Texon vs.
Millena
G.R. No. 141380 | April 14, 2004
Facts:
Grace Millena and Marilen Millena, both employees of Texon Manufacturing, were terminated
by the company. Grace was dismissed in the summer of 1995 and subsequently filed a
complaint with the Labor Arbiter for underpayment and non-payment of wages, overtime, and
holiday pay. Similarly, on September 8, 1995, Marilen was terminated after being made to
sign a blank document, which she mistakenly thought was a receipt for ₱1,500 given by Betty
Chua. However, it turned out to be a resignation letter and quitclaim for her back salaries. She
then filed a complaint for illegal dismissal, seeking full back wages and benefits.
Petitioners filed a motion to dismiss both complaints on the ground of prescription.
Labor Arbiter denied the motion to dismiss.
Petitioners appealed to NLRC
NLRC dismissed the appeal and affirmed the Arbiter’s order.
Petitioners filed a motion for reconsideration but was denied by the NLRC.
petitioners filed a petition for certiorari with the Court of Appeals
The CA affirmed the NLRC Order and held that "Admittedly, the three year prescriptive period
under Article 291 of the Labor Code, is supposedly counted from the time the cause of action
accrued. "We rule, the three-year period did not yet prescribe, considering that Grace filed her
complaint on August 21, 1995, while Marilyn filed her complaint in September 1995.
Issue/s:
Whether or not the illegal detention constitute an injury to the property rights of an individual.
Decision:
Yes.
Article 1146 of the New Civil Code provides:
"Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict."
Upon the ruling of the court in Callanta vs. Carnation Philippines, Inc., it was stated that
"One’s employment or profession is a ‘property right’ and the wrongful interference therewith
is an actionable wrong. The right is considered to be property within the protection of the
constitutional guarantee of due process of law.
Principle:
“When one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one’s dismissal from employment constitutes, in essence,
an action predicated ‘upon an injury to the rights of the plaintiff,’ as contemplated under Article
1146 of the New Civil Code, which must be brought within 4 years."
Luna v. Encarnacion
91 Phil 531
Facts:
Jose Luna executed a deed designated as chattel mortgage in favor of Trinidad Reyes. The
mortgage secured a promissory note. The mortgaged property was a house of mixed
materials located in Pasig. Luna failed to pay the promissory note upon its due date. At the
request of Reyes, the Provincial Sheriff of Rizal sold the property at public auction. Reyes
purchased the property for the amount covering the indebtedness, interest, and costs. After
the redemption period expired without Luna repurchasing the property, Reyes demanded
possession of the house. Luna refused to vacate. Reyes filed a petition in the Court of First
Instance, invoking Act No. 3135 (as amended by Act No. 4118), seeking authorization for the
sheriff to place her in possession of the property.
Luna opposed the petition, arguing that:
The mortgage in question was a chattel mortgage and Act No. 3135 applies only to
real estate mortgages
Even if considered a real estate mortgage, the extra-judicial sale was invalid due to
the absence of an express stipulation authorizing such a sale.
The respondent judge overruled Luna’s opposition and granted Reyes’ petition, ordering the
sheriff to place her in possession of the property.
Issue/s:
May the House of mixed materials be the subject of a chattel mortgage and treated as
personal property
Decision:
Yes.
The subject of the contract designated as Chattel Mortgage was a house of mixed materials,
and this Court held therein that it was a valid Chattel mortgage because it was so expressly
designated and specifically that the property given as security ‘‘is a house of mixed materials,
which by its very nature is considered personal property.”
Wherefore, the order subject of the present petition for certiorari is hereby set aside, with
costs against respondent Trinidad Reyes.
Principle:
Real Property treated by the parties as personal property.
Manarang v. Ofilada
99 Phil 108
Facts:
Lucia Manarang obtained a loan from Ernesto Esteban and secured it with a chattel mortgage
on a house built on a lot in Manila. When Manarang failed to repay the loan, Esteban filed a
case in the municipal court of Manila, which ruled in his favor and issued an execution order
against the property.
