Ladera vs.

Hodges
No. 8027-R. September 23, 1952.
Reyes, J.B.L., J.
Doctrine: Article 315 of the Civil Code (now Article 415, New Civil Code)
makes no distinction as to whether the owner of the land is or is not the
owner of the building.
Facts: Ladera entered into a contract with Hodges whereby the latter
promised to sell a lot subject to certain terms and conditions. In case of
failure of the purchaser to make a monthly payment within 60 days after it
fell due, this contract may be taken and considered as rescinded and
annulled, in which case all sums of money paid would be considered rentals
and the vendor shall be at liberty to dispose of the parcel of land with all the
improvements theron to any other person in a manner as if this contract had
never been made. After the execution of the contract, Ladera built on a lot a
house of mixed materials assessed at P4500.
Unfortunately, Ladera failed to pay the agreed installments, whereupon the
appellant rescinded the contract and filed an action for ejectment. The MTC
rendered a decision upon agreement of the parties- Ladera to vacate and
surrender possession of the lot and pay P10 a month until delivery of the
premises. The court issued an alias writ of execution and pursuant thereto
the sheriff levied upon all rights, interests, and participation over your house
standing on the lot. The sheriff posted the notices of the sale but did not
publish the same in a newspaper of general circulation.
At the auction sale Ladera did not attend because she had gone to Manila and
the sheriff sold the property to Avelina Magno as the highest bidder. On July
6, 1948, Hodges sold the lot to Manuel Villa and on the same day the latter
purchased the house from Magno for P200 but this last transaction was not
recorded.
Ladera returned to Iloilo after the sale and learned of its results. She went to
see the sheriff and upon the latters representation that she could redeem the
property, she paid him P230 and the sheriff issued a receipt. It does not
appear, however, that this money was turned over to Hodges. Thereupon,
Ladera spouses filed an action against Hodges, the sheriff, and the judgment
sale purchasers, Magno and Villa to set aside the sale and recover the house.
The lower court ruled in favor of Ladera. Hodges et al contend that the house
being built on land owned by another person should be regarded in law as
movable or personal property.
Issue: Whether the house being built on land owned by another should be
regarded as movable property.
Held: According to Article 334 of the Civil Code (now 415), Immovable
property are the following: Lands, building, roads, and constructions of all
kinds adhering to the soil; Applying the principle Ubi lex non distinguit nec
nos distinguere debemu, the law makes no distinction as to whether the
owner of the land is or is not the owner of the building. In view of the plain
terms of the statute, the only possible doubt could arise in the case of a house
sold for demolition.
In the case of immovables by destination, the code requires that they be
placed by the owner of the tenement, in order to acquire the same nature or
consideration of real property. In cases of immovable by incorporation, the
code nowhere requires that the attachment or incorporation be made by the
owner of the land. The only criterion is union or incorporation with the soil.
Ladera did not declare his house to be a chattel mortgage. The object of the
levy or sale was real property. The publication in a newspaper of general
circulation was indispensible. It being admitted that no publication was ever
made, the execution sale was void and conferred no title on the purchaser.
The alleged purchaser at the auction sale, Magno, is a mere employee of the
creditor Hodges and the low bid made by her as well as the fact that she sold
the house to Villa on the same day that Hodges sold him the land, proves that
she was merely acting for and in behalf of Hodges.
It should be noted that in sales of immovables, the lack of title of the vendor
taints the rights of subsequent purchasers. Unlike in sales of chattels and
personalty, in transactions covering real property, possession in good faith is
not equivalent to title.
------------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 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 incidentalsacquired as movables and used only for expediency to facilitate and/or
improve its service. Even without such tools and equipments, its business
may he 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.
-------FACTS:
Petitioner is engaged in a public utility business, solely engaged in
transporting passengers and cargoes by motor trucks, over its authorized
lines in Mindanao. It owns a main office and branch offices. To be found in
their offices are machineries and equipment, which were assessed by the City
Assessor as real properties.
HELD:
Movable equipments to be immobilized in contemplation of 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
those movables, which are essential and principal elements of an industry,
from those which may not be so considered immobilized by destination
because they are merely incidental, not essential and principal.
In the case at bar, the tools and equipments in question are by their nature
not essential and principal elements of petitioners business of transporting
passengers and cargoes by motor trucks. They are merely incidentals.
----MAKATI LEASING AND FINANCE CORP. V. WEAREVER TEXTILE MILLS, INC.
Parties to a contract may by agreement treat as personal property that
which by nature is a real property, as long as no interest of 3rd party
would be prejudiced.
FACTS:
To obtain financial accommodations from Makati Leasing, Wearever Textile
discounted and assigned several receivables under a Receivable Purchase
Agreement with Makati Leasing. To secure the collection of receivables, it
executed a chattel mortgage over several raw materials and a machinery
Artos Aero Dryer Stentering Range (Dryer).
Wearever defaulted thus the properties mortgaged were extrajudicially
foreclosed. The sheriff, after the restraining order was lifted, was able to
enter the premises of Wearever and removed the drive motor of the Dryer.
The CA reversed the order of the CFI, ordering the return of the drive motor
since it cannot be the subject of a replevin suit being an immovable bolted to
the ground. Thus the case at bar.
ISSUE:
Whether the dryer is an immovable property

