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Makati Leasing vs. Wearever Digest

1) Makati Leasing provided a loan to Wearever Textile Mills, secured by a chattel mortgage over certain raw materials and a machinery. Wearever defaulted and Makati began foreclosure proceedings. 2) On appeal, the CA ruled the machinery could not be subject to the chattel mortgage because it was real property permanently attached to the ground. However, the Supreme Court ruled that parties have autonomy to treat what is naturally real property as personal property, as long as no third parties are prejudiced. 3) The Supreme Court applied doctrines of estoppel and intention of parties, finding Wearever intended to treat the machinery as personal property and could not now contest the

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171 views

Makati Leasing vs. Wearever Digest

1) Makati Leasing provided a loan to Wearever Textile Mills, secured by a chattel mortgage over certain raw materials and a machinery. Wearever defaulted and Makati began foreclosure proceedings. 2) On appeal, the CA ruled the machinery could not be subject to the chattel mortgage because it was real property permanently attached to the ground. However, the Supreme Court ruled that parties have autonomy to treat what is naturally real property as personal property, as long as no third parties are prejudiced. 3) The Supreme Court applied doctrines of estoppel and intention of parties, finding Wearever intended to treat the machinery as personal property and could not now contest the

Uploaded by

Ella Tho
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MAKATI LEASING v.

WEAREVER

treat the same as such, so that they should not now

De Castro, J.

be allowed to make an inconsistent stand by claiming

Rizal

otherwise

1983

-unlike in Iya cases, Lopez v. Orosa, and Leung Yee


vs. FL Strong Machinery & Williamson, wherein 3rd

FACTS:

persons assailed validityof CM, it is defendants-

-Receivable Purchase Agreement between Wearever

appellants themselves as debtors-mortgagors who

Textile Mills and Makati Leasing and Finance

are attacking the validity of CM. Therefore doctrine

Corporation: Wearever discounted and assigned

of estoppel applies

receivable to Makati Leasing to obtain loan.

-If a house of strong materials like in the TUmalad

-security: CM over certain raw materials inventory as

case, may be considered PP for purposes of

well as a machinery (Artos Aero Dryer Stentering

executing CM as long as parties to contract so agree

Range)

and no innocent party is prejudiced, there is no

-Wearever defaulted. Makati Leasing filed petition for

reason why a machinery (movable by nature and

extrajudicial foreclosure. Deputy sheriff failed to gain

immobilized by destination or purpose) may not be

entry, leading Makati Leasing to file for JUDICIAL

likewise treate as such --- one who has so agreed is

foreclosure

ESTOPPED from denying existence of CM

-seizure order: main drive motor of subject

-CA ruled that TUmalad doctrine NA because land did

machinery was removed

not belong to owner. But law makes no distinction

-CA: set aside lower court order and ordered return

with respect to ownership of land where house is

of motor

built
- machinery cannot be subject of replevin,

much less CM bcause it is RP pursuant to A415 of

-Standard Oil Co. of NY v. Jaramillo


-parties to contract may treat as PP that

NCC attached to ground by means of bolts and the

which by nature would be RP as long as 3P interests

only way to remove from plant would be to drill out

are not prejudiced

or destroy the concrete floor (hence only main drive

-characterization of machinery as chattel by

motor was taken)

Wearever is indivative of intention and impresses


upon it th character determined by the parties

ISSUE: Whether machine is RP or PP. PERSONAL

-Wearever could not now be allowed to impugn the


efficacy of the CM after it has benefited from the

HELD:

contract. (status of machinery was never placed in

TUmalad v. Vicencio

nissue except in a supplemental memo before CA

-by ceding, selling or transferring property by way of

even if true, would only render contract voidable, not

CM, defendants-appellants could only have meant to

void. Mortgage has not been annulled)

convey house as chattel, or at least, intended to

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