay the agreed price for the goods in whichthe ownership will pass, if the sale was divisible. (n)

CHAPTER 4OBLIGATIONS OF THE VENDOR

SECTION 1. - General Provisions

Art. 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing which is the object of the sale. (1461a)Art. 1496. The ownership of the thing sold is acquired by thevendee from the moment it is delivered to him in any of theways specified in Articles 1497 to 1501, or in any othermanner signifying an agreement that the possession istransferred from the vendor to the vendee. (n)

SECTION 2. - Delivery of the Thing Sold

Art. 1497. The thing sold shall be understood as delivered,when it is placed in the control and possession of the vendee.(1462a)

Art. 1498. When the sale is made through a publicinstrument, the execution thereof shall be equivalent to thedelivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearlybe inferred.

With regard to movable property, its delivery may also bemade by the delivery of the keys of the place or depositorywhere it is stored or kept. (1463a)

Art. 1499. The delivery of movable property may likewise bemade by the mere consent or agreement of the contracting

parties, if the thing sold cannot be transferred to thepossession of the vendee at the time of the sale, or if thelatter already had it in his possession for any other reason.(1463a)

Art. 1500. There may also be tradition constitutum possessorium . (n)

Art. 1501. With respect to incorporeal property, theprovisions of the first paragraph of article 1498 shall govern.In any other case wherein said provisions are not applicable,the placing of the titles of ownership in the possession of thevendee or the use by the vendee of his rights, with thevendor's consent, shall be understood as a delivery. (1464)


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Art. 1502. When goods are delivered to the buyer "on sale or return" to give the buyer an option to return the goodsinstead of paying the price, the ownership passes to thebuyer of delivery, but he may revest the ownership in theseller by returning or tendering the goods within the timefixed in the contract, or, if no time has been fixed, within areasonable time. (n)

When goods are delivered to the buyer on approval or on trialor on satisfaction, or other similar terms, the ownershiptherein passes to the buyer:

(1) When he signifies his approval or acceptance to theseller or does any other act adopting the transaction;

(2) If he does not signify his approval or acceptance to theseller, but retains the goods without giving notice of rejection, then if a time has been fixed for the returnof the goods, on the expiration of such time, and, if no time has been fixed, on the expiration of areasonable time. What is a reasonable time is aquestion of fact. (n)

Art. 1503. When there is a contract of sale of specific goods,the seller may, by the terms of the contract, reserve the rightof possession or ownership in the goods until certainconditions have been fulfilled. The right of possession orownership may be thus reserved notwithstanding the deliveryof the goods to the buyer or to a carrier or other bailee forthe purpose of transmission to the buyer.Where goods are shipped, and by the bill of lading the goodsare deliverable to the seller or his agent, or to the order of the seller or of his agent, the seller thereby reserves theownership in the goods. But, if except for the form of the billof lading, the ownership would have passed to the buyer onshipment of the goods, the seller's property in the goods shallbe deemed to be only for the purpose of securingperformance by the buyer of his obligations under thecontract.

Where goods are shipped, and by the bill of lading the goodsare deliverable to order of the buyer or of his agent, butpossession of the bill of lading is retained by the seller or hisagent, the seller thereby reserves a right to the possession of the goods as against the buyer.

Where the seller of goods draws on the buyer for the priceand transmits the bill of exchange and bill of lading togetherto the buyer to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading if hedoes not honor the bill of exchange, and if he wrongfullyretains the bill of lading he acquires no added right thereby.If, however, the bill of lading provides that the goods aredeliverable to the buyer or to the order of the buyer, or isindorsed in blank, or to the buyer by the consignee namedtherein, one who purchases in good faith, for value, the bill of lading, or goods from the buyer will obtain the ownership inthe goods, although the bill of exchange has not beenhonored, provided that such purchaser has received deliveryof the bill of lading indorsed by the consignee named therein,or of the goods, without notice of the facts making thetransfer wrongful. (n)

Art. 1504. Unless otherwise agreed, the goods remain at theseller's risk until the ownership therein is transferred to thebuyer, but when the ownership therein is transferred to thebuyer the goods are at the buyer's risk whether actualdelivery has been made or not, except that:

(1) Where delivery of the goods has been made to thebuyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods hasbeen retained by the seller merely to secureperformance by the buyer of his obligations underthe contract, the goods are at the buyer's risk fromthe time of such delivery;

(2) Where actual delivery has been delayed through thefault of either the buyer or seller the goods are atthe risk of the party in faul t. (n)

Art. 1505. Subject to the provisions of this Title, where goodsare sold by a person who is not the owner thereof, and whodoes not sell them under authority or with the consent of theowner, the buyer acquires no better title to the goods thanthe seller had, unless the owner of the goods is by hisconduct precluded from denying the seller's authority to sell.Nothing in this Title, however, shall affect:

(1) The provisions of any factors' act, recording laws, orany other provision of law enabling the apparentowner of goods to dispose of them as if he were thetrue owner thereof;

(2) The validity of any contract of sale under statutorypower of sale or under the order of a court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, ormarkets, in accordance with the Code of Commerceand special laws. (n)

Art. 1506. Where the seller of goods has a voidable titlethereto, but his title has not been avoided at the time of thesale, the buyer acquires a good title to the goods, providedhe buys them in good faith, for value, and without notice of the seller's defect of title. (n)

Art. 1507. A document of title in which it is stated that thegoods referred to therein will be delivered to the bearer, or tothe order of any person named in such document is anegotiable document of title. (n)

Art. 1508. A negotiable document of title may be negotiatedby delivery:

(1) Where by the terms of the document the carrier,warehouseman or other bailee issuing the sameundertakes to deliver the goods to the bearer; or

(2) Where by the terms of the document the carrier,warehouseman or other bailee issuing the sameundertakes to deliver the goods to the order of aspecified person, and such person or a subsequent

endorsee of the document has indorsed it in blank orto the bearer.

Where by the terms of a negotiable document of title thegoods are deliverable to bearer or where a negotiabledocument of title has been indorsed in blank or to bearer, anyholder may indorse the same to himself or to any specifiedperson, and in such case the document shall thereafter benegotiated only by the endorsement of such endorsee. (n)

Art. 1509. A negotiable document of title may be negotiatedby the endorsement of the person to whose order the goodsare by the terms of the document deliverable. Suchendorsement may be in blank, to bearer or to a specifiedperson. If indorsed to a specified person, it may be againnegotiated by the endorsement of such person in blank, tobearer or to another specified person. Subsequentnegotiations may be made in like manner. (n)

Art. 1510. If a document of title which contains anundertaking by a carrier, warehouseman or other bailee todeliver the goods to bearer, to a specified person or order of a specified person or which contains words of like import, hasplaced upon it the words "not negotiable," "non-negotiable" or the like, such document may nevertheless be negotiatedby the holder and is a negotiable document of title within themeaning of this Title. But nothing in this Title contained shallbe construed as limiting or defining the effect upon theobligations of the carrier, warehouseman, or other baileeissuing a document of title or placing thereon the words "not negotiable," "non-negotiable," or the like. (n)

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