HELD: NO
The SC relied on its ruling in Tumalad v. Vicencio, that if a house of strong
materials can be the subject of a Chattel Mortgage as long as the parties to
the contract agree and no innocent 3rd party will be prejudiced then moreso
that a machinery may treated as a movable since it is movable by nature and
becomes immobilized only by destination. And treating it as a chattel by way
of a Chattel Mortgage, Wearever is estopped from claiming otherwise.
----Makati Leasing vs. Wearever Textile
Facts:
Wearever Textile in order to obtain a financial accommodation from Makati
Leasing, discounted and assigned several receivables with the former under
a Receivable Purchase Agreement. To secure the collection of the receivables
assigned, Waerever executed a Chattel Mortgage over certain raw materials
inventory as well as a machinery described as an Artos Aero Dryer
Stentering Range.
Upon Wearever's default, Makati Leasing filed a petition for extrajudicial
foreclosure of the properties mortgage to it. However, the Deputy Sheriff
assigned to implement the foreclosure failed to gain entry into Wearever's
premises and was not able to effect the seizure of the machinery. Makati
Leasing thereafter filed a complaint for judicial foreclosure with the CFI
Rizal.
RTC then issued a writ of seizure, the enforcement of which was restrained
upon Wearever's filing of a motion for reconsideration. finally issued on 11
February 1981, an order to break open the premises of Wearever to enforce
said writ.
The sheriff enforcing the seizure order, repaired to the premises of Wearever
and removed the main drive motor of the subject machinery.
CA set aside the orders of the RTC and ordered the return of the drive motor
seized by the sheriff after ruling that the machinery in suit cannot be the
subject of replevin, much less of a chattel mortgage, because it is a real
property pursuant to Article 415 of the new Civil Code. CA also rejected the
argument that Wearever is estopped from claiming that the machine is real
property by constituting a chattel mortgage thereon. A motion for
reconsideration was filed by Makati Leasing, but it was denied. Hence this
petition.
Issue:
Whether the machinery in suit is real or personal property?
Held:
If a house of strong materials, like what was involved in the above Tumalad
case, may be considered as personal property for purposes of executing a
chattel mortgage thereon as long as the parties to the contract so agree and
no innocent third party will be prejudiced thereby, there is absolutely no
reason why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise treated as
such. This is really because one who has so agreed is estopped from denying
the existence of the chattel mortgage.
It must be pointed out that the characterization of the subject machinery as
chattel by the private respondent is indicative of intention and impresses
upon the property the character determined by the parties. As stated in
Standard Oil Co. of New York vs. Jaramillo, 44 Phil. 630, it is undeniable that
the parties to a contract may by agreement treat as personal property that
which by nature would be real property, as long as no interest of third
parties would be prejudiced thereby.
----------Evangelista v. Alto Surety (GR L-11139, 23 April 1958)
Evangelista v. Alto Surety
[G.R. No. L-11139. April 23, 1958.]
En Banc, Concepcion (J): 9 concur
Facts: On 4 June 1949, Santos Evangelista instituted Civil Case No. 8235 of
the CFI Manila (Santos Evangelista vs. Ricardo Rivera) 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, by filing
copy of said writ and the corresponding notice of attachment with the Office

of the Register of Deeds of Manila, on 8 June 1949. In due course, judgment

was rendered in favor of Evangelista, who, on 8 October 1951, bought the
house at public auction held in compliance with the writ of execution issued
in said case. The corresponding definite deed of sale was issued to him on 22
October 1952, upon expiration of the period of redemption. 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 10 May 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, on 29 September 1950, in compliance with a writ of execution issued in
Civil Case 6268 of the same court (Alto Surety & Insurance vs. Maximo
Quiambao, Rosario Guevara and Ricardo Rivera)" in which judgment, for the
sum of money, had been rendered in favor of Alto Surety. Hence, on 13 June
1953, 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.
On appeal, the decision was reversed by the Court of Appeals, which
absolved Alto Surety from the complaint, upon the ground that, although the
writ of attachment in favor of Evangelista had been filed with the Register of
Deeds of Manila prior to the sale in favor of Alto Surety, Evangelista did not
acquire thereby a preferential lien, the attachment having been levied as if
the house in question were immovable property, although, in the opinion of
the Court of Appeals, it is "ostensibly a personal property." As such, the Court
of Appeals held, "the order of attachment . . . should have been served in the
manner provided in subsection (e) of section 7 of Rule 59," of the Rules of
Court. Evangelista filed an appeal by Certiorari with the Supreme Court.
The Supreme Court reversed the decision of the Court of Appeals, and
another one entered affirming that of the CFI Manila, with the costs against
Alto Surety & Insurance Co.
1. House is not personal, but immovable property
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 Laddera 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. This is the
doctrine in Leung Yee vs. Strong Machinery Company, 37 Phil., 644. 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.
2. House may be considered personal property in a deed of chattel
mortgage, but view is limited to parties
Parties to a deed of chattel mortgage may agree to consider a house as
personal property for purposes of said contract (Luna vs. Encarnacion, 48
OOG 2664; Standard Oil Co. of New York vs. Jaramillo, 44 Phil., 630; De Jesus
vs. Juan Dee Co., Inc., 72 Phil., 464). However, this view is good only insofar
as the contracting parties are concerned. It is based, partly, upon the
principle of estoppel. Neither this principle, nor said view, is applicable to
strangers to said contract.
3. House is not personal property even if subject to chattel mortgage;
Rules of execution strict on the character of the properties as real and
personal notwithstanding agreement of parties
The rules on execution do not allow, and should not be interpreted as to
allow, the special consideration that parties to a contract may have desired to
impart to real estate as personal property, when they are not ordinarily so.
Sales on execution affect the public and third persons. The regulation
governing sales on execution are for public officials to follow. The form of
proceedings prescribed for each kind of property is suited to its character,
not to the character which the parties have given to it or desire to give it. The
regulations were never intended to suit the consideration that parties, may
have privately given to the property levied upon. Enforcement of regulations
would be difficult were the convenience or agreement of private parties to
determine or govern the nature of the proceedings (Manarang v. Ofilada)
4. House of mixed material levied upon on execution is real property
The house of mixed materials levied upon on execution, although subject of a
contract of chattel mortgage between the owner and a third person, is real
property within the purview of Rule 39, section 16, of the Rules of Court as it
has become a permanent fixture on the land, which is real property.
(Manarang v. Ofilada, citing various sources).