Before the property could be sold, Manarang offered to pay P277 which included the
judgment amount, interest, costs, and sheriff’s fees, but the sheriff refused the payment
unless an additional P260 was provided for the publication of the sale notice in two
newspapers. Manarang then filed a suit to compel the sheriff to accept her P277 offer and
annul the sale notice.
Manarang’s counsel argued that the house should be considered personal property, making
the publication of the sale notice unnecessary. However, the Court of First Instance ruled
against Manarang, affirming that the sheriff was required to publish the sale notice to ensure
the sale's validity.
Issue/s:
Does the fact that the parties entering into a contract regarding a house gave said property
the consideration of personal property in their contract, bind the sheriff in advertising the
property’s sale at public auction as personal property?
Decision:
No. The court stated that while a house of mixed materials may be the subject of a chattel
mortgage and considered personal property between the parties, this classification does not
bind third parties or public officials in the execution process.
The rules governing execution sales are designed for public guidance and must be applied
uniformly. The nature of the property for execution purposes is determined by its general
classification, not by the private agreement of the parties. The house, being a permanent
fixture on the land, is considered real property under Rule 39, section 16 of the Rules of
Court.
Principle:
Chattel Mortgage not binding on third persons.
The mere fact that a house was the subject of a chattel mortgage and was considered as
personal property by the parties does not make said house personal property for purposes of
the notice to be given for its sale at public auction. It is real property within the purview of
Rule 39, section 16, of the Rules of Court as it has become a permanent fixture on the land,
which is real property.
Ladera v. Hodges
Vol. 48 No. 12 Official Gazette 5374
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.
Ladera built a house on the lot. Later on, she defaulted in the payment of the agreed monthly
installment. Hodges filed an action for the ejectment of Ladera.
The court issued an alias writ of execution and pursuant thereto, the city sheriff levied upon all
rights, interests, and participation over the house of Ladera. At the auction sale, Ladera’s
house was sold.
Ladera filed an action against Hodges and the judgment sale purchasers. Judgment was
rendered in favor of Ladera, setting aside the sale for non-compliance with Rule 39, Rules of
Court regarding judicial sales of real property. On appeal, Hodges contends that the house,
being built on a lot owned by another, should be regarded as movable or personal property.
Issue/s:
Is Ladera’s house an immovable property?
Decision:
YES.
The Civil Code numerates among the things declared by it as immovable property the
following: lands, buildings, roads and constructions of all kind adhered to the soil. The law
does not make any distinction whether or not the owner of the lot is the one who built.
Principle:
Article 415 par. 1, lands, buildings, roads and constructions of all kind adhered to the soil are
immovable property.
Mindanao Bus Co. v. City Assessor and Treasurer
G.R. No. L-17870 | September 20, 1962
Facts:
Petitioner Mindanao Bus Company questions the decision of the Court of Tax Appeals holding
that it is liable for the payment of realty tax on its maintenance and repair equipment.
Petitioner is a public utility solely engaged in transporting passengers and cargoes by motor
trucks. The machineries assessed for realty tax are used for the maintenance, repair, and
construction of the company’s motor trucks. They are not used for industrial production or
commercial repair services offered in the public. The City Assessor of Cagayan de Oro City
assessed the machineries as real property, imposing a realty tax of P4,400. The petitioner
appealed to the Board of Tax Appeals also sustained the assessment, prompting the
petitioner to bring the case to the Supreme Court.
Issue/s:
Were the machineries and equipments considered immovable property subject to property
tax.
Decision:
No. The Court emphasized that for machineries to be immobilized by destination, they must
be indispensable to the industry and the industry must be conducted in a fixed location. Since
these conditions are not met, the machineries cannot be classified as real property for tax
purposes.
The machineries in question are not essential or principal elements of the petitioner's
transportation business. They are merely incidental tools used for repair and maintenance.
