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 day approached Lopez and invited the
latter to make an investment in the theatre business.
3. Orosa, his family and close friends apparently were forming a corporation named Plaza
Theatre.
4. Lopez expressed his unwillingness to invest. Nonetheless, there as an oral agreement
between Lopez and Orosa that Lopez would be supplying the lumber for the construction of
the theatre. The terms were the following: one, Orosa would be personally liable 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 the construction. 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 wasn’t 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 be annotated in the OCT.
11. The trial court decided that there was joint liability between defendants and that the
materialman’s lien was only confined to the building.
ISSUES:
W/N the materialmen’s lien for the value of the materials used in the construction of the building
attaches to said structure alone and doesn’t 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 thing—that 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.
(note: article 415 paragraph 3: (3) Everything attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the material or deterioration of
the object; )
Appelant invoked Article 1923 of the Spanish Civil Code, which provides “With 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.