5. Foregoing consideration apply to conditions for levy of attachment

The foregoing considerations apply, with equal force, to the conditions for
the levy of attachment, for it similarly affects the public and third persons.
6. Evidence; Conclusion, that lack of proof that the writ or notice of
attachment to have been served leads to such not having been served, is
inaccurate
Considering that neither the pleadings, nor the briefs in the Court of Appeals,
raised an issue on whether or not copies of the writ of attachment and notice
of attachment had been served upon Rivera; that the defendants had
impliedly admitted that Rivera had received copies of said documents; and
that, for this reason, evidently, no proof was introduced thereon, the Court
held that the finding of the Court of Appeals to the effect that said copies had
not been served upon Rivera is based upon a misapprehension of the specific
issues involved therein and goes beyond the range of such issues, apart from
being contrary to the admission by the parties, and that, accordingly, a grave
abuse of discretion was committed in making said finding, which is,
furthermore, inaccurate.
---------Santos Evangelista vs. Alto Surety & Insurance Co., Inc.
G.R. No. L-11139. April 23, 1958
Concepcion, J.
Doctrine: Parties to a deed of chattel mortgage may agree to consider a
house as personal property for purposes of said contract. However, this view
is good only insofar as the contracting parties are concerned.
FACTS: Santos Evangelista instituted Civil Case No. 8235 of the CFI Manila for
a sum of money. He also obtained a writ of attachment, which was levied
upon a house, built by Rivera on a land situated in Manila and leased to him
by filing copy of said writ and the corresponding notice of attachment with
the Office of the Register of Deeds of Manila on June 8, 1949. Judgment was
rendered in favor of Evangelista. On October 8, 1951, he bought the house at
a public auction held in compliance with the writ of execution issued in said
case. The corresponding definite deed of sale was issued to him upon
expiration of the period of redemption. 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, on September 29, 1950,
in compliance with a writ of execution issued in Civil Case 6268 of the same
court in which judgment, for the sum of money, had been rendered in favor
of Alto Surety. As such, 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. The Court of Appeals
reversed the decision and absolved Alto Surety from the complaint, upon the
ground that, although the writ of attachment in favor of Evangelista had been
filed with the Register of Deeds of Manila prior to the sale in favor of Alto
Surety, Evangelista did not acquire thereby a preferential lien, the
attachment having been levied as if the house in question were immovable
property, although, in the opinion of the Court of Appeals, it is ostensibly a
personal property. Thus, the Court of Appeals held, the order of attachment
. . . should have been served in the manner provided in subsection (e) of
section 7 of Rule 59, of the Rules of Court. Evangelista filed an appeal by
Certiorari with the Supreme Court.
Issue: Whether 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 a personal property.
Held: Said house is not personal property, much less a debt or credit or other
personal property not capable of manual delivery, but immovable property.
As held in Laddera v. Hodges, a true building is immovable or real property,
whether it is erected by the owner of the land or by a usufructuary or lessee.
It is true that the parties to a deed of chattel mortgage may agree to consider
a house as personal property for purposes of said contract. However, this
view is good only insofar as the contracting parties are concerned. It is based
partly upon the principle of estoppel. Neither is this principle nor said view
applicable to strangers to said contract. Much less is it in point where there
has been no contract whatsoever, with respect to the status of the house
involved as in the case at bar. The rules on execution do not allow, and
should not be interpreted as to allow, the special consideration that parties
to a contract may have desired to impart to real estate as personal property,
when they are not ordinarily so. Sales on execution affect the public and third
persons. The regulation governing sales on execution are for public officials
to follow. The form of proceedings prescribed for each kind of property is
suited to its character, not to the character which the parties have given to it
or desire to give it. The regulations were never intended to suit the
consideration that parties, may have privately given to the property levied

upon. Enforcement of regulations would be difficult were the convenience or

agreement of private parties to determine or govern the nature of the
proceedings.
------Ruby Tsai vs. Court of Appeals, Ever Textile Mills, Inc. and Mamerto
Villaluz
G.R. No. 120109, October 2, 2001
Quisumbing, J.
Doctrine: Nothing detracts the parties from treating it [the property that is
immovable by nature as chattels to secure an obligation under the principle
of estoppel.
Facts: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX)
obtained a P3,000,000.00 loan from Philippine Bank of Communications
(PBCom). As security for the loan, EVERTEX executed in favor of PBCom, a
deed of Real and Chattel Mortgage over the lot where its factory stands and
the chattels located therein as enumerated in a schedule attached to the
mortgage contract. PBCom granted a second loan of P3,356,000.00 to
EVERTEX. The loan was secured by a Chattel Mortgage over personal
properties enumerated in a list attached thereto which were similar to those
listed in Annex A of the first mortgage deed.
After April 23, 1979, the date of the execution of the second mortgage,
EVERTEX purchased various machines and equipments. Then, due to
business reverses, EVERTEX filed insolvency proceedings. The CFI issued an
order declaring the corporation insolvent. All its assets were taken into the
custody of the Insolvency Court. In the meantime, upon EVERTEXs failure to
meet its obligation to PBCom, the latter commenced extrajudicial foreclosure
proceedings against EVERTEX. On December 15, 1982, the first public
auction was held where petitioner PBCom emerged as the highest. On
December 23, 1982, another public auction was held and again, PBCom was
the highest bidder. PBCom then leased the entire factory premises to
petitioner Ruby L. Tsai for P50,000.00 a month and subsequently sold the
factory, lock, stock and barrel to Tsai for P9,000,000.00, including the
contested machineries.
On March 16, 1989, EVERTEX filed a complaint for annulment of sale,
reconveyance, and damages with the Regional Trial Court against PBCom,
alleging that the extrajudicial foreclosure of subject mortgage was in
violation of the Insolvency Law. Further, EVERTEX averred that PBCom,
without any legal or factual basis, appropriated the contested properties,
which were not included in the Real and Chattel Mortgage nor in the Chattel
Mortgage and neither were those properties included in the Notice of
Sheriffs. The disputed properties, which were valued at P4,000,000.00, are:
14 Interlock Circular Knitting Machines, 1 Jet Drying Equipment, 1 Dryer
Equipment, 1 Raisin Equipment and 1 Heatset Equipment.
The trial court rendered in favor of EVERTEX. PBCom and Tsai appealed to
the Court of Appeals which affirmed RTCs decision. Their Motion for
reconsideration was also denied. Thus, PBCom and Tsai filed their separate
petitions for review with this Court.
Issue: Whether the nature of the disputed machineries make them
immovable under Article 415 (3) and (5) of the Civil Code.
Held: No. Petitioners contend that the nature of the disputed machineries,
i.e., that they were heavy, bolted or cemented on the real property mortgaged
by EVERTEX to PBCom, make them ipso facto immovable under Article 415
(3) and (5) of the New Civil Code. This assertion, however, does not settle the
issue. Mere nuts and bolts do not foreclose the controversy. We have to look
at the parties intent.
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 and the
appellate courts reached the same finding that the true intention of PBCOM
and the owner, EVERTEX, is to treat machinery and equipment as chattels.
The pertinent portion of respondent appellate courts ruling is quoted below:
It should be noted that the printed form used by appellant bank was mainly
for real estate mortgages. But reflective of the true intention of appellant
PBCOM and appellee EVERTEX was the typing in capital letters, immediately
following the printed caption of mortgage, of the phrase real and chattel. So
also, the machineries and equipment in the printed form of the bank had to
be inserted in the blank space of the printed contract and connected with the
word building by typewritten slash marks. Now, then, if the machineries in
question were contemplated to be included in the real estate mortgage, there
would have been no necessity to ink a chattel mortgage specifically
mentioning as part III of Schedule A a listing of the machineries covered
thereby. It would have sufficed to list them as immovables in the Deed of
Real Estate Mortgage of the land and building involved.
Too, assuming arguendo that the properties in question are immovable by
nature, nothing detracts the parties from treating it as chattels to secure an
obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9

