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Court of Appeals

The document discusses whether certain machinery items are considered personal or movable property in a dispute over a mortgage. It holds that while the machinery appeared immobile since it was heavy and attached to real property, the contract between the parties clearly indicated their intent to treat the machinery as movable personal property. The contract was titled "Real Estate Mortgage and Chattel Mortgage" and included a separate list of machinery and equipment, showing the parties agreed to treat these items as chattels or personal property rather than immobile fixtures. Therefore, the machinery was considered personal property for purposes of the mortgage.

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58 views1 page

Court of Appeals

The document discusses whether certain machinery items are considered personal or movable property in a dispute over a mortgage. It holds that while the machinery appeared immobile since it was heavy and attached to real property, the contract between the parties clearly indicated their intent to treat the machinery as movable personal property. The contract was titled "Real Estate Mortgage and Chattel Mortgage" and included a separate list of machinery and equipment, showing the parties agreed to treat these items as chattels or personal property rather than immobile fixtures. Therefore, the machinery was considered personal property for purposes of the mortgage.

Uploaded by

Jansen Ouano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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RUBY L. TSAI, v.

COURT OF APPEALS
G.R. No. 120098
October 2, 2001

ISSUES:
Whether or not the machineries in dispute are personal or movable properties
HELD:
The nature of the disputed machineries, i.e., that they were heavy, bolted or cemented on the real property
mortgaged does not make them ipso facto immovable under Article 415 (3) and (5) of the New Civil Code. While it is true that
the properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed by the parties herein
reveal their intent, that is - to treat machinery and equipment as movables or personal property.
In the first mortgage contract, reflective of the true intention of PBCOM and EVERTEX was the typing in capital letters,
immediately following the printed caption of mortgage, of the phrase "real and chattel." So also, the "machineries and
equipment" in the printed form of the bank had to be inserted in the blank space of the printed contract and connected with
the word "building" by typewritten slash marks. Now, then, if the machineries in question were contemplated to be included in
the real estate mortgage, there would have been no necessity to ink a chattel mortgage specifically mentioning as part III of
Schedule A a listing of the machineries covered thereby. It would have sufficed to list them as immovables in the Deed of Real
Estate Mortgage of the land and building involved.
As regards the second contract, the intention of the parties is clear and beyond question. It refers solely to chattels.
The inventory list of the mortgaged properties is an itemization of 63 individually described machineries while the schedule
listed only machines and 2,996,880.50 worth of finished cotton fabrics and natural cotton fabrics.

____________________________________________________________________________________________________
Too, assuming arguendo that the properties in question are immovable by nature, nothing detracts the parties from
treating it as chattels to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, 9 SCRA 631
(1963), an immovable may be considered a personal property if there is a stipulation as when it is used as security in the
payment of an obligation where a chattel mortgage is executed over it, as in the case at bar.
In the instant case, the parties herein: (1) executed a contract styled as "Real Estate Mortgage and Chattel Mortgage,"
instead of just "Real Estate Mortgage" if indeed their intention is to treat all properties included therein as immovable, and (2)
attached to the said contract a separate "LIST OF MACHINERIES & EQUIPMENT". These facts, taken together, evince the
conclusion that the parties' intention is to treat these units of machinery as chattels. A fortiori, the contested after-acquired
properties, which are of the same description as the units enumerated under the title "LIST OF MACHINERIES & EQUIPMENT,"
must also be treated as chattels.

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