Makati Leasing and Finance Corp., vs Wearever Textile Mills, Inc.

,
122 SCRA 296
GR No. L-58469
May 16, 1983
FACTS
Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati
Leasing and Finance Corporation covering certain raw materials and machinery.
Upon default, Makati Leasing fi led a petition for judicial foreclosure of the
properties mortgaged. Acting on Makati Leasings application for replevin, the lower
court issued a writ of seizure. Pursuant thereto, the sheriff enforcing the seizure
order seized the machinery subject matter of the mortgage. In a petition for
certiorari and prohibition, the Court of Appeals ordered the return of the machinery
on the ground that the same can-not be the subject of replevin because it is a real
property pursuant to Article415 of the new Civil Code, the same being attached to
the ground by means of bolts and the only way to remove it from Wearever textiles
plant would be to drill out or destroy the concrete fl oor. When the motion for
reconsideration of Makati Leasing was denied by the Court of Appeals, Makati
Leasing elevated the matter to the Supreme Court.
ISSUE
Whether the machinery in suit is real or personal property from the point of view of
the parties.
HELD
There is no logical justification to exclude the rule out the present case from the
application of the pronouncement in Tumalad v Vicencio, 41 SCRA 143. If a house of
strong materials, like what was involved in the Tumalad case, may be considered as
personal property for purposes of executing a chattel mortgage thereon as long as
the parties to the contract so agree and no innocent third party will be
prejudicedthereby, there is absolutely no reason why a machinery, which is movable
in its natureand 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 the denying the existence of the chattel mortgage.
In rejecting petitioners assertion on the applicability of the Tumalad doctrine, the
CA lays stress on the fact that the house involved therein was built on a land that
did not belong to the owner of such house. But the law makes no distinction with
respect to the ownership of the land on which the house is built and We should not
lay down distinctions not contemplated by law.
It must be pointed out that the characterization by the private respondent is
indicative of the intention and impresses upon the property the character
determined by the parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44
Phil. 630, it is undeniable that the parties to a contract may, by agreement, treat as

personal property that which by nature would be a real property as long as no

interest of third parties would be prejudiced thereby.
The status of the subject matter as movable or immovable property was not raised
as an issue before the lower court and the CA, except in a supplemental
memorandum in support of the petition filed in the appellate court. There is no
record showing that the mortgage has been annulled, or that steps were taken to
nullify the same. On the other hand, respondent has benefited from the said
contract.
Equity dictates that one should not benefit at the expense of another.
As such, private respondent could no longer be allowed to impugn the efficacy of
the chattel mortgage after it has benefited therefrom.
Therefore, the questioned machinery should be considered as personal property.

Author: Arcellana
Rubiso and Gelito v Rivera
Petition
: appeal by bill of exceptions
Plaintiffs and appellees:

Fausto Rubiso and Bonifacio Gelito

Defendant and Appellant:
Florentino Rivera
Ponencia: Torres, J

DOCTRINE:The requisite of registration in the registry of the purchase of a vesselis

necessary and indispensable in order that the purchaser's rights aremaintained
against a claim by third persons.
FACTS:1.
It was alleged in the complaint that the plaintiffs were the owners ofa pilot boat
Valentina
stranded in Tingloy in Bauan, Batangas andRivera took charge of the boat, claiming
to be the owner, and plaintiffsthus unable to derive profit from it.2. The boat is
owned by "Gelito and Co" with co-partners Gelito for 2/3share and Sy Qui for 1/3
share. Afterwards Gelito sold his share to SyQui.3. Sy Qui then sold the boat to
Rivera for 2500 pesos on Jan 4, 1915and
had it registered in the Bureau of Customs on March 17,1915
.4. Then to enforce a payment of a certain sum of money, the boat wasbought by
Rubiso in a public auction on January 23, 1915 and
had itregistered in the Collector of Customs on January 27, 1915.5.
The complaint asks the defendant for indemnification and thedelivery of the boat.
ISSUE:1.
WoNRubiso has a better right to the boat
Valentina.
PROVISIONS:Article 573 of the Code of Commerce:
Merchant vessels constituteproperty which may be acquired and transferred by any
of themeans recognized by law. The acquisition of a vessel mustappear in a written
instrument, which shall not produce any effectwith respect to third persons if not
inscribed in the registry ofvessels.

RULING + RATIO:
1.
YES.

Even though Rivera was the first one who bought the boat,it was Rubiso who
registered the vessel first in the office ofthe Collector of Customs. Rivera only
registered the vesselon March 17, 1915 while Rubiso had it registered onJanuary 27,
1915 in the same month of the purchase.