SCRA 631 (1963), an immovable may be considered a personal property if

there is a stipulation as when it is used as security in the payment of an
obligation where a chattel mortgage is executed over it, as in the case at bar.
In the instant case, the parties herein: (1) executed a contract styled as Real
Estate Mortgage and Chattel Mortgage, instead of just Real Estate
Mortgage if indeed their intention is to treat all properties included therein
as immovable, and (2) attached to the said contract a separate LIST OF
MACHINERIES & EQUIPMENT. These facts, taken together, evince the
conclusion that the parties intention is to treat these units of machinery as
chattels. A fortiori, the contested after-acquired properties, which are of the
same description as the units enumerated under the title LIST OF
MACHINERIES & EQUIPMENT, must also be treated as chattels. 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.
----Sergs vs. Pci Leasing and Finance
Posted on March 28, 2012 | Leave a comment
Sergs Products, Inc. vs. Pci Leasing and Finance, Inc.
G.R. No. 137705. August 22, 2000.
Panganiban, J.:
Doctrine: After agreeing to a contract stipulating that a real or immovable
property be considered as personal or movable, a party is estopped from
subsequently claiming otherwise. Hence, such property is a proper subject of
a writ of replevin obtained by the other contracting party.
Facts: On February 13, 1998, respondent PCI Leasing and Finance, Inc. (PCI
Leasing for short) filed with the RTC-QC a complaint for [a] sum of money,
with an application for a writ of replevin.
On March 6, 1998, respondent judge issued a writ of replevin directing its
sheriff to seize and deliver the machineries and equipment to PCI Leasing
after 5 days and upon the payment of the necessary expenses. On March 24,
1998, in implementation of said writ, the sheriff proceeded to petitioners
factory, seized one machinery with [the] word that he [would] return for the
other machineries. Petitioners then filed a motion for special protective
order, invoking the power of the court to control the conduct of its officers
and amend and control its processes, praying for a directive for the sheriff to
defer enforcement of the writ of replevin. This motion was opposed by PCI
Leasing, on the ground that the properties [were] still personal and therefore
still subject to seizure and a writ of replevin.
In their Reply, petitioners asserted that the properties sought to be seized
[were] immovable as defined in Article 415 of the Civil Code, the parties
agreement to the contrary notwithstanding. They argued that to give effect to
the agreement would be prejudicial to innocent third parties. They further
stated that PCI Leasing [was] estopped from treating these machineries as
personal because the contracts in which the alleged agreement [were]
embodied [were] totally sham and farcical.
On April 6, 1998, the sheriff again sought to enforce the writ of seizure and
take possession of the remaining properties. He was able to take two more,
but was prevented by the workers from taking the rest.
Issue: Whether the said machines are personal, not immovable, property
which may be a proper subject of a writ of replevin.
Held: Rule 60 of the Rules of Court provides that writs of replevin are issued
for the recovery of personal property only. Section 3 thereof reads:
SEC. 3. Order. Upon the filing of such affidavit and approval of the bond,
the court shall issue an order and the corresponding writ of replevin
describing the personal property alleged to be wrongfully detained and
requiring the sheriff forthwith to take such property into his custody.
On the other hand, Article 415 of the Civil Code enumerates immovable or
real property as follows:
ART. 415. The following are immovable property:
x x xx x xx x x
(5) 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;
x x xx x xx x x
In the present case, the machines that were the 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 chocolatemaking industry. Hence, although each of them was movable or personal
property on 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 machines are real, not
personal, property pursuant to Article 415 (5) of the Civil Code.

Be that as it may, we disagree with the submission of the petitioners that the
said machines are not proper subjects of the Writ of Seizure.
The Court has held that contracting parties may validly stipulate that a real
property be considered as personal. After agreeing to such stipulation, they
are consequently estopped 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 machines
in question are to be considered as personal property. Specifically, Section
12.1 of the Agreement reads as follows:
12.1 The PROPERTY is, and shall at all times be and remain, personal
property notwithstanding that the PROPERTY or any part thereof may now
be, or hereafter become, in any manner affixed or attached to or embedded
in, or permanently resting upon, real property or any building thereon, or
attached in any manner to what is permanent.
Clearly then, petitioners are estopped 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.
---------Julian S. Yap vs. Hon. Santiago O. Taada and
Goulds Pumps International (Phil), Inc.,
G.R. No. L-32917, July 18, 1988
Narvasa, J.
Doctrine: Article 415, par. 3 of the Civil Code considers and immovable
property as everything attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the material or
deteriorating the object. The pump does not fit this description. It could be,
and was, in fact,separated from Yaps premises without being broken of
suffering deterioration. Obviously, the separation or removal of the pump
involved nothing more complicated that the loosening of bolts or dismantling
of other fasteners.
Facts: The case began in the City Court of Cebu with the filing of Goulds
Pumps International (Phil), Inc. of a complaint against Yap and his wife
seeking recovery of P1,459.30, representing the balance of the price and
installation cost of a water pump in the latters premises. The Court rendered
judgment in favor of herein respondent after they presented evidence exparte due to failure of petitioner Yap to appear before the Court. Petitioner
then appealed to the CFI, particularly to the sale of Judge Tanada. For again
failure to appear for pre-trial, Yap was declared in default. He filed for a
motion for reconsideration which was denied by Judge Tanada. On October
15, 1969, Tanada granted Goulds Motion for Issuance of Writ of Execution.
Yap forthwith filed an Urgent Motion for Reconsideration of the said Order.
In the meantime, the Sheriff levied on the water pump in question and by
notice scheduled the execution sale thereof. But in view of the pendency of
Yaps motion, suspension of sale was directed by Judge Tanada. It appears,
however, that this was not made known to the Sheriff whocontinued with the
auction sale and sold the property to the highest bidder, Goulds. Because of
such, petitioner filed a Motion to Set Aside Execution Sale and to Quash Alias
Writ of Execution. One of his arguments was that the sale was made without
the notice required by Sec. 18, Rule 29 of the New Rules of Court, i.e. notice
by publication in case of execution of sale of real property, the pump and its
accessories being immovable because attached to the ground with the
character of permanency. Such motion was denied by the CFI.
Issue: Whether or not the pump and its accessories are immovable property
Held: No. The water pump and its accessories are NOT immovable
properties. The argument of Yap that the water pump had become
immovable property by its being installed in his residence is untenable.
Article 415, par. 3 of the Civil Code considers and immovable property as
everything attached to an immovable in a fixed manner, in such a way that it
cannot be separated therefrom without breaking the material or
deteriorating the object. The pump does not fit this description. It could be,
and was, in fact,separated from Yaps premises without being broken of
suffering deterioration. Obviously, the separation or removal of the pump
involved nothing more complicated that the loosening of bolts or dismantling
of other fasteners.
--------Machinery & Engineering Supplies vs. CA
Posted on March 28, 2012 | Leave a comment

