CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

LEUNG YEE vs. FRANK L. STRONG MACHINERY RULING:

COMPANY
The building is real property, therefore, its sale as
Buildings are always immovable. annotated in the Chattel Mortgage Registry can-not be
given the legal effect of registration in the Registry of Real
DOCTRINE: Property. The mere fact that the parties decided to deal with
the building as personal property does not change its
Therefore, the general rule is that a mortgage on a building character as real property. Thus, neither the original
is a real estate mortgage, and not a mortgage on a chattel registry in the chattel mortgage registry, nor the annotation
(personal property) or a chattel mortgage. Indeed, the in said registry of the sale of the mortgaged property had
nature of the building as real property does not depend on any effect on the building. However, since the land and the
the way the parties deal with it. building had first been purchased by “Strong Machinery”
(ahead of Leung Yee), and this fact was known to Leung
FACTS:
Yee, it follows that Leung Yee was not a purchaser in good
The “Compania Agricola Filipina” purchased from “Strong faith, and should therefore not be entitled to the property.
Machinery Co.” rice-cleaning machines which the former “Strong Machinery” thus has a better right to the property.
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. DAVAO SAWMILL CO., INC. vs. APRONIANO G.
Upon buyer’s failure to pay, the registered mortgage was CASTILLO and DAVAO LIGHT & POWER CO., INC.
foreclosed, and the building was purchased by the seller,
the “Strong Machinery Co.” This sale was annotated in the “​Machinery which is movable in its nature only becomes
Chattel Mortgage Registry. Later, the “Agricola” also sold to immobilized when placed in a plant by the owner of the
“Strong Machinery” the lot on which the building had been property or plant, but not when so placed by a tenant,
constructed. This sale was not registered in the Registry of usufructuary, or any person having only a temporary right,
Property BUT the Machinery Co. took possession of the unless such person acted as the agent of the owner.”
building and the lot. Previously however, the same building
had been purchased at a sheriff’s sale by Leung Yee, a FACTS:
creditor of “Agricola,” although Leung Yee knew all the time
of the prior sale in favor of “Strong Machinery.” This sale in A tenant placed machines for use in a saw-mill on the
favor of Leung Yee was recorded in the Registry. Leung Yee land of the landlord. Is the machinery real or
now sues to recover the property from “Strong Machinery.” personal?

Plaintiff operated a sawmill. The land upon which the

business was conducted was leased from another person.
ISSUE: ​What is the classification of the building of strong On the land, the sawmill company erected a building which
materials? housed the machinery used by it. Some of the machines
were mounted and placed on foundations of cement. In the

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

contract of lease, plaintiff agreed to turn over free of charge the Court of Tax Appeals a petition for the review of the
all improvements and buildings erected by it on the assessment.The Court of Tax Appeals having sustained the
premises with the exception of machineries, which shall respondent city assessor's ruling, and having denied a
remain with the plaintiff. In an action brought by the motion for reconsideration, petitioner brought the case to
defendant herein, judgment was rendered against the this Court.
plaintiff. A writ of execution was issued and the machineries
placed on the sawmill were levied upon as personality by ISSUE: WoN the machines in questions are immovable
the sheriff. The question raised in this case involves the properties thus subject to realty taxes?
determination of the nature of the machineries, for the
plaintiff claimed that they were immobilized and they HELD: NO.
belonged to the owner of the land. In holding that the
machinery is not immobilized, the Court explained that
Art. 415. The following are immovable property:
“​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 (5) Machinery, receptacles, instruments or
placed by a tenant, usufructuary, or any person implements intended by the owner of the tenement
for an industry or works which may be carried on in
having only a temporary right, unless such person
acted as the agent of the owner.” a building or on a piece of land, and which tend
directly to meet the needs of the said industry or
works; (Civil Code of the Phil.)

