PROPERTY

2)
G.R. No. L-50008 August 31, 1987
PRUDENTIAL BANK, petitioner,
vs.
HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III, Court of First
Instance of Zambales and Olongapo City; FERNANDO MAGCALE & TEODULA
BALUYUT-MAGCALE, respondents.

Facts:
An amount of Seventy Thousand Pesos (P70,000.00) loan was made by Plaintiffs spouses
Fernando Magcale and Teodula Baluyut-Magcale from Prudential Bank on November 19, 1971.
Thereafter, a Deed of Real Estate Mortgage over a 2-storey, semi-concrete residential building
with warehouse spaces and a first class residential land identified as Lot No. 720 was entered
into by both parties in order to secure the payment of the loan and was then registered on
November 23, 1971 under the Provisions of Act 3344 with the Registry of Deeds of Zambales.
Another Deed of Real Estate Mortgage in the amount of Twenty Thousand Pesos (P20,000.00)
was executed by the same parties on May 2, 1971 wherein the same properties were mortgaged
and was also registered on May 2,1973 with the Registry of Deeds, this time in Olongapo City.

A Miscellaneous Sales Patent No. 4776 under Act No. 730 was issued on April 24, 1972 and
while on May 15, 1972, the ex-officio Registry of Deeds of Zambales issued an Original
Certificate of Title No. P-2554 in the name of Plaintiff Fernando Magcale. Since the plaintiffs
failed to pay such obligation, their Deeds of Real Estate Mortgage were directly foreclosed. A
public auction for the properties being mortgaged still commenced unto the highest bidder
regardless of the written requests to cease to proceed with the public auction sale made by the
plaintiffs through counsel.

Issue:
Whether or not a building found on a land can be established in a valid real estate mortgage.

Held:
Yes. The SC, as immovable property are enumerated in Article 415 of the Civil Code, ruled that,
"it is obvious that the inclusion of "building" separate and distinct from the land, in said
provision of law can only mean that a building is by itself an immovable property."(Lopez vs.
Orosa, Jr., et al)

Thus, it is to be clear that a building built in a certain property whether there is or no

improvements found thereon, is to be considered real or immovable property where a deed of
mortgage may made it possible and is valid through transferring and conveyance of such
property.