With respect to the rights of the two purchasers, whicheverof them who registered
the vessel first is the one entitledby the protection of the law, which considers him
theabsolute owner of the boat and free from encumbrancesand claims.

Rivera is now considered a third person who was directlyaffected by the

registration. Ships and vessels, whethermoved by steam or sail, partake the nature
of real propertyon account of their value in the world of commerce.
DISPOSITION:
Judgment is affirmed with costs against appellant.

G.R. No. L-3279

March 11, 1908

THE CITY OF MANILAvs. THE INSULAR GOVERNMENT, ET AL.

(10 Phil., 327)

FACTS:
The city of Manilafiled a petition in the Court of Land Registration for the registration
of a certain parcel or tract of land situated in Paco, a district of the said city.The said
city alleged that it was the absolute owner of the said land; that said land was
assessed by the city of Manila in the sum of $1,780; that there existed no liens of
whatever character against said land; that the land was unoccupied; that the said
city obtained title to the said land by reason of being the successor to all the rights
and actions of the old city of Manila (ayuntamiento de Manila), to which said
property formerly belonged.
The Insular Government opposed the inscription of the said land to the petitioners
name upon the ground that the land in question is the property of the Government
of the United States under the control of the Insular Government.
One of the examiners of titles of the Court of Land Registration made an
examination of the title claimed by the petitioner and reported to the judge of the
Court of Land Registration the application filed by the city of Manila is not
accompanied by any document relative to its alleged ownership; that in the office of
the register of deeds there is no record of any act or contract opposing the claim of
the applicant; nor does there appear, from the investigations held, any fact contrary
to those quoted in the application; and that the city of Manila, in order to acquire
title to the land above mentioned, must show the ownership which the
former ayuntamiento had over said land. Therefore, the examiner was of the
opinion that the title of the City of Manila is defective and cannot be registered.
The cause was duly brought on for trial and during the trial of said cause the
petitioner attempted to establish that the old city of Manila, its predecessor, had
rented said land, had received rents therefor, and in a general way had
administered the same.
The respondent maintained that the land in question was public land, belonging to
the Central Government and the same had never been granted to any person or
corporation or municipality by the Spanish Government.
The judge of the said court granted the registration of the rest of said described
property in favor of the city.
Against this order the respondent gave notice of his intention to appeal.

ISSUE:
Whether or not the questioned property is owned by the city of Manila.

HELD:
No. The Supreme Court ruled that the mere renting of property and receiving the
rent therefor cannot, of themselves, in the absence of other proof, support a claim
of ownership of such property.
One of the earliest provisions of law relating to the rights of pueblos in the insular
possessions of the Spanish Government is that of settlements and pueblos of
natives.
Article 53 of the Ordinances of Good Government indicates that 1) that the King
continued to be the absolute owner of said lands; 2) that the pueblos were only
given the mere usufruct of the same; 3) that the King might at any time annul such
grant; and 4) that a designation, of the particular land so granted, was a necessary
prerequisite for the holding of the same for the purposes indicated, by the said
pueblo.
The municipalities of the Philippine Islands are not entitled, by right, to any part of
the public domain for use as communal lands. The Spanish law provided that the
usufruct of a portion of the public domain adjoining municipal territory might be
granted by the Government for communal purposes, upon proper petition, but, until
granted, no rights therein passed to the municipalities, and, in any event, the
ultimate title remained in the sovereign.
The petitioner herein not having presented proof showing that the land in question
had been granted to it by the former sovereign in these Islands, and not having
shown that it was entitled to said lands by virtue of some law of the present
sovereign of these Islands, the Court of Land Registration was not empowered to
grant the registration of said lands in favor of said petitioner. The judgment,
therefore, of the lower court is hereby reversed.

Government v. Cabangis
53 Phil. 112

FACTS: In 1986, A owned a parcel of land, but because of the action of the waves of
Manila Bay, part of said land was gradually submerged in the sea. It remained
submerged until 1912 when the government decided to make the necessary
dredging to reclaim the land from the sea. As soon as the land had been recovered
A took possession of it.

ISSUE: To which does the ownership of the reclaimed land belong to?
HELD: The government owns the reclaimed land in the sense that it has become
property of public dominion, because in letting it remained submerged, A may be
said to have abandoned the same. Having become part of the sea or the seashore,
it became property for public use. When the government took steps to make it land
again, its status as public dominion remained unchanged; therefore, A is not
entitled to the land.

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