So that movable equipments to be immobilized in

MINDANAO BUS COMPANY​ vs.
contemplation of the law must first be "essential and
THE CITY ASSESSOR & TREASURER and the BOARD OF
principal elements" of an industry or works without
TAX APPEALS of Cagayan de Oro City which such industry or works would be "unable to
function or carry on the industrial purpose for which
Movable equipments to be immobilized in contemplation of it was established." We may here distinguish,
the law must first be "essential and principal elements" of therefore, those movable which become immobilized
an industry or works without which such industry or works by destination because they are ​essential and
would be "unable to function or carry on the industrial principal elements​ in the industry for those which
purpose for which it was established." may not be so considered immobilized because they
are ​merely incidental​, not essential and principal.
FACTS: ​Respondent City Assessor of Cagayan de Oro City
assessed at P4,400 petitioner's above-mentioned Similarly, the tools and equipment in question in this instant
equipment. Petitioner appealed the assessment to the case are, by their nature, not essential and principal
respondent Board of Tax Appeals on the ground that the municipal elements of the petitioner's business of
same are not realty. The Board of Tax Appeals of the City transporting passengers and cargoes by motor trucks. They
sustained the city assessor, so petitioner herein filed with

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

are merely incidentals — acquired as movables and used upon the payment of the necessary expenses. On March 24,
only for expediency to facilitate and/or improve its service. 1998, in implementation of said writ, the sheriff proceeded
Even without such tools and equipment, its business may be to petitioners factory, seized one machinery with [the] word
carried on, as petitioner has carried on, without such that he [would] return for the other machineries.
equipment, before the war. The transportation business
could be carried on without the repair or service shop if its Petitioners filed a motion for special protective order,
rolling equipment is repaired or serviced in another shop invoking the power of the court to control the conduct of its
belonging to another. officers and amend and control its processes, praying for a
directive for the sheriff to defer enforcement of the writ of
Aside from the element of essentiality the replevin.
above-quoted provision also requires that the
This motion was opposed by PCI Leasing , on the ground
industry or works be carried on ​in a building or on a
that the properties [were] still personal and therefore still
piece of land
subject to seizure and a writ of replevin.
But in the case at bar the equipment in question are Petitioners asserted that the properties sought to be seized
destined only to repair or service the transportation [were] immovable as defined in Article 415 of the Civil
business, ​which is not carried on in a building or Code, the parties agreement to the contrary
permanently on a piece of land,​ as demanded by the law. notwithstanding. They argued that to give effect to the
Said equipment may not, therefore, be deemed real agreement would be prejudicial to innocent third parties.
property. They further stated that PCI Leasing [was] estopped from
treating these machineries as personal because the
A transportation business is not carried on in a building or in contracts in which the alleged agreement [were] embodied
the compound. [were] totally sham and farcical.

The sheriff again sought to enforce the writ of seizure and

take possession of the remaining properties. He was able to
take two more, but was prevented by the workers from
SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY
taking the rest.
vs. PCI LEASING AND FINANCE, INC.,
CA’S RULING: Citing the Agreement of the parties, the
FACTS:
appellate court held that the subject machines were
PCI Leasing and Finance, Inc. (PCI Leasing for short) filed personal property, and that they had only been leased, not
with the RTC-QC a complaint for [a] sum of money with an owned, by petitioners. It also ruled that the words of the
application for a writ of replevin. Upon an ex-parte contract are clear and leave no doubt upon the true
application of PCI Leasing, respondent judge issued a writ of intention of the contracting parties.
replevin directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing after 5 days and

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

ISSUE: ​A. Whether or not the machineries purchased and property. Under the circumstances, they are proper subjects
imported by SERGS became real property by virtue of of the Writ of Seizure.
immobilization.
It should be stressed, however, that our holding -- that the
HELD: machines should be deemed personal property pursuant to
the Lease Agreement is good only insofar as the contracting
Main Issue: ​Nature of the Subject Machinery parties are concerned.​22​ ​Hence, while the parties are
bound by the Agreement, third persons acting in good
In the present case, the machines that were the subjects of faith are not affected by its stipulation characterizing
the Writ of Seizure were placed by petitioners in the factory the subject machinery as personal.​ In any event, there
built on their own land. Indisputably, they were essential is no showing that any specific third party would be
and principal elements of their chocolate-making industry. adversely affected.
Hence, although each of them was movable or personal
property on its own, all of them have become immobilized
by destination because they are essential and principal
elements in the industry. In that sense, petitioners are
correct in arguing that the said machines are real, not
personal, property pursuant to Article 415 (5) of the Civil BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR
Code. and CITY TREASURER OF QUEZON CITY
vs. M
​ ANILA ELECTRIC COMPANY
Be that as it may, we disagree with the submission of the
petitioners that the said machines are not proper subjects of FACTS: The Philippine Commission enacted Act No. 484
the Writ of Seizure. chanrobles virtual law library which authorized the Municipal Board of Manila to grant a
franchise to construct, maintain and operate an electric
The Court has held that contracting parties may street railway and electric light, heat and power system in
validly stipulate that a real property be considered as the City of Manila and its suburbs to the person or persons
personal.​18​ After agreeing to such stipulation, they making the most favorable bid. Charles M. Swift was
are consequently estopped from claiming otherwise. awarded the said franchise the terms and conditions of
Under the principle of estoppel, a party to a contract is which were embodied in Ordinance No. 44. Respondent
ordinarily precluded from denying the truth of any material Manila Electric Co. (Meralco for short), became the
fact found therein. transferee and owner of the franchise.