Machinery & Engineering Supplies, Inc. vs. Court of Appeals, et al.

No. L-7057, October 29, 1954.
Concepcion, J.
Doctrine: The special civil action of replevin is applicable only to personal
property. When the machinery and equipment in question appeared to be
attached to the land, particularly to the concrete foundation of said premises,
in a fixed manner, in such a way that the former could not be separated from
the latter without breaking the material or deterioration of the object, it had
become an immovable property under Art. 415(3).
Facts: Herein petitioner filed a complaint for replevin in the CFI of Manila
against Ipo Limestone Co., and Dr. Antonio Villarama, for the recovery of the
machineries and equipments sold and delivered to said defendants at their
factory in Barrio Bigti, Norzagaray, Bulacan. The respondent judge issued an
order, commanding Provincial Sheriff of Bulacan to seize and take immediate
possession of the properties specified in the order. Two deputy sheriffs of
Bulacan, Ramon S. Roco(president of Machinery), and a crew of technical
men and laborers proceeded to Bigti, for the purpose of carrying the courts
order into effect. Leonardo Contreras, Manager of the respondent Company,
and Pedro Torres, in charge thereof, met the deputy sheriffs, and Contreras
handed to them a letter addressed to Atty. Palad (ex-officio Provincial Sheriff
of Bulacan), protesting against the seizure of the properties in question, on
the ground that they are not personal properties.
Later on, they went to the factory. Rocos attention was called to the fact that
the equipments could not possibly be dismantled without causing damages
or injuries to the wooden frames attached to them. But Roco insisted in
dismantling the equipments on his own responsibility, alleging that the bond
was posted for such eventuality, the deputy sheriffs directed that some of the
supports thereof be cut.
The defendant Company filed an urgent motion for the return of the
properties seized by the deputy sheriffs. On the same day, the trial court
issued an order, directing the Provincial Sheriff of Bulacan to return the
machineries to the place where they were installed. The deputy sheriffs
returned the properties seized, by depositing them along the road, near the
quarry, of the defendant Company, at Bigti, without the benefit of inventory
and without re-installing them in their former position and replacing the
destroyed posts, which rendered their use impracticable.
The trial court ordered Roco to furnish the Provincial Sheriff with the
necessary funds, technical men, laborers, equipments and materials. Roco
raised the issue to the CA; a writ of preliminary injunction was issued but the
CA subsequently dismissed for lack of merit. A motion for reconsideration
was denied.
Issue: Whether or not the machineries and equipments were personal
properties and, therefore, could be seized by replevin.
Held: No. The special civil action known as replevin, governed by the Rules
of Court, is applicable only to personal property. When the sheriff repaired
to the premises of respondent company, the machinery and equipment in
question appeared to be attached to the land, particularly to the concrete
foundation of said premises, in a fixed manner, in such a way that the former
could not be separated from the latter without breaking the material or
deterioration of the object. Hence, in order to remove said outfit, it became
necessary, not only to unbolt the same, but, also, to cut some of its wooden
supports. Moreover, said machinery and equipment were intended by the
owner of the tenement for an industry carried on said immovable and
tended directly to meet the needs of the said industry. For these reasons,
they were already immovable property pursuant to paragraphs 3 and 5 of
Article 415 of the Civil Code.
Mr. Ramon Roco, insisted on the dismantling of at his own responsibility,
stating that, precisely, that is the reason why plaintiff posted a bond. In this
manner, petitioner clearly assumed the corresponding risks. It is well settled
that, when restitution of what has been ordered, the goods in question shall
be returned in substantially the same condition as when taken. It follows that
petitioner must also do everything necessary to the reinstallation of said
property in conformity with its original condition.
-----Fels Energy, Inc. vs. Province of Batangas
G.R. No. 168557. February 16, 2007.
Callejo Sr., J.
Doctrine: In Consolidated Edison Company of New York, Inc., et al. v. The
City of New York, et al., a power company brought an action to review
property tax assessment. On the citys motion to dismiss, the Supreme Court
of New York held that the barges on which were mounted gas turbine power
plants designated to generate electrical power, the fuel oil barges which
supplied fuel oil to the power plant barges, and the accessory equipment
mounted on the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that 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 are considered immovable

