LADERA VS.

HODGES
G.R. NO. 8027-R, VOL. 48, NO. 12, O.G. 5374, SEPTEMBER 23, 1952)

FACTS:
Hodges entered into a contract promising to sell a lot to Ladera under certain terms and conditions. One
of which is that the contract may be rescinded and annulled in case Ladera failed to make the monthly
payment 60 days after it is due.

After the execution of the contract, Ladera built a house on the lot assessed at 4,500 pesos. However,
Ladera failed to pay the agreed installments so Hodges rescinded the contract and filed an action for
ejectment.

The MTC ruled in favor of Hodges and issued an alias writ of execution. Pursuant thereto, the sheriff
levied upon all rights, interests and participation over the house. Notices of sale were posted, however,
were not published in a newspaper of general circulation.
An auction sale was then conducted but Ladera was not able to attend as she had gone to Manila. The
house was then sold to one Avelina Magno as the highest bidder. Meanwhile, Ladera sold the same lot
to one Manuel Villa and on the same day purchased the house from Magno for 200 pesos. This,
however, was not recorded.
Ladera then returned to Iloilo and learned what happened. She went to see the sheriff and represented
that the property can still be redeemed and so she gave him 230 pesos. It does not appear, however,
that it was turned over to Hodges. Thereupon, Ladera filed an action against Hodges, the sheriff, Magno
and Villa to set aside the sale and recover the house.

The lower court ruled in favor of Ladera on the ground of non-compliance based on Rule 39 of the Rules
of Court. On appeal, Hodges contends that the house, built on a lot owned by another, should be
regarded as movable or personal property. The sale of the land was also made without proper
publication required by law.

ISSUE:
Was the house movable or immovable?

RULING:
Immovable.

As enumerated in the Civil Code, immovable property includes lands, buildings, roads and constructions
of all kinds adhered to the soil. The law does not make any distinction whether or not the owner of the
lot was the one who built the construction.

Also, Ladera did not declare his house to be a chattel mortgage. The object of the levy or sale was real
property and its publication in a newspaper of general circulation was indespensible. Without it, the
execution sale was void.

In addition, Magno, the alleged purchaser at the auction sale, was a mere employee of Hodges and the
low bid made by her as well as the fact that she sold the house to Villa on the same day Hodges sold him
the land, proves that she was merely acting for and in behalf of Hodges.
In the sale of immovables, the lack of title of the vendor taints the rights of the subsequent purchasers.

Possession in good faith is not equivalent to title.

The principles of accession regard buildings and constructions as mere accessories to the land on which
it is built, it is logical that said accessories should partake the nature of the principal thing.

Bicerra v. Teneza
[G.R. No. L-16218. November 29, 1962.]
En Banc, Makalintal (J): 10 concur.

FACTS:
The Bicerras are supposedly the owners of the house worth P200, built on a lot owned by them in
Lagangilang, Abra; which the Tenezas forcibly demolished in January 1957, claiming to be the owners
thereof. The materials of the house were placed in the custody of the barrio lieutenant. The Bicerras
filed a complaint claiming actual damages of P200, moral and consequential damages amounting to
P600, and the costs. The CFI Abra dismissed the complaint claiming that the action was within the
exclusive (original) jurisdiction of the Justice of the Peace Court of Lagangilang, Abra.

ISSUE:
W/N the action involves title to real propety.
W/N the dismissal of the complaint was proper.

HELD:
The Supreme Court affirmed the order appealed. Having been admitted in forma pauperis, no costs
were adjudged.
1. House is immovable property even if situated on land belonging to a different owner; Exception,
when demolished
A house is classified as immovable property by reason of its adherence to the soil on which it is built
(Article 415, paragraph 1, Civil Code). This classification holds true regardless of the fact that the house
may be situated on land belonging to a different owner. But once the house is demolished, as in this
case, it ceases to exist as such and hence its character as an immovable likewise ceases.

2. Recovery of damages not exceeding P2,000 and involving no real property belong to the Justice of the
Peace Court
The complaint is for recovery of damages, the only positive relief prayed for. Further, a declaration of
being the owners of the dismantled house and/or of the materials in no wise constitutes the relief itself
which if granted by final judgment could be enforceable by execution, but is only incidental to the real
cause of action to recover damages. As this is a case for recovery of damages where the demand does
not exceed PhP 2,000 and that there is no real property litigated as the house has ceased to exist, the
case is within the jurisdiction of the Justice of the Peace Court (as per Section 88, RA 296 as amended)
and not the CFI (Section 44, id.)

Leung Yee v. Strong Machinery Co.

37 Phil. 644

FACTS:
The "Compania Agricola Filipina" purchased from "Strong Machinery Co." rice-cleaning machines which
the former installed in one of its buildings. As security for the purchase price, the buyer executed a
CHATTEL MORTGAGE on the machines and the building on which they had been installed. Upon buyer's
failure to pay, the registered mortgage was foreclosed, and the building was purchased by the seller, the
"Strong Machinery Co." This sale was annotated in the Chattel Mortgage Registry. Later, the "Agricola"
also sold to "Strong Machinery" the lot on which the building had been constructed. This sale was not
registered in the Registry of Property but the Machinery Co. took possession of the building and the lot.