In the present case, the Lease Agreement clearly provides Meralco's electric power is generated by its hydro-electric
that the machines in question are to be considered as plant located at Botocan Falls, Laguna and is transmitted to
personal property. the City of Manila by means of electric transmission wires,
running from the province of Laguna to the said City. The
Clearly then, petitioners are estopped from denying the respondent Meralco has constructed 40 of these steel
characterization of the subject machines as personal towers within Quezon City, on land belonging to it

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

City Assessor of Quezon City declared the aforesaid steel directly to meet the needs of the said industry or
towers for real property tax. After denying respondent's works;
petition to cancel these declarations, an appeal was taken
by respondent to the Board of Assessment Appeals of The steel towers or supports in question, do not come
Quezon City, which required respondent to pay the amount within the objects mentioned in paragraph 1, because
of P11,651.86 as real property tax on the said steel towers they do not constitute buildings or constructions
for the years 1952 to 1956. Respondent paid the amount adhered to the soil. ​They are not construction analogous
under protest, and filed a petition for review in the Court of to buildings nor adhering to the soil. As per description,
Tax Appeals (CTA for short) which rendered a decision given by the lower court, ​they are removable and merely
ordering the cancellation of the said tax declarations and attached to a square metal frame by means of bolts, which
the petitioner City Treasurer of Quezon City to refund to the when unscrewed could easily be dismantled and moved
respondent the sum of P11,651.86. from place to place. ​They can not be included under
paragraph 3, as they are not attached to an
ISSUE: WoN the steel supports or towers constitute real immovable in a fixed manner, and they can be
property, so that they can be subject to a real property tax. separated without breaking the material or causing
deterioration upon the object to which they are
HELD: attached. ​Each of these steel towers or supports consists of
steel bars or metal strips, joined together by means of
The tax law does not provide for a definition of real bolts, which can be disassembled by unscrewing the bolts
property; but Article 415 of the Civil Code does, by stating and reassembled by screwing the same. ​These steel
the following are immovable property: towers or supports do not also fall under paragraph 5,
for they are not machineries, receptacles, instruments
(1) Land, buildings, roads, and constructions of all
or implements, and even if they were, they are not
kinds ​adhered​ to the soil;
intended for industry or works on the land. Petitioner is
xxx xxx xxx not engaged in an industry or works in the land in which the
steel supports or towers are constructed.
(3) Everything attached to an immovable in a ​fixed
manner​, in such a way that it cannot be separated MANILA ELECTRIC COMPANY v. ​THE CITY ASSESSOR
therefrom without breaking the material or AND CITY TREASURER OF LUCENA CITY
deterioration of the object;
FACTS:
xxx xxx xxx

(5) Machinery, receptacles, instruments or MERALCO is a private corporation organized and existing
implements intended by the owner of the tenement under Philippine laws to operate as a public utility engaged
for an industry or works which may be carried in a in electric distribution. MERALCO has been successively
building or on a piece of land, and which tends granted franchises to operate in Lucena City beginning 1922
until present time.