property. Thus, power barges are categorized as immovable property by
destination, being in the nature of machinery and other implements intended
by the owner for an industry or work which may be carried on in a building
or on a piece of land and which tend directly to meet the needs of said
industry or work.
Facts: On January 18, 1993, NPC entered into a lease contract with Polar
Energy, Inc. over 330 MW diesel engine power barges moored at Balayan
Bay in Calaca, Batangas. The contract, denominated as an Energy Conversion
Agreement, was for a period of five years. Article 10 states that NPC shall be
responsible for the payment of taxes. (other than (i) taxes imposed or
calculated on the basis of the net income of POLAR and Personal Income
Taxes of its employees and (ii) construction permit fees, environmental
permit fees and other similar fees and charges. Polar Energy then assigned
its rights under the Agreement to Fels despite NPCs initial opposition.
FELS received an assessment of real property taxes on the power barges
from Provincial Assessor Lauro C. Andaya of Batangas City. FELS referred the
matter to NPC, reminding it of its obligation under the Agreement to pay all
real estate taxes. It then gave NPC the full power and authority to represent it
in any conference regarding the real property assessment of the Provincial
Assessor. NPC filed a petition with the LBAA. The LBAA ordered Fels to pay
the real estate taxes. The LBAA ruled that the power plant facilities, while
they may be classified as movable or personal property, are nevertheless
considered real property for taxation purposes because they are installed at
a specific location with a character of permanency. The LBAA also pointed
out that the owner of the bargesFELS, a private corporationis the one
being taxed, not NPC. A mere agreement making NPC responsible for the
payment of all real estate taxes and assessments will not justify the
exemption of FELS; such a privilege can only be granted to NPC and cannot
be extended to FELS. Finally, the LBAA also ruled that the petition was filed
out of time.
Fels appealed to the CBAA. The CBAA reversed and ruled that the power
barges belong to NPC; since they are actually, directly and exclusively used
by it, the power barges are covered by the exemptions under Section 234(c)
of R.A. No. 7160. As to the other jurisdictional issue, the CBAA ruled that
prescription did not preclude the NPC from pursuing its claim for tax
exemption in accordance with Section 206 of R.A. No. 7160. Upon MR, the
CBAA reversed itself.
Issue: Whether or not the petitioner may be assessed of real property taxes.
Held: YES. The CBAA and LBAA power barges are real property and are thus
subject to real property tax. This is also the inevitable conclusion,
considering that G.R. No. 165113 was dismissed for failure to sufficiently
show any reversible error. Tax assessments by tax examiners are presumed
correct and made in good faith, with the taxpayer having the burden of
proving otherwise. Besides, factual findings of administrative bodies, which
have acquired expertise in their field, are generally binding and conclusive
upon the Court; we will not assume to interfere with the sensible exercise of
the judgment of men especially trained in appraising property. Where the
judicial mind is left in doubt, it is a sound policy to leave the assessment
undisturbed. We find no reason to depart from this rule in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The City of New
York, et al., a power company brought an action to review property tax
assessment. On the citys motion to dismiss, the Supreme Court of New York
held that the barges on which were mounted gas turbine power plants
designated to generate electrical power, the fuel oil barges which supplied
fuel oil to the power plant barges, and the accessory equipment mounted on
the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that 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 are considered immovable
property. Thus, power barges are categorized as immovable property by
destination, being in the nature of machinery and other implements intended
by the owner for an industry or work which may be carried on in a building
or on a piece of land and which tend directly to meet the needs of said
industry or work.
Petitioners maintain nevertheless that the power barges are exempt from
real estate tax under Section 234 (c) of R.A. No. 7160 because they are
actually, directly and exclusively used by petitioner NPC, a governmentowned and controlled corporation engaged in the supply, generation, and
transmission of electric power.
We affirm the findings of the LBAA and CBAA that the owner of the taxable
properties is petitioner FELS, which in fine, is the entity being taxed by the
local government. As stipulated under Section 2.11, Article 2 of the
Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and
all the fixtures, fittings, machinery and equipment on the Site used in

connection with the Power Barges which have been supplied by it at its own
cost. POLAR shall operate, manage and maintain the Power Barges for the
purpose of converting Fuel of NAPOCOR into electricity.
It follows then that FELS cannot escape liability from the payment of realty
taxes by invoking its exemption in Section 234 (c) of R.A. No. 7160. Indeed,
the law states that the machinery must be actually, directly and exclusively
used by the government owned or controlled corporation; nevertheless,
petitioner FELS still cannot find solace in this provision because Section 5.5,
Article 5 of the Agreement provides:
OPERATION. POLAR undertakes that until the end of the Lease Period,
subject to the supply of the necessary Fuel pursuant to Article 6 and to the
other provisions hereof, it will operate the Power Barges to convert such
Fuel into electricity in accordance with Part A of Article 7.
It is a basic rule that obligations arising from a contract have the force of law
between the parties. Not being contrary to law, morals, good customs, public
order or public policy, the parties to the contract are bound by its terms and
conditions.
Time and again, the Supreme Court has stated that taxation is the rule and
exemption is the exception. The law does not look with favor on tax
exemptions and the entity that would seek to be thus privileged must justify
it by words too plain to be mistaken and too categorical to be misinterpreted.
Thus, applying the rule of strict construction of laws granting tax
exemptions, and the rule that doubts should be resolved in favor of
provincial corporations, we hold that FELS is considered a taxable entity.
The mere undertaking of petitioner NPC under Section 10.1 of the
Agreement, that it shall be responsible for the payment of all real estate taxes
and assessments, does not justify the exemption. The privilege granted to
petitioner NPC cannot be extended to FELS. The covenant is between FELS
and NPC and does not bind a third person not privy thereto, in this case, the
Province of Batangas.
It must be pointed out that the protracted and circuitous litigation has
seriously resulted in the local governments deprivation of revenues. The
power to tax is an incident of sovereignty and is unlimited in its magnitude,
acknowledging in its very nature no perimeter so that security against its
abuse is to be found only in the responsibility of the legislature which
imposes the tax on the constituency who are to pay for it. The right of local
government units to collect taxes due must always be upheld to avoid severe
tax erosion. This consideration is consistent with the State policy to
guarantee the autonomy of local governments and the objective of the Local
Government Code that they enjoy genuine and meaningful local autonomy to
empower them to achieve their fullest development as self-reliant
communities and make them effective partners in the attainment of national
goals.
In conclusion, we reiterate that the power to tax is the most potent
instrument to raise the needed revenues to finance and support myriad
activities of the local government units for the delivery of basic services
essential to the promotion of the general welfare and the enhancement of
peace, progress, and prosperity of the people.

