Bicerra v.

Teneza
[G.R. No. L-16218. November 29, 1962.]
En Banc, Makalintal (J): 10 concur.

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:
Whether or not the house is immovable property even if it is on the land of another

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.

Leung Yee vs Strong Machinery Co.,
Facts:
In 1913, Compania Agricola Filipina was indebted to two personalities: Leung Yee and
Strong Machinery Co. CAF purchased some rice cleaning machines from SMCo. 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
SMCo, 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 SMCo. SMCo 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 was 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 SMCo evidence is the chattel mortgage already
registered by SMCo.
ISSUE: Who is the owner of the building?
HELD: The SC ruled that SMCo 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 SMCo.
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.

Santos Evangelista v. Alto Surety and Insurance Co., Inc.
G.R. No. L-11139, April 23, 1958, 103 Phil. 401
Concepcion, J.

FACTS: On June 4, 1949, Santos Evangelista instituted a civil case for a sum of money.
On the same date, he obtained a writ of attachment, which was levied upon a house,
built by Rivera on a land situated in Manila and leased to him. In due course, judgment
was rendered in favor of Evangelista, who bought the house at public auction held in
compliance with the writ of execution issued in said case. When Evangelista sought to
take possession of the house, Rivera refused to surrender it, upon the ground that he
had leased the property from the Alto Surety & Insurance Co., Inc. and that the latter is
now the true owner of said property. It appears that on May 10, 1952, a definite deed of
sale of the same house had been issued to Alto Surety, as the highest bidder at an
auction sale held. Hence, Evangelista instituted an action against Alto Surety and
Ricardo Rivera, for the purpose of establishing his title over said house, and securing
possession thereof, apart from recovering damages. After due trial, the CFI Manila
rendered judgment for Evangelista, sentencing Rivera and Alto Surety to deliver the
house in question to Evangelista and to pay him, jointly and severally, P40.00 a month
from October, 1952, until said delivery, plus costs.

ISSUE: Whether or not a house constructed by the lessee of the land on which it is built,
should be dealt with, for purposes of attachment, as immovable property or as personal
property.

HELD: The house is not personal property, much less a debt, credit or other personal
property not capable of manual delivery, but immovable property. As explicitly held, in
Ladera vs. Hodges (48 OG 5374), "a true building (not merely superimposed on the soil)
is immovable or real property, whether it is erected by the owner of the land or by a
usufructuary or lessee. The opinion that the house of Rivera should have been attached
in accordance with subsection (c) of said section 7, as "personal property capable of
manual delivery, by taking and safely keeping in his custody", for it declared that
"Evangelista could not have validly purchased Ricardo Rivera's house from the sheriff
as the latter was not in possession thereof at the time he sold it at a public auction is
untenable.

MANARANG AND MANARANG V. OFILADA AND ESTEBAN99 SCRA 108

FACTS:
Manarang secured a loan from Esteban guaranteed by a chattel mortgage over a house of mixed materials.
Due to failure to pay,the chattel mortgage was foreclosed. Before the sale of the property, Manarang tried to pay
for the property but the sheriff refused to accept tender unless there is payment for the publication of the notice of
sale in the newspapers. This prompted Manarang to bring this suit to compel the sheriff to accept payment. He
averred that the publication was unnecessary as the house should be considered as personal property per agreement
in the chattel mortgage, and the publication for notice of sale is unnecessary.

Issue:

Whether the house made of mixed materials and subject of a chattel mortgage is one of personal or real property.

Held:

The house is a real property.
The general principle of law is that a building permanently fixed to the freehold becomes part of it; that is, a house is a real
estate belonging to the owner of the land on which it stands, even though it was erected against his will or without his consent.
(Accessory follows the principal.)

However, where improvement is made with the consent of the landowner, it shall remain as personal property.

In determining whether property remains personal or real, the following must be considered: its annexation to the soil, either
actual or constructive and the intention of the parties.

The house was made subject of a contract but it does not give the character of one of personal property to it although it is the
intention of the parties when they executed the chattel mortgage.

This is because the rules on execution does not allow special consideration that the parties to a contract may have desired to
impart to real estate when they are not ordinarily so. When the rules speak of personal property, it means a property which is
ordinarily considered as such and when it speaks of real property, it means property which is generally known as real
property. The rules were never intended to suit the consideration that parties may have given to the property levied upon.

The mere fact that a house was the subject of a chattel mortgage and was considered as personal property by the parties,
it does not make the house a personal property for purposes of the notice to be given for its sale at public auction. This is to
prevent confusion and misunderstanding.

Board of Assesment Appeals vs Manila Electric Co.

Facts:
In 1902, Philippine Commission enacted Act No. 484 which authorized the Municipal Board of
Manila to grant a franchise to construct, maintain and operate an electric street railway and
electric light, heat and power system in the City of Manila and its suburbs to the person or
persons making the most favorable bid. Charles M. Swift was awarded the said franchise, the
terms and conditions of which were embodied in Ordinance No. 44 in 1903.

In 1955, petitioner City Assessor of Quezon City declared the aforesaid steel towers for real
property tax under Tax declaration Nos. 31992 and 15549. After denying respondent's petition
to cancel these declarations, an appeal was taken by respondent to the Board of Assessment
Appeals of Quezon City, which required respondent to pay the amount of P11,651.86 as real
property tax on the said steel towers for the years 1952 to 1956. Respondent paid the amount
under protest, and filed a petition for review in the CTA which rendered a decision on December
29, 1958, ordering the cancellation of the said tax declarations and the petitioner City Treasurer
of Quezon City to refund to the respondent the sum of P11,651.86. The motion for
reconsideration having been denied, on April 22, 1959, the instant petition for review was filed.

Issue:
Whether the aforesaid steel towers is a real property, making petitioners liable for real property
tax.
Held: The steel towers of an electric company dont constitute real property for the
purposes of real property tax.
Steel towers are not immovable property under paragraph 1, 3 and 5 of Article 415.
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.
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.
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. Each
of these steel towers or supports consists of steel bars or metal strips, joined
together by means of bolts, which can be disassembled by unscrewing the bolts and
reassembled by screwing the same.
These steel towers or supports do not also fall under paragraph 5, for they are not
machineries or receptacles, instruments or implements, and even if they were, they
are not intended for industry or works on the land.
Petitioner is not engaged in an industry or works on the land in which the steel
supports or towers are constructed.
The Supreme Court affirmed the decision appealed from, with costs against the
petitioners.
Meralco vs CBAA
114 SCRA 260

Facts:

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 San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), Inc.

The storage tanks are made of steel plates welded and assembled on the spot. Their bottoms rest on a foundation consisting of
compacted earth as the outermost layer. The tank is not attached to its foundation. It is not anchored or welded to the concrete
circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The tank merely sits
on its foundation. Pipelines were installed on the sides of each tank and are connected to the pipelines of the Manila Enterprises
Industrial Corporation.
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 and required Meralco to
pay realty taxes on the two tanks.

Issue:

Whether or not the 2 oil tanks installed by Meralco in Batangas is a subject to a realty tax.

Held:

The SC ruled that while 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 permanence as receptacles for the considerable quantities of oil needed by Meralco for its
operations.

Thus, the two tanks should be held subject to realty tax because they were considered real property.

Henceforth, the petition is dismissed. The Board's questioned decision and resolution are affirmed.