lopez vs.docx

7/28/2019 Lopez vs.docx

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Lopez vs. Orosa

Lopez vs. Orosa, Jr. and Plaza Theatre, Inc.

G.R. Nos. L-10817-18. February 28, 1958.

Felix, J.

Doctrine: In the absence of any specific provision of law to the contrary, a building is an immovable

property, irrespective of whether or not said structure and the land on which it is adhered to belong to

the same owner.

Facts: Sometime in May, 1946, Vicente Orosa, Jr., invited Lopez to make an investment in the theatre

business. Although Lopez expressed his unwillingness to invest of the same, he agreed to supply the

lumber necessary for the construction of the proposed theatre, and at Orosas request and assurance

that the latter would be personally liable for any account that the said construction might incur, Lopez

further agreed that payment therefore would be on demand and not cash on delivery basis. With this,

Lopez delivered the lumber which was used for the construction of the Plaza Theatre on May 17, 1946,

up to December 4 of the same year. The total cost of materials amounted to P62,255.85 but Lopez was

only paid P20,848.50, thus leaving a balance of P41,771.35. Orosa and Rustia, corporation president,

promised Lopez to obtain a bank loan to satisfy the balance, to which assurance Lopez had to accede.

Unknown to Lopez, Orosa and Rustia already secured a loan for P30,000 from the PNB with the Luzon

Surety Company as surety, and the corporation in turn executed a mortgage on the land and building in

favor of said company as counter-security. As the land at that time was not yet brought under the

operation of the Torrens System, the mortgage on the same was registered on 16 November 1946,

under Act 3344. Subsequently, when the corporation applied for the registration of the land under Act

496, such mortgage was not revealed and thus OCT O-391 was correspondingly issued on October 25,

1947, without any encumbrance appearing thereon.

Persistent demand from Lopez caused Vicente Orosa, Jr. to execute, on 17 March 1947, an alleged

deed of assignment of his 420 shares of stock of the Plaza Theater, Inc., at P100 per share or with atotal value of P42,000 in favor of the creditor, and as the obligation still remained unsettled, Lopez filed

on 12 November 1947, a complaint with the CFI Batangas against Vicente Orosa Jr. and Plaza Theatre,

Inc., praying that defendants be sentenced to pay him jointly and severally the sum of P41,771.35 with

legal interest from the filing of the action; that in case defendants fail to pay the same, that the building

and the land owned by the corporation be sold at public auction and the proceeds thereof be applied to


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said indebtedness. Plaintiff also caused the annotation of a notice of lis pendens on said properties with

the Register of Deeds.

The surety company upon discovery that the land was already registered under the Torrens System and

that there was a notice of lis pendens thereon, filed a petition for review of the decree of the land

registration court in order to annotate the lights and interests of the surety company over said

properties. Lopez opposed by asserting that the amount demanded by him constituted a preferred lien

over the properties of the obligors; that the surety company was guilty of negligence when it failed to

present an opposition to the application for registration of the property; and that if any annotation of

the rights and interest of said surety would ever be made, same must be subject to the lien in his favor.

The court ruled that Orosa and the Plaza Theatre, Inc., were jointly liable for the unpaid balance of the

cost of lumber used in the construction of the building and the plaintiff thus acquired the materialmans

lien over the same; the lien being merely confined to the building and did not extend to the land on

which the construction was made.

Issue: Whether materialmans lien for the value of the materials used in the construction of a building

attaches to the building alone and does not extend to the land on which the building is adhered to.

Held: No. While it is true that generally, real estate connotes the land and the building constructed

thereon, it is obvious that the inclusion of the building, separate and distinct from the land, in the

enumeration of what may constitute real properties could mean only one thing that a building is by

itself an immovable property ( Leung Yee v. Strong Machinery). In the absence of any specific provision

of law to the contrary, a building is an immovable property, irrespective of whether or not said structure

and the land on which it is adhered to belong to the same owner.

ASSOCIATED INSURANCE AND SURETY COMPANY V. IYA, ET. AL

103 SCRA 972

G.R. Nos. L-10837-38 May 30, 1958

FACTS:

Spouses Valino were the owners of a house, payable on installments from Philippine Realty Corporation.To be able to purchase on credit rice from NARIC, they filed a surety bond subscribed by petitioner and

therefor, they executed an alleged chattel mortgage on the house in favor of the surety company. Thespouses didnt own yet the land on which the house was constructed on at the time of the undertaking.

After being able to purchase the land, to be able to secure payment for indebtedness, the spouses executed


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a real estate mortgage in favor of Iya.

The spouses were not able to satisfy obligation with NARIC, petitioner was compelled to pay. Thespouses werent able to pay the surety company despite demands and thus, the company foreclosed thechattel mortgage. It later learned of the real estate mortgage over the house and lot secured by thespouses. This prompted the company to file an action against the spouses. Also, Iya filed another civil

action against the spouses, asserting that she has a better right over the property. The trial court heard thetwo cases jointly and it held that the surety company had a preferred right over the building as since whenthe chattel mortgage was secured, the land wasnt owned yet by the spouses making the building then achattel and not a real property.

ISSUE:

WON the auction sale was null and void

WON the house can be considered as personal property.

HELD:

A building certainly cannot be divested of its character of a realty by the fact that the land on which it isconstructed belongs to another. To hold it the other way, the possibility is not remote that it would resultin confusion, for to cloak the building with an uncertain status made dependent on ownership of the land,

would create a situation where apermanent fixture changes its nature or character as the ownership of theland changes hands. In the case at bar, as personal properties may be the only subjects of a chattelmortgage, the execution of the chattel mortgage covering said building is null and void.

lopez vs.docx

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