REPUBLIC ACT NO. 349

AN ACT TO LEGALIZE PERMISSIONS TO USE HUMAN ORGANS OR ANY
PORTION OR PORTIONS OF THE HUMAN BODY FOR MEDICAL,
SURGICAL, OR SCIENTIFIC PURPOSES, UNDER CERTAIN CONDITIONS
Section 1. A person may validly grant to a licensed physician, surgeon, known

(a) "Organ Bank Storage Facility" - a facility licensed, accredited or

approved under the law for storage of human bodies or parts
thereof.
(b) "Decedent" - a deceased individual, and includes a still-born
infant or fetus.
(c) "Testator" - an individual who makes a legacy of all or part of
his body.

scientist, or any medical or scientific institution, authority to detach at any

time after the grantors death any organ, part or parts of his body and to
utilize the same for medical, surgical or scientific purposes.
Similar authority may also be granted for the utilization for medical, surgical,
or scientific purposes, of any organ, part or parts of the body which, for a
legitimate reason, would be detached from the body of the grantor.
Section 2. The authorization referred in section one of this Act must; be in
writing; specify the person or institution granted the authorization, the
organ, part or parts to be detached, the use or uses of the organ, part or parts
are to be employed; and signed by the grantor and two disinterested
witnesses.
If the grantor is a minor or an incompetent person, the authorization may be
executed by his guardian with the approval of court; in default thereof, by the
legitimate father or mother, in order, named. Married women may grant the
authority referred to in section one of this Act, without the consent of the
husband.
A copy of every such authorization must be furnished the Secretary of Health.
Section 3. An authorization granted in accordance with the provisions of this
Act shall be bind the executors, administrators and successors of the
deceased and all members of his family.
Section 4. Any law or regulation inconsistent with this Act are hereby
repealed.
Section 5. This Act shall take effect upon its approval.
Approved, May 17, 1949.
-----Republic Act No. 7170

January 7, 1992

AN ACT AUTHORIZING THE LEGACY OR DONATION OF ALL OR PART OF

A HUMAN BODY AFTER DEATH FOR SPECIFIED PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled::
Section 1. Title. This Act shall be known as the "Organ Donation Act of
1991".

(d) "Donor" - an individual authorized under this Act to donate all

or part of the body of a decedent.1awphilalf
(e) "Hospital" - a hospital licensed, accredited or approval under
the law, and includes, a hospital operated by the Government.
(f) "Part" - includes transplantable organs, tissues, eyes, bones,
arteries, blood, other fluids and other portions of the human body.
(g) "Person" - an individual, corporation, estate, trust, partnership,
association, the Government or any of its subdivisions, agencies or
instrumentalities, including government-owned or -controlled
corporations; or any other legal entity.
(h) "Physician" or "Surgeon" - a physician or surgeon licensed or
authorized to practice medicine under the laws of the Republic of
the Philippines.
(i) "Immediate Family" of the decedent - the persons enumerated
in Section 4(a) of this Act.
(j) "Death" - the irreversible cessation of circulatory and
respiratory functions or the irreversible cessation of all functions
of the entire brain, including the brain stem. A person shall be
medically and legally dead if either:1awphilalf
(1) In the opinion of the attending physician, based on
the acceptable standards of medical practice, there is an
absence of natural respiratory and cardiac functions
and, attempts at resuscitation would not be successful
in restoring those functions. In this case, death shall be
deemed to have occurred at the time these functions
ceased; or
(2) In the opinion of the consulting physician,
concurred in by the attending physician, that on the
basis of acceptable standards of medical practice, there
is an irreversible cessation of all brain functions; and
considering the absence of such functions, further
attempts at resuscitation or continued supportive
maintenance would not be successful in resorting such
natural functions. In this case, death shall be deemed to
have occurred at the time when these conditions first
appeared.
The death of the person shall be determined in accordance with the
acceptable standards of medical practice and shall be diagnosed separately
by the attending physician and another consulting physician, both of whom
must be appropriately qualified and suitably experienced in the care of such
parties. The death shall be recorded in the patient's medical record.
Section 3. Person Who May Execute A Legacy. Any individual, at least
eighteen (18) years of age and of sound mind, may give by way of legacy, to
take effect after his death, all or part of his body for any purpose specified in
Section 6 hereof.
Section 4. Person Who May Execute a Donation.

Section 2. Definition of Terms. As used in this Act the following terms

shall mean:

(a) Any of the following, person, in the order of property stated

hereunder, in the absence of actual notice of contrary intentions
by the decedent or actual notice of opposition by a member of the
immediate family of the decedent, may donate all or any part of
the decedent's body for any purpose specified in Section 6 hereof:
(1) Spouse;
(2) Son or daughter of legal age;
(3) Either parent;
(4) Brother or sister of legal age; or
(5) Guardian over the person of the decedent at the
time of his death.
(b) The persons authorized by sub-section (a) of this Section may
make the donation after or immediately before death.
Section 5. Examination of Human Body or Part Thereof . A legacy of
donation of all or part of a human body authorizes any examination
necessary to assure medical acceptability of the legacy or donation for the
purpose(s) intended.
For purposes of this Act, an autopsy shall be conducted on the cadaver of
accident, trauma, or other medico-legal cases immediately after the
pronouncement of death, to determine qualified and healthy human organs
for transplantation and/or in furtherance of medical science.
Section 6. Persons Who May Become Legatees or Donees. The following
persons may become legatees or donees of human bodies or parts thereof for
any of the purposes stated hereunder:
(a) Any hospital, physician or surgeon - For medical or dental
education, research, advancement of medical or dental science,
therapy or transplantation;
(b) Any accredited medical or dental school, college or university For education, research, advancement of medical or dental
science, or therapy;
(c) Any organ bank storage facility - For medical or dental
education, research, therapy, or transplantation; and
(d) Any specified individual - For therapy or transplantation
needed by him.
Section 7. Duty of Hospitals. A hospital authorized to receive organ
donations or to conduct transplantation shall train qualified personnel and
their staff to handle the task of introducing the organ donation program in a
humane and delicate manner to the relatives of the donor-decedent
enumerated in Section 4 hereof. The hospital shall accomplish the necessary
form or document as proof of compliance with the above requirement.
Section 8. Manner of Executing a Legacy.
(a) Legacy of all or part of the human body under Section 3 hereof
may be made by will. The legacy becomes effective upon the death
of the testator without waiting for probate of the will. If the will is
not probated, or if it is declared invalid for testamentary purposes,
the legacy, to the extent that it was executed in good faith, is
nevertheless valid and effective.
(b) A legacy of all or part of the human body under Section 3
hereof may also be made in any document other than a will. The
legacy becomes effective upon death of the testator and shall be