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

MERALCO received from the City Assessor of Lucena a copy under Ordinance No. 44 dated March 24, 1903 of the
of Tax Declaration covering the following electric facilities, Municipal Board of Manila, which it acquired from the
classified as capital investment, of the company: (a) original grantee, Charles M. Swift. Under its franchise,
transformer and electric post; (b) transmission line; (c) MERALCO was expressly granted the following tax
insulator; and (d) electric meter, located in Quezon Ave. exemption privilege:
Ext., Brgy. Gulang-Gulang, Lucena City. Under the Tax
Declaration these electric facilities were subjected to real Par 9. The grantee shall be liable to pay the same taxes
property tax as of 1985. upon its real estate, buildings, plant (not including poles,
wires, transformers, and insulators), machinery and
personal property as other persons are or may be hereafter
ISSUE: WoN the subject electrical facilities are still required by law to pay. x x x Said percentage shall be due
considered as personal property and payable at the times stated in paragraph nineteen of
Part One hereof, x x x​ and shall be in lieu of all taxes and
HELD: The Court finds that the transformers, electric posts, assessments of whatsoever nature, and by whatsoever
transmission lines, insulators, and electric meters of authority upon the privileges, earnings, income, franchise,
MERALCO are no longer exempted from real property tax and poles, wires, transformers, and insulators of the
and may qualify as "machinery" subject to real property tax grantee from which taxes and assessments the grantee is
under the Local Government Code. Nevertheless, the Court hereby expressly exempted, ​x x x.​41
declares null and void the appraisal and assessment of said
properties of MERALCO by the City Assessor in 1997 for
failure to comply with the requirements of the Local Given the express exemption from taxes and assessments
Government Code and, thus, violating the right of MERALCO of the "​poles,​ wires, transformers, and insulators" of
to due process. MERALCO in the aforequoted paragraph, the sole issue in
the ​1964 MERALCO case ​was whether or not the steel
The decisions in CBAA Case No. 248 and the ​1964 MERALCO towers of MERALCO qualified as "poles" which were
case​ recognizing the exemption from real property tax of exempted from real property tax. The Court ruled in the
the transformers, electric posts, transmission lines, affirmative. However, the aforequoted conclusions of the
insulators, and electric meters of MERALCO are no longer Court in the ​1964 MERALCO c​ ase do not hold true anymore
applicable because of subsequent developments that under the Local Government Code.
changed the factual and legal milieu for MERALCO in the
present case. While the Local Government Code still does not provide for
a specific definition of "real property," Sections 199(o) and
In the ​1964 MERALCO case,​ the City Assessor of Quezon 232 of the said Code, respectively, gives an extensive
City considered the steel towers of MERALCO as real definition of what constitutes "machinery" and unequivocally
property and required MERALCO to pay real property taxes subjects such machinery to real property tax. The Court
for the said steel towers for the years 1952 to 1956. reiterates that the machinery subject to real property tax
MERALCO was operating pursuant to the franchise granted under the Local Government Code "may or may not be

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

attached, permanently or temporarily to the real property;" Code are immovables by destination, or "those which are
and the physical facilities for production, installations, and essentially movables, but by the purpose for which they
appurtenant service facilities, those which are mobile, have been placed in an immovable, partake of the nature of
self-powered or self-propelled, or are not permanently the latter because of the added utility derived
attached must (a) be actually, directly, and exclusively used therefrom."​58​ These properties, including machinery,
to meet the needs of the particular industry, business, or become immobilized if the following requisites concur: (a)
activity; and (2) by their very nature and purpose, be they are placed in the tenement by the owner of such
designed for, or necessary for manufacturing, mining, tenement; (b) they are destined for use in the industry or
logging, commercial, industrial, or agricultural purposes. work in the tenement; and (c) they tend to directly meet
the needs of said industry or works.​59​ The first two
Article 415, paragraph (1) of the Civil Code declares as requisites are not found anywhere in the Local Government
immovables or real properties "[l]and, buildings, roads and Code.
constructions of all kinds adhered to the soil." The land,
buildings, and roads are immovables by nature "which MERALCO insists on harmonizing the aforementioned
cannot be moved from place to place," whereas the provisions of the Civil Code and the Local Government
constructions adhered to the soil are immovables by Code. The Court disagrees, however, for this would
incorporation "which are essentially movables, but are necessarily mean imposing additional requirements for
attached to an immovable in such manner as to be an classifying machinery as real property for real property tax
integral part thereof."​57​ Article 415, paragraph (3) of the purposes not provided for, or even in direct conflict with,
Civil Code, referring to "[ejverything attached to an the provisions of the Local Government Code.
immovable in a fixed manner, in such a way that it cannot
be separated therefrom without breaking the material or As between the Civil Code, a general law governing property
deterioration of the object," are likewise immovables by and property relations, and the Local Government Code, a
incorporation. In contrast, the Local Government Code special law granting local government units the power to
considers as real property machinery which "may or may impose real property tax, then the latter shall prevail. As
not be attached, permanently or temporarily to the real the Court pronounced in ​Disomangcop v. The Secretary of
property," and even those which are "mobile." the Department of Public Works and Highways Simeon A.
Datumanong60​
​ :cralawlawlibrary
Article 415, paragraph (5) of the Civil Code considers as
immovables or real properties "[machinery, receptacles, It is a finely-imbedded principle in statutory construction
instruments or implements intended by the owner of the that a special provision or law prevails over a general
tenement for an industry or works which may be carried on one. ​Lex specialis derogant generali.​ As this Court
in a building or on a piece of land, and which tend directly expressed in the case of ​Leveriza v. Intermediate Appellate
to meet the needs of the said industry or works." The Civil Court, ​"another basic principle of statutory construction
Code, however, does not define "machinery." mandates that general legislation must give way to special
legislation on the same subject, and generally be so
The properties under Article 415, paragraph (5) of the Civil interpreted as to embrace only cases in which the special

