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L-10817 Case Digest

Vicente Orosa Jr. contracted Lopez-Castelo Sawmill, owned by Enrique Lopez, to supply lumber for building the Plaza Theatre. Lopez delivered lumber worth P62,255.85 but was only paid P20,848.50, leaving a balance of P41,771.35. Lopez filed a case to recover this amount. The court ruled that Lopez had a materialman's lien over the theatre building but not the land, as the land was already mortgaged to a surety company before construction began. The lien only attached to the building as an immovable property, not the land. The interest of the mortgagee over the land was superior and could not be subject to Lopez's materialman's

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76 views

L-10817 Case Digest

Vicente Orosa Jr. contracted Lopez-Castelo Sawmill, owned by Enrique Lopez, to supply lumber for building the Plaza Theatre. Lopez delivered lumber worth P62,255.85 but was only paid P20,848.50, leaving a balance of P41,771.35. Lopez filed a case to recover this amount. The court ruled that Lopez had a materialman's lien over the theatre building but not the land, as the land was already mortgaged to a surety company before construction began. The lien only attached to the building as an immovable property, not the land. The interest of the mortgagee over the land was superior and could not be subject to Lopez's materialman's

Uploaded by

Raym Trabajo
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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G.R. Nos.

L-10817-18 February 28, 1958

ENRIQUE LOPEZ, petitioner,


vs.
VICENTE OROSA, JR., and PLAZA THEATRE, INC., respondents.

FACTS:
Vicente Orosa, Jr. invited Enrique Lopez who is doing business under the trade name Lopez-
Castelo Sawmill to be one of the investors of what his family and close friends had planned to build
which is the Plaza Theatre. However, Lopez refused and instead he offered to supply the lumber in
building the Plaza theatre. They have verbal agreement that payment would be on demand and not
cash on delivery basis. The total amount of the materials delivered is P62,255.85 but Lopez was paid
only in P20,848.50 with the balance of P41,771.35.

Orosa and Belarmino Rustia, president of the corporation promised to Lopez that they will
apply for a bank loan mortgaging the Plaza Theatre without knowing that both the land and building
have already been a counter security of their current loan from Philippine National Bank with the
Luzon surety company as surety.

Due to unsettled obligation, Lopez filed a complaint against Orosa and Plaza Theatre praying
that they be sentenced to pay him jointly and severally the sum of P41771.35 and should the
defendants failed to pay, the land and building be sold in public auction and the proceeds thereof be
applied to said indebtedness.

The lower court ruled that defendants were jointly liable for the unpaid balance of the cost of
the lumber used and the plaintiff thus acquired the materialman’s lien over the same. The CA
affirmed the ruling of the lower court.

ISSUES:
Whether a materialman’s lien for the value of the materials used in the construction of a
building attaches to said structure alone and does not extend to the land on which the building is
adhered to.

Whether the lower court and CA erred in not providing that the materialman’s liens are
superior to the mortgage executed in favor of surety company not only on the building but also on
the land.

RULING:
The materialman’s lien should only attach to the building and not on the land. As specified in
Article 1923 of the old Spanish Civil Code that, refection credits are preferred could refer only to
buildings which are also classified as real properties, upon which said refection was made.

For 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 in the enumeration of what may constitute
real properties could only mean one thing – that a building is by itself an immovable property.

The lower court was right in, holding at the interest of the mortgagee over the land it is
superior and cannot be made subject to the material man’s lien. The lien in favor of appellant for the
unpaid value of the lumber used in the construction of the building attaches only to said structure
and to no other property of the obligors. Considering the fact that when Lopez started the delivery of
lumber the land was not yet owned by the corporation; that the mortgage in favor of Luzon Surety
Company was previously registered under Act No. 3344.

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