respected by and binding upon his executor or administrator,

heirs, assigns, successors-in-interest and all members of the
family. The document, which may be a card or any paper designed
to be carried on a person, must be signed by the testator in the
presence of two witnesses who must sign the document in his
presence. If the testator cannot sign, the document may be signed
for him at his discretion and in his presence, in the presence of
two witnesses who must, likewise, sign the document in the
presence of the testator. Delivery of the document of legacy during
the testator's lifetime is not necessary to make the legacy valid.
(c) The legacy may be made to a specified legatee or without
specifying a legatee. If the legacy is made to a specified legatee
who is not available at the time and place of the testator's death,
the attending physician or surgeon, in the absence of any
expressed indication that the testator desired otherwise, may
accept the legacy as legatee. If the legacy does not specify a
legatee, the legacy may be accepted by the attending physician or
surgeon as legatee upon or following the testator's death. The
physician who becomes a legatee under this subsection shall not
participate in the procedures for removing or transplanting a part
or parts of the body of the decedent.
(d) The testator may designate in his will, card or other document,
the surgeon or physician who will carry out the appropriate
procedures. In the absence of a designation, or if the designee is
not available, the legatee or other persons authorized to accept the
legacy may authorize any surgeon or physician for the purpose.
Section 9. Manner of Executing a Donation. Any donation by a person
authorized under subsection (a) of Section 4 hereof shall be sufficient if it
complies with the formalities of a donation of a movable property.
In the absence of any of the persons specified under Section 4 hereof and in
the absence of any document of organ donation, the physician in charge of
the patient, the head of the hospital or a designated officer of the hospital
who has custody of the body of the deceased classified as accident, trauma,
or other medico-legal cases, may authorize in a public document the removal
from such body for the purpose of transplantation of the organ to the body of
a living person: Provided, That the physician, head of hospital or officer
designated by the hospital for this purpose has exerted reasonable efforts,
within forty-eight (48) hours, to locate the nearest relative listed in Section 4
hereof or guardian of the decedent at the time of death.
In all donations, the death of a person from whose body an organ will be
removed after his death for the purpose of transplantation to a living person,
shall be diagnosed separately and certified by two (2) qualified physicians
neither of whom should be:
(a) A member of the team of medical practitioners who will effect
the removal of the organ from the body; nor
(b) The physician attending to the receipt of the organ to be
removed; nor
(c) The head of hospital or the designated officer authorizing the
removal of the organ.
Section 10. Person(s) Authorized to Remove Transplantable Organs.
Only authorized medical practitioners in a hospital shall remove and/or
transplant any organ which is authorized to be removed and/or transplanted
pursuant to Section 5 hereof.
Section 11. Delivery of Document of Legacy or Donation. If the legacy or
donation is made to a specified legatee or donee, the will, card or other
document, or an executed copy thereof, may be delivered by the testator or
donor, or is authorized representative, to the legatee or donee to expedite
the appropriate procedures immediately after death. The will, card or other
document, or an executed copy thereof, may be deposited in any hospital or
organ bank storage facility that accepts it for safekeeping or for facilitation or
procedures after death. On the request of any interested party upon or after

the testator's death, the person in possession shall produce the document of
legacy or donation for verification.
Section 12. Amendment or Revocation of Legacy or Donation.
a) If he will, card or other document, or an executed copy thereof,
has been delivered to a specific legatee or donee, the testator or
donor may amend or revoke the legacy or donation either by:
(1) The execution and delivery to the legatee or donee
of a signed statement to that effect; or
(2) An oral statement to that effect made in the
presence of two other persons and communicated to
the legatee or donee; or

Section 17. Repealing Clause. All laws, decrees, ordinances, rules and
regulations, executive or administrative orders, and other presidential
issuance inconsistent with this Act, are hereby repealed, amended or
modified accordingly.
Section 18. Separability Clause. The provisions of this Act are hereby
deemed separable. If any provision hereof should be declared invalid or
unconstitutional, the remaining provisions shall remain in full force and
effect.
Section 19. Effectivity. This Act shall take effect after fifteen (15) days
following its publication in the Official Gazette or at least two (2) newspapers
of general circulation.
Approved: January 7, 1992

(3) A statement to that effect during a terminal illness

or injury addressed to an attending physician and
communicated to the legatee or donee; or
(4) A signed card or document to that effect found on
the person or effects of the testator or donor.
(b) Any will, card or other document, or an executed copy thereof,
which has not been delivered to the legatee or donee may be
revoked by the testator or donor in the manner provided in
subsection (a) of this Section or by destruction, cancellation or
mutilation of the document and all executed copies thereof.
Any legacy made by a will may also be amended or revoked in the
manner provided for amendment or revocation of wills, or as
provided in subsection (a) of this Section.
Section 13. Rights and Duties After Death.
(a) The legatee or donee may accept or reject the legacy or
donation as the case may be. If the legacy of donation is of a part of
the body, the legatee or donee, upon the death of the testator and
prior to embalming, shall effect the removal of the part, avoiding
unnecessary mutilation. After removal of the part, custody of the
remainder of the body vests in the surviving spouse, next of kin or
other persons under obligation to dispose of the body of the
decedent.
(b) Any person who acts in good faith in accordance with the
terms of this Act shall not be liable for damages in any civil action
or subject to prosecution in any criminal proceeding of this Act.
Section 14. International Sharing of Human Organs or Tissues. Sharing
of human organs or tissues shall be made only through exchange programs
duly approved by the Department of Health: Provided, That foreign organ or
tissue bank storage facilities and similar establishments grant reciprocal
rights to their Philippine counterparts to draw organs or tissues at any time.
Section 15. Information Drive. In order that the public will obtain the
maximum benefits from this Act, the Department of Health, in cooperation
with institutions, such as the National Kidney Institute, civic and nongovernment health organizations and other health related agencies, involved
in the donation and transplantation of human organs, shall undertake a
public information program.
The Secretary of Health shall endeavor to persuade all health professionals,
both government and private, to make an appeal for human organ donation.
Section 16. Rules and Regulations. The Secretary of Health, after
consultation with all health professionals, both government and private, and
non-government health organizations shall promulgate such rules and
regulations as may be necessary or proper to implement this Act.