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

provisions are not applicable, that specific statute prevails

over a general statute and that where two statutes are of Therefore, for determining whether machinery is real
equal theoretical application to a particular case, the one property subject to real property tax, the definition
designed therefor specially should prevail." (Citations and requirements under the Local Government Code
omitted.)chanrobleslaw are controlling.

The Court also very clearly explicated in ​Vinzons-Chato v.

Fortune Tobacco Corporation61​
​ that:cralawlawlibrary

A general law and a special law on the same subject are

statutes in ​pah materia​ and should, accordingly, be read PROVINCIAL ASSESSOR OF AGUSAN DEL SUR
together and harmonized, if possible, with a view to giving v. ​FILIPINAS PALM OIL PLANTATION, INC.
effect to both. The rule is that where there are two acts,
one of which is special and particular and the other general The exemption from real property taxes given to
which, if standing alone, would include the same matter and cooperatives applies regardless of whether or not the land
thus conflict with the special act, the special law must owned is leased. This exemption benefits the cooperative's
prevail since it evinces the legislative intent more clearly lessee. The characterization of machinery as real property is
than that of a general statute and must not be taken as governed by the Local Government Code and not the Civil
intended to affect the more particular and specific Code.
provisions of the earlier act, unless it is absolutely
necessary so to construe it in order to give its words any
FACTS:
meaning at all.

The circumstance that the special law is passed before or Filipinas Palm Oil Plantation Inc. (Filipinas) is a private
after the general act does not change the principle. Where organization engaged in palm oil plantation​5​ with a total
the special law is later, it will be regarded as an exception land area of more than 7,000 hectares of National
Development Company (NDC) lands in Agusan del
to, or a qualification of, the prior general act; and where the
Sur.​6​ Harvested fruits from oil palm trees are converted into
general act is later, the special statute will be construed as
remaining an exception to its terms, unless repealed oil through Filipinas' milling plant in the middle of the
expressly or by necessary implication. (Citations plantation area.​7​ Within the plantation, there are also three
omitted.)chanrobleslaw (3) plantation roads and a number of residential homes
constructed by Filipinas for its employees.
Furthermore, in ​Caltex (Philippines), Inc. v. Central Board of
Assessment Appeals,​62​ the Court acknowledged that "[i]t is After the Comprehensive Agrarian Reform Law​9​ was passed,
a familiar phenomenon to see things classed as real NDC lands were transferred to Comprehensive Agrarian
property for purposes of taxation which on general principle Reform Law beneficiaries who formed themselves as the
might be considered personal property[.]" merged NDC-Guthrie Plantations, Inc. - NDC-Guthrie

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

Estates, Inc. (NGPI-NGEI) Cooperatives.​10​ Filipinas entered Yes. The road equipment and mini haulers shall be
into a lease contract agreement with NGPI-NGEI. considered as real property, subject to real property tax.