Previously however, the same building has been purchases at a sheriff's sale by Leung Yee, a creditor of
Agricola, although Leung Yee knew all the time of the prior sale in favor of "Strong Machinery." The sale
in favor of Leung Yee was recorded in the Registry. Leung Yee now sues to recover the property from
"Strong Machinery."

ISSUE:
Who has a better right to the property?

HELD:
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.
 STANDARD OIL CO. vs. JARAMILLO
44 Phil. 631

FACTS:
On November 27, 1922, Gervasia de la Rosa, Vda. de Vera, was the lessee of a parcel of land situated in
the City of Manila and owner of the house of strong materials built thereon, upon which date she
executed a document in the form of a chattel mortgage to convey to the Standard Oil. Co. by way of
mortgage both the leasehold interest in said lot and the building to which it stands After said document had been
duly acknowledged and delivered, it was then presented to Joaquin Jaramillo, Register of Deeds of
the City of Manila, for the purpose of having the same recorded. Upon examination of the instrument,
the Jaramillo was of the opinion that it was not chattel mortgage, for the reason that the interest
therein mortgaged did not appear to be personal property, within the meaning of the Chattel Mortgage Law,
and registration was refused on this ground only.

ISSUE:
Whether or not the deed may be registered in the chattel mortgage registry?

HELD:
Yes it may be registered. The duties of a register of deeds in respect to the registration of chattel
mortgages are purely of a ministerial character, and he is clothed with no judicial or quasi-judicial power
to determine the nature of the property, whether real or personal, which is the subject of themortgage.
Generally speaking, he should accept the qualification of the property adapted by the person who
presents the instrument for registration and should place the instrument on record, upon payment of
the proper fee, leaving the effects of registration to be determined by the court if such question should
arise for legal determination. The efficacy of the act of recording a chattel mortgage consists in the fact
that registration operates as constructive notice of the existence of the contract, and the legal effects of
the instrument must be discovered in the document itself, in relation with the fact of notice.
Registration adds nothing to the instrument, considered as a source of title, and
affects nobody's rights except as a species of constructive notice.

Sibal v. Valdez 50 Phil. 512

FACTS: In a case brought by plaintiff against defendant, the latter won. For the purpose of satisfying the
judgment won by the defendant, the sheriff attached the sugar cane that was then growing on the lots
of the plaintiff. Said lots incidentally had already been previously attached by another judgment creditor
of the plaintiff. Within the one-year period given by law for redemption, the plaintiff wanted to redeem
the lots from one creditor, and the sugar cane from the other creditor. The lots were redeemed, the
redemption of the sugar cane was however refused by the defendant, who contended that the sugar
cane was personal property, and therefore could not be the subject of the legal redemption sought to
be enforced. The plaintiff upon the other hand claimed that the sugar cane was real property for same
could be considered as growing fruits under par. 2 of Art. 415. Issue: How should the sugar cane be
regarded as real property or as personal property?
HELD: The sugar cane, although considered as growing fruits and therefore ordinarily real property
under Par. 2 of Art. 415 of the Civil Code, must be regarded as PERSONAL PROPERTY for purposes of the
Chattel Mortgage Law, and also for purposes of attachment, because as ruled by the Louisiana Supreme
Court, the right to the growing crops mobilizes (makes personal, as contra distinguished from
immobilization)the crops by ANTICIPATION. More specifically, it said that the existence of a right on the
growing crop is a mobilization by anticipation, a gathering as it were, in advance, rendering the crop
movable. (See Lumber Co. v. Sheriff, 106 La. 418).

Davao Sawmill Co. v. Castillo 61 Phil. 709

FACTS:
A tenant placed machines for use in a sawmill on the land of the landlord.

ISSUE:
Is the machinery real or personal?
HELD:
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.

Peoples Bank and Trust Co. v. Dahican Lumber Co.

L-17500, May 16, 1967

FACTS:
Several parcels of land were the objects of a real estate mortgage. The mortgage deed also stated that
the mortgage included essential after-acquired properties such as machinery, fixtures, tools, and
equipment. The real mortgage was then registered as such in the Registry of Deeds.

ISSUE:
SHOULD THE deed also be registered in the chattel mortgage registry insofar as it covered the after
acquired machinery, fixtures, tools and equipment?

HELD:
No more, since the after-acquired properties had been immobilized by destination (they were used in
the development of the lumber concession). [NOTE: Please observe that in this case, the parties to the
real mortgage had treated the after-acquired properties as real properties by agreeing that they would
be automatically subject to the lien of the real estate mortgage executed by them. In the Davao Sawmill
Co. v. Castillo (61 Phil. 709) case, the parties had treated after-acquired properties, including the
machines, as personal property by executing chattel mortgages thereon. Hence, this Davao Sawmill case
cannot apply to the instant case.