DAVAO SAW MILL Co., INC. vs. APRORIANO G.

CASTILLO and DAVAO LIGHT and POWER Co., INC.

G.R. NO. 40411
AUGUST 7, 1935

Contreras, Sean Nikkoleen G.

September 1, 2016
 Facts
Davao Saw Mill is the holder of a lumber concession. The land
on which the business was conducted belonged to another
person(Castillo).
Davao Light and Power Co. filed an action against Davao
Saw Mill and won.

The machineries belonging to the business were levied upon

as personalty by the sheriff.

The machineries in this case were placed and mounted on

foundations of cement.
Issue
Whether or not the machineries in dispute fall under the scope of
real property that can be used as security for mortgage
Arguments
Machineries are movable by nature. It will only become immovable when it is
the owner who placed the machineries, receptacles, instruments or implements,
unless the person is duly authorized by the owner.
DSM placed the machineries in the business establishment.

DSM has, on a number of occasions treated the machinery as personal property

by executing chattel mortgages in favor of third persons.

It can be inferred from its conduct that DSM characterizes the

machineries as chattels, which in turn, make them fall under the scope of
personalty or movable property.

The Contract of Mortgage necessitates the use only of Immovable Property as

security, thus the machineries in dispute do not fall under this category.