The Provincial-Assessor of Agusan del Sur (Provincial Section 199(o) of the Local Government Code defines
Assessor) is a government agency in charge with the "machinery" as real property subject to real property
assessment of lands under the public domain.​12​ It assessed tax,​85​ thus:
Filipinas' properties found within the plantation area.
SECTION 199. ​Definition of Terms​. — When used in this
Petitioner, aggrieved by the decision of Court of Appeals Title, the term:
affirming the Decision of Central Board of Assessment
Appeals (CBAA) exempting respondent from payment of (o) "Machinery" embraces machines, equipment,
real property taxes. mechanical contrivances, instruments, appliances or
apparatus which may or may not be attached, permanently
Petitioner contends that the second sentence of Section or temporarily, to the real property. It includes the physical
199(o) includes the road equipment and mini haulers since facilities for production, the installations and appurtenant
these are directly and exclusively used by respondent to service facilities, those which are mobile, self-powered or
meet the needs of its operations.​86​ It further claims that self-propelled, and those not permanently attached to the
Article 415(5) of the New Civil Code should not control the real property which are actually, directly, and exclusively
Local Government Code, a subsequent legislation. used to meet the needs of the particular industry, business
or activity and which by their very nature and purpose are
On the other hand, respondent claims that the road designed for, or necessary to its manufacturing, mining,
equipment and mini haulers are movables by nature. It logging, commercial, industrial or agricultural purposes[.]
asserts that although there may be a difference between
the meaning of "machinery" under the Local Government Article 415(5) of the New Civil Code defines "machinery" as
Code arid that of immovable property under Article 415(5) that which constitutes an immovable property:
of the Civil Code, "the controlling interpretation of Section
199(o) of [the Local Government Code] is the interpretation Article 415. The following are ​immovable property:
of Article 415(5) of the Civil Code." ....
(5) Machinery, receptacles, instruments or implements
intended by the owner of the tenement for an industry or
ISSUE: Whether respondent's road equipment and mini
works which may be carried on in a building or on a piece of
haulers are movable properties and have not been
land, and which tend directly to meet the needs of the said
immobilized by destination for real property taxation
industry or works[.] (​Emphasis supplied​)
The Civil Code, however, does not define "machinery."
HELD:
The properties under Article 415, paragraph (5) of the Civil
Code are immovables by destination, or "those which are

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

essentially movables, but by the purpose for which they self-propelled, and those not permanently attached to the
have been placed in an immovable, partake of the nature of real property ​which are actually, directly, and
the latter because of the added utility derived therefrom." exclusively used to meet the needs of the particular
These properties, including​ machinery, become immobilized industry, business or activity ​and which by their very
if the following requisites concur: (a) they are placed in the nature and purpose are designed for, or necessary to its
tenement by the owner of such tenement; (b) they are manufacturing, mining, logging, commercial, industrial or
destined for use in the industry or work in the tenement; agricultural purposes [.] (​Emphasis supplied​)
and (c) they tend to directly meet the needs of said industry
or works.​ The first two requisites are not found anywhere in Petitioner is correct in claiming that the phrase pertaining to
the Local Government Code.​92​ (​Emphasis supplied​, citations physical facilities for production is comprehensive enough to
omitted) include the road equipment and mini haulers as actually,
directly, and exclusively used by respondent to meet the
Section 199(o) of the Local Government prevails over Article needs of its operations in palm oil production.​96​ Moreover,
415(5) of the Civil Code. "mini-haulers are farm tractors pulling attached trailers
used in the hauling of seedlings during planting season and
Therefore, for determining whether machinery is real in transferring fresh palm fruits from the farm [or] field to
property subject to real property tax, the definition and the processing plant within the plantation area."​97​ The
requirements under the Local Government Code are indispensability of the road equipment and mini haulers in
controlling​.93
​ transportation makes it actually, directly, and exclusively
used in the operation of respondent's business.
Respondent is engaged in palm oil plantation.​94​ Thus, it
harvests fruits from palm trees for oil conversion through its FELS ENERGY, INC., vs.THE PROVINCE OF BATANGAS
milling plant.​95​ By the nature of respondent's business, and
transportation is indispensable for its operations.
THE OFFICE OF THE PROVINCIAL ASSESSOR OF
Under the definition provided in Section 199(o) of the Local BATANGAS
Government Code, the road equipment and the mini haulers
are classified as machinery, thus: FACTS:

National Power Corporation (NPC) entered into a lease

chanRoblesvirtualLawlibrary
contract with Polar Energy, Inc. over 3x30 MW diesel engine
SECTION 199.​ Definition of Terms​. — When used in this
power barges moored at Balayan Bay in Calaca, Batangas.
Title, the terra:
Subsequently, Polar Energy, Inc. assigned its rights under
....
the Agreement to FELS. The NPC initially opposed the
assignment of rights.
(o) "Machinery" . . . includes the​ physical facilities for
production​, the installations and appurtenant service FELS received an assessment of real property taxes on the
facilities, ​those which are mobile​, self-powered or power barges from the Provincial Assessor. FELS referred

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

the matter to NPC, reminding it of its obligation under the

Agreement to pay all real estate taxes.