The transportation business can function without these machineries, as evidenced by the
company's operations before acquiring them.
The Supreme Court held that the machineries are not real property under Article 415(5) of the
Civil Code and are therefore not subject to realty tax. The decision of the Court of Tax
Appeals was reversed, and the machineries were declared exempt from realty tax
assessment.
Principle:
Art. 415 provides that machinery, receptacles, instruments or implements intended by the
owner of the tenement for an industry or works which may be carried on in a building or on a
piece of land, and which tend directly to meet the needs of the said industry or works are
immovable properties.
Makati Leasing and Finance Corp. v. Weaverer Textile Mills, Inc.
G.R. No. L-58469 | May 16, 1983
Facts:
In order to obtain financial accommodations from petitioner Makati Leasing and Finance
Corporation, the private respondent Wearever Textile Mills, Inc., discounted and assigned
several receivables with the former under a Receivable Purchase Agreement. To secure the
collection of the receivables assigned, private respondent executed a Chattel Mortgage over
certain raw materials inventory as well as machinery described as an Artos Aero Dryer
Stentering Range.
Upon default, petitioner filed a petition for extrajudicial foreclosure of the properties mortgage
to it. Acting on petitioner’s application for replevin, the lower court issued a writ of seizure.
Then after, the sheriff enforcing the seizure order repaired to the premises of private
respondent and removed the main drive motor of the subject machinery.
The Court of Appeals, in certiorari and prohibition proceedings ordered the return of the
seized drive motor, after ruling that the machinery in suit cannot be the subject of replevin,
much less of a chattel mortgage, because it is a real property pursuant to Article 415 of the
New Civil Code, the same being attached to the ground by means of bolts and the only way
to remove it from respondent’s plant would be to drill out or destroy the concrete floor, the
reason why all that the sheriff could do to enforce the writ was to take the main drive motor of
said machinery.
Issue/s:
Is the subject machinery a real or a personal property?
Decision:
The machinery is personal property.
The parties to a contract may by agreement treat as personal property that which by nature
would be real property, as long as no interest of third parties would be prejudiced thereby.
Thus, if a house of strong materials (as held in a previous 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 prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and 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 denying the existence of the chattel
mortgage.
Equity dictates that one should not benefit at the expense of another. Private respondent
Wearever could not now therefore, be allowed to impugn the efficacy of the chattel mortgage
after it has benefited therefrom.
Principle:
Facts:
Sanchez and Cue Suan as a Sociedad ed comandita were the owners of a
steamship. To borrow from El Banco Espanol-Filipino, they executed a
chattel mortgage; the steamer, Hock-Tay, for the sum of the P 30,000.
However, the bank requested to sell the mortgaged the property due to
the mortgagor’s default to which the sheriff gave notice to the latter,
due notice was given of the of said mortgaged property.
But such sale was opposed by the Captain in accordance with Article 580
of the Code of Commerce, the money due to the captain and other
members of the crew for salaries is entitled to preference over the claim
of the bank; that the amounts owing by the ship for her equipment and
provisions are also entitled to preference; that the amounts owing by
the ship for her equipment and provisions are also entitled to
preference; that the wages due the captain and crew as shown by the
shipping articles and account books of the P1,601.73 is now owing to the
affiant for provisions, equipment and supplies furnished the vessel and
expended during her last voyage upon proper authority.
El banco Espanol-Filipino claimed that the said Sanchez et al., nor the
said Manuel Ayala had any right to participate in the proceeds of the
sale. The cause was submitted to the lower court and after due
consideration of the facts the court rendered a judgment in preference
to the claim of the mortgage the said sum of P756.66. That the sheriff of
Manial, out of the proceeds of the sale of said vessel as reported by him,
pay to the defendant Manuel Ayala the said sum of P756.66, and that
the balance of said proceedsa less the costs of this proceedings be paid
to the mortgagee, the Banco Espanol-Filipino.
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