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DAHICAN AMERICAN LUMBER CORP, AND CONNELL BROS. CO. Topic: Immovable or real property and its
GR No. L-17500 categories (Art 415)
Date: May 16 1967
ATLANTIC sold and assigned all its rights in the Dahican Lumber concession to DALCO for $500,000 but paid only
$50,000. To obtain this, DALCO secured various loans from the BANK worth P200,000 and $250,000 from Export-
Import Bank of Washington DC evidenced by 5 promissory notes of $50,000 each, but w/ diff dates. DALCO also
mortgaged the following:
5 parcels of land, inclusive of all buildings and improvements situated in it (Camarines Norte)
All personal property of the mortgagor located in its place of business
On the same date, DALCO executed a 2nd mortgage in favor of ATLANTIC for the same properties mentioned
above, to secure payment of the unpaid balance of $450,000. Both deeds contained a provision extending mortgage
lien to properties to be acquired (after acquired properties). Both deeds were registered in the Office of the Register
of Deeds in Cam. Norte.
DAMCO and DALCO failed to pay 5th promissory note. Subsequently, DALCO purchased various machineries,
equipment, spare parts, etc. so the BANK requested DALCO to submit complete lists of said properties but failed to
do so.
The Board of Directors of DALCO passed a resolution agreeing to rescind the sales of equipment by CONNEL and
DAMCO to it. So it was executed but the BANK demanded that the agreement be cancelled but CONNEL and
DAMCO refused to do so.
ATLANTIC and BANK commenced foreclosure proceedings in CFI against DALCO and DAMCO. They also filed
an ex-parte application to restrain DALCO from removing its properties.
CONNELL filed a motion for intervention saying that he is the owner of these properties w/c DALCO acquired
subsequent to the mortgages sought to be foreclosed.
CFI ruled in favor of the petitioners.
Should the deed also be registered in the Chattel Mortgage Registry insofar as it covered the after acquired
Ruling NO.

Art. 415 does not define real property but enumerates what are considered as such among them being machinery, receptacles,
instruments or replacements intended by owner of the tenement for an industry or works which may be carried on in a building
or on a piece of land, and shall tend directly to meet the needs of the said industry/works

It is not disputed in the case at bar that the after acquired properties were purchased by DALCO in connection with, and for
use in the development of its lumber concession and that they were purchased in addition to, or in replacement of those already
existing in the premises on Jul. 30, 1950. In law, therefore, they must be deemed immobilized, with the result that the real estate
mortgages involved which were registered as such, does not have to be registered a 2 nd time as chattel mortgages in order to
bind the properties to affect third parties.

Doctrine Notes:
ATLANTIC Atlantic Gulf and Pacific Company
DALCO Dahican Lumber Company
DAMCO Dahican American Lumber Corp.
BANK Peoples Bank and Trust Co.