ISSUE: ​Whether power barges, which are floating and

movable, are personal properties and therefore, not subject
to real property tax.

HELD:

YES. As found by the appellate court, the CBAA and LBAA

power barges are real property and are thus subject to real
property tax.

In Consolidated Edison Company of New York, Inc., et al. v.

The City of New York, et al.,​50​ a power company brought an
action to review property tax assessment. On the city’s
motion to dismiss, the Supreme Court of New York held that
the barges on which were mounted gas turbine power
plants designated to generate electrical power, the fuel oil
barges which supplied fuel oil to the power plant barges,
and the accessory equipment mounted on the barges were
subject to real property taxation.

Moreover, Article 415 (9) of the New Civil Code provides

that "[d]ocks and structures which, though floating, are
intended by their nature and object to remain at a fixed
place on a river, lake, or coast" are considered immovable
property. Thus, power barges are categorized as
immovable property by destination, being in the
nature of machinery and other implements intended
by the owner for an industry or work which may be
carried on in a building or on a piece of land and
which tend directly to meet the needs of said industry
or work.

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

RICARDO PRESBITERO vs.THE HON. JOSE F. ISSUE: ​Whether Squarely sugar quotas are real
FERNANDEZ, HELEN CARAM NAVA, and the (immovable) or personal properties.
PROVINCIAL SHERIFF OF NEGROS OCCIDENTAL,
RULING:
Sugar Quotas are real property, for they are by law
considered “real rights over immovable property” just like Thus, under express provisions of law, the sugar quota
servitudes and easements. (See Art. 415, No. 10). EO 873 allocations are accessories to land, and can not have
regards them as “improvements” attached, though not independent existence away from a plantation, although the
physically, to the land. latter may vary.

FACTS: As an improvement attached to land, by express provision

of law, though not physically so united, the sugar quotas
It appears that during the lifetime of Esperidion Presbitero, are inseparable therefrom, just like servitudes and other
judgment was rendered against him. Pursuant thereto, real rights over an immovable. Article 415 of the Civil Code,
plaintiff's counsel sought in vain to amicably settle the case in enumerating what are immovable properties, names —
through petitioner's son, Ricardo Presbitero. ​Thereupon,
on June 21, 1960, the sheriff levied upon and 10. Contracts for public works, and servitudes and other
garnished the sugar quotas allotted to plantation real rights over immovable property. (Emphasis supplied)
adhered to the Ma-ao Mill District and "registered in
the name of Esperidion Presbitero as the original It is by law, therefore, that these properties are immovable
plantation-owner", furnishing copies of the writ of or real, Article 416 of the Civil Code being made to apply
execution and the notice of garnishment to the only when the thing (res) sought to be classified is not
manager of the Ma-ao Sugar Central Company, Bago, included in Article 415.
Negros Occidental, and the Sugar Quota
The fact that the Philippine Trade Act of 1946 (U.S. Public
Administration at Bacolod City, but without
Law 371-79th Congress) allows transfers of sugar quotas
presenting for registration copies thereof to the
does not militate against their immovability. Neither does
Register of Deeds.
the fact that the Sugar Quota Office does not require
Ricardo Presbitero, filed an urgent motion, in Case registration of sales of quotas with the Register of Deeds for
No. 3492, to set aside the writs of execution, and to their validity, nor the fact that allocation of unrefined sugar
order the sheriff to desist from holding the auction quotas is not made among lands planted to sugarcane but
sale on the grounds that the levy on the sugar quotas among "the sugar producing mills and plantation OWNERS",
was invalid because the notice thereof was not since the lease or sale of quotas are voluntary transactions,
registered with the Register of Deeds, as for real the regime of which, is not necessarily identical to
property, and that the writs, being for sums of involuntary transfers or levies; and there cannot be a sugar
money, are unenforceable since Esperidion Presbitero plantation owner without land to which the quota is
died on October 22, 1960, and, therefore, could only attached; and there can exist no quota without there being
be enforced as a money claim against his estate. first a corresponding plantation.

