LOPEZ V.

OROSA AND PLAZA

THEATRE
103 SCRA 98
FACTS:
1. Lopez was engaged in business under the name Lopez-Castelo Sawmill.
2. Orosa, who lived in the same province as Lopez, one dayapproached Lopez and invited the latter to
make an investment inthe theatre business.
3. Orosa, his family and close friends apparently were forming acorporation named Plaza Theatre.
4. Lopez expressed his unwillingness to invest. Nonetheless, therewas an oral agreement between
Lopez and Orosa that Lopezwould be supplying the lumber for the construction of the theatre.The
terms were the following: one, Orosa would be personallyliable for any account that the said
construction would incur; two,payment would be by demand and not by cash on delivery.
5. Pursuant to the agreement, Lopez delivered the lumber for theconstruction. Lopez was only paid
one-third of the total cost.
6. The land on which the building has been erected was previously owned by Orosa, which was later on
purchased by the corporation.
7. Due to the incessant demands of Lopez, the corporation mortgaged its properties.
8. On an earlier relevant date, the corporation obtained a loan with Luzon Surety Company as surety
and in turn, the corporation executed a mortgage over the land and building. In the registration of the
land under Act 496, such mortgage wasnt revealed.
9. Also due to the demands of Lopez, Orosa issued a deed of assignment over his shares of stock in the
corporation.
10. As there was still an unpaid balance, Lopez filed a case against Orosa and Plaza theatre. He asked
that Orosa and Plaza theatre be held liable solidarily for the unpaid balance; and in case defendants
failed to pay, the land and building should be sold in public auction with the proceeds to be applied to
the balance; or
that the shares of stock be sold in public auction. Lopez also had lis pendens be annotated in the OCT.
11. The trial court decided that there was joint liability between defendants and that the materialmans
lien was only confined tothe building.
ISSUES:
W/N the materialmens lien for the value of the materials used in the construction of the building
attaches to said structure alone and doesnt extend to the land on which the building is adhered to?
HELD:
The contention that the lien executed in favor of the furnisher of materials used for the construction and
repair of a building is also extended to land on which the building was constructed is without merit. For
while it is true that generally, real estate connotes the land and the building constructed thereon, it is
obvious that the inclusion of the building in the enumeration of what may constitute real properties
could only mean one thingthat a building is by itself an immovable property. Moreover, in the
absence of
any specific provision to the contrary, a building is an immovable property irrespective of whether or
not said structure and the land on which it is adhered to belong to the same owner.
Appelant invoked Article 1923 of the Spanish Civil Code, which providesWith respect to
determinate real property and real rights of the debtor, the following are preferred: xxx Credits for
reflection, not entered or recorded, and only with respect to other credits different from those
mentioned in four next preceding paragraphs. Close examination of the abovementioned provision
reveals that the law gives preference to unregistered refectionary credits only with respect to the real
estate upon which the refectionary or work was made. This being so, the inevitable conclusion must be
that the lien so created attaches merely to the immovable property for the construction or repair of
which the obligation was incurred. Therefore, the lien in favor of appellant for the unpaid value of the
lumber used in the construction of the building attaches only to said structure and to no other property
of the obligors.