MOVABLE PROPERTY

1. Leung Yee vs. Strong Machinery

- The building is real property, therefore, its sale as annotated in the Chattel
Mortgage Registry cannot be given the legal effect of registration in the Registry of
Real Property. The mere fact that the parties decided to deal with the building as
personal property does not change its character as real property. Thus, neither the
original registry in the chattel mortgage registry, nor the annotation in said registry
of the sale of the mortgaged property had any effect on the building. However,
since the land and the building had first been purchased by “Strong Machinery”
(ahead of Leung Yee), and this fact was known to Leung Yee, it follows that Leung
Yee was not a purchaser in good faith, and should therefore not be entitled to the
property. “Strong Machinery” thus has a better right to the property.

- The disputed building was considered by the court as real property. The mere fact
that properties seem to have dealt with it separately and apart from the land
would change its character as real property. Hence, such mortgage would still be a
real estate mortgage for the building that served as security and the executed
chattel mortgage and its consequences cannot be said to have any legal effect.

2. Davao Sawmill Co. v. Castillo

- As a rule, the machinery should be considered as personal, since it was not placed
on the land by the owner of said land. Immobilization by destination or purpose
cannot generally be made by a person whose possession of the property is only
TEMPORARY, otherwise we will be forced to presume that he intended to give the
property permanently away in favor of the owner of the premises.

- Machinery which is movable in its nature only becomes immobilized when placed
in a plant by the owner of the property or plant, but not when so placed by a
tenant, a usufructuary, or any person having only a temporary right, unless such
person acted as the agent of the owner.

3. Machinery & Engineering Supplies vs CA

- The SC held that the special civil action known as replevin, governed by Rule 62 of
Court, is applicable only to personal property. When the sheriff repaired to the
premises of responden tcompany, 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. For these reasons, they were already immovable
 property pursuant to paragraphs 3 and 5 of Article 415 of Civil Code of the
Philippines, which are substantially identical to paragraphs 3 and 5 of Article 334 of
the Civil Code of Spain. As such immovable property, they were not subject to
replevin.

4. Associated Insurance vs Iya

- The building is subject to the real estate mortgage, in favour of Iya. Iya’s right to
foreclose not only the land but also the building erected thereon is recognized.
While it is true that real estate connotes the land and the building constructed
thereon, it is obvious that the inclusion of the building, separate and distinct from
the land, in the enumeration of what may constitute real properties ( Art 415),
could only mean that a building is by itself an immovable property. Moreover, in
view of 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.

5. Mindanao Bus Co. vs City Assessor and Treasurer

- “Movable equipment 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 equipment 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 incidentals- acquired as movables
and used only for expediency to facilitate and or improve its service. Even without
such tools and equipment, its business may be carried on, as petitioner has carried
on, without such equipment, before the war. The transportation business could be
carried on without the repair or service shops if its rolling equipment is repaired or
serviced in another shop belonging to another.
- Aside from the element of essentiality, Art 415 (5) of the CC also requires that the
industry or works be carried on in a building or on a piece of land. But in the case at
bar the equipment 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 law. Said equipment may not, therefore, be deemed
real property.

6. Tumalad vs. Vicencio

- Certain deviations have been allowed from the general doctrine that buildings are
immovable property such as when through stipulation, parties may agree to treat
as personal property those by their nature would be real property. This is partly
based on the principle of estoppel wherein the principle is predicated on
statements by the owner declaring his house as chattel, a conduct that may
 conceivably stop him from subsequently claiming otherwise. In the case at bar,
though there be no specific statement referring to the subject house as personal
property, yet by ceding, selling or transferring a property through chattel mortgage
could only have meant that defendant conveys the house as chattel, or at least,
intended to treat the same as such, so that they should not now be allowed to
make an inconsistent stand by claiming otherwise.

7. Punsalan, Jr. vs VDA. De Lacsamana

- Warehouse claimed to be owned by petitioner is an immovable or real property.
Buildings are always immovable under the code. A building treated separately from
the land on which it is stood is immovable property and the mere fact that the
parties to a contract seem to have dealt with it separate and apart from the land on
which it stood in no wise changed its character as immovable property.
8. Makati Leasing and Finance Corp. vs Wearever Textile Mills, Inc
- The seized drive motor can be a subject of a chattel mortgage. The SC found no
logical justification to exclude and role out, as the the appellate court did, the
present case from the application of the pronouncement in Tumalad vs Vicencio
case where a similar, if not identical issue was raised. If a house of strong materials,
like what was involved in Tumalad case may be considered as personal property for
a purpose 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.

9. Meralco Securities Industrial Corporation vs Central Board of Assessment Appeals

- The Pipeline are subject to realty tax. Section 2 of the Assessment law provides that
the realty tax is due “on real property, including the land, buildings, machinery and
other improvements.” This provision is reproduced with some modification in
section 38, Real Property tax code, which provides that “There shall be levied,
assessed and collected annual ad valorem tax on real property such as land,
buildings machinery and other improvements affixed or attached to real property.
Hence the pipeline system in question is indubitably a construction adhering to the
soil. It is attached to the land in such a way that it cannot be separated therefrom
without dismantling the steel pipes which were welded to form the pipeline.

10. Manila Electric Co. vs Central Board of Assessment Appeals

- While the two storage tanks are not embodied in the land, they may nevertheless
be considered as improvements in the land, enhancing its utility and rendering it
useful to the oil industry. For purposes of taxation, the term real property may
include things, which should generally be considered as personal property. It is
familiar phenomenon to see things classified as real property for purposes of
taxation which on general principle may be considered as personal property.