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

SIBAL VS. VALDEZ Maneclang, et al. v. IAC GR 66575

FACTS: In a case brought by plaintiff against defendant, A creek is a recess or arm extending from a river and
the latter won. For the purpose of satisfying the judgment participating in the ebb and flow of the sea. It is a
won by the defendant, the sheriff attached the sugar cane property belonging to the public domain. ​It is not
that was then growing on the lots of the plaintiff. Said lots susceptible to private appropriation and acquisitive
incidentally had already been previously attached by prescription​. As a public water, it cannot be registered
another judgment creditor of the plaintiff. Within the under the Torrens System in the name of any individual.
one-year period given by law for redemption, the plaintiff Neither the mere construction of irrigation dikes by the
wanted to redeem the lots from one creditor, and the sugar National Irrigation Administration which prevents the water
cane from the other creditor. The lots were redeemed, the from flowing in and out of a fishpond, nor its conversion into
redemption of the sugar cane was however refused by the a fishpond, alter or change the nature of the creek as a
defendant, who contended that the sugar cane was personal property of the public domain. ​Hence, a compromise
property, and therefore could not be the subject of the legal agreement adjudicating the ownership of such
redemption sought to be enforced. The plaintiff upon the property in favor of an individual is null and void. It
other hand claimed that the sugar cane was real property has no legal effect. It is contrary to law and public policy.
for the same could be considered as “growing fruits” under
par. 2 of Art. 415. Santos v. Moreno

ISSUE: FACTS: Ayala y Cia owned a big tract of land in Macabebe,

Pampanga, the Hacienda San Esteban. To provide access to
How should the sugar cane be regarded — as real property different parts of the property, the Company dug
or as personal property? interlinking canals, which through erosion, gradually
acquired the characteristics of rivers. The company sold part
HELD: of the Hacienda to Santos, who closed some of the canals
and converted them into fishponds. The residents of the
The sugar cane, although considered as “growing fruits'' and surrounding barrios (now barangays) complained that the
therefore ordinarily real property under Par. 2 of Art. 415 of closure deprived them of their means of transportation, as
the Civil Code, must be regarded as PERSONAL PROPERTY well as of their fishing grounds.
for purposes of the Chattel Mortgage Law, and also for
purposes of attachment, because as ruled by the Louisiana Issue:​ May the canals be ordered open?
Supreme Court, the right to the growing crops mobilizes
(makes personal, as contradistinguished from HELD: No, because said canals are of private ownership.
immobilization) the crops by ANTICIPATION. More “The said streams, considered as canals of which they
specifically, it said that the existence of a right on the originally were, are of private ownership. Under Art. 420,
growing crop is a mobilization by anticipation, a gathering canals constructed by the State and devoted to use are of
as it were, in advance, rendering the crop movable. (See public ownership. Conversely, canals constructed by private
Lumber Co. v. Sheriff, 106 La. 418).

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.
CASE DIGESTS IN PROPERTY DIZON, MAY ANN B.

persons within private lands and devoted exclusively for Manila International Airport Authority (MIAA) v. CA
private use must be of private ownership.’’ FACTS: The term “ports” under Art. 420(1) of the Civil Code
includes seaports and airports.
Mun. of Cavite v. Rojas
HELD: The MIAA Airport Lands and Buildings constitute a
FACTS: “port,” constructed by the State.
The Municipal Council of Cavite in 1907 withdrew and
excluded from public use a part of its plaza in order to lease
the same for the benefit of defendant Rojas.

Issue​: Is the lease valid?

HELD: The lease is null and void, ​because streets and

plazas are outside the commerce of man, since they
are properties for public use. ​In creating the lease, the
municipality exceeded its authority because it did something
it was not empowered to do. The lessee must therefore
vacate the premises. In turn, the municipality must
reimburse the rentals which had already been paid to it. (In
this case, the lessee had not received any benefit, from the
lease. If there had been such benefit there might have
been no reimbursement of rent, as held in Sanchez v. Mun.
of Asingan, L-17635, Mar. 30, 1963).

[NOTE: While in case of war or during an emergency, town

plazas may be temporarily occupied by private individuals,
still, when the emergency ceases, the temporary occupation
or use must also cease. Indeed, a town plaza cannot be
used for the construction of market stalls or of residences.
Such structures constitute a nuisance subject to abatement
according to law. (Espiritu, et al. v. Mun. Council of
Pozorrubio, Pangasinan, L-11014, Jan. 21, 1958). Neither
may a town plaza be donated to the Roman Catholic
Church. (Harty v. Mun. of Victoria, 13 Phil. 152).].

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only.