Evangelista v.

Alto Surety
GR No. No. L-11139, April 23, 1958

Petitioner Santos Evangelista sued Rivera for the collection of a sum of money on June 4,
1949. On the same date, he obtained a writ of preliminary attachment, which was levied upon
a house built by Rivera, a lessee, on land owned by respondent lessor Alto Surety. The levy
was made pursuant to the rules governing the levy of real properties.

In due course, judgment was rendered in favor of Evangelista, who, on October 8, 1951,
bought the house at the public auction made to satisfy the judgment. The corresponding deed
of sale was issued to him on October 22, 1952. When Evangelista sought to take possession
of the house, he was told that Alto Surety was now the owner of the house because the latter
allegedly bought the house at an auction sale on September 29, 1950. It turned out that Alto
Surety likewise filed an action against Rivera and likewise obtained a favorable judgment.
The corresponding deed was issued to Alto Surety on May 10, 1952.

Subsequently, Evangelista instituted an action against Alto Surety and Rivera for the purpose
of establishing his title over said house. The trial court ruled in favor of Evangelista. On
appeal, however, the Court of Appeals reversed the decision of the trial court on the ground
that Evangelista did not acquire a preferential lien through the preliminary writ of
attachment because the house was levied as if it were an immovable property. The Court
of Appeals was of the opinion that the house should have been levied pursuant to the rules
governing the levy of personal property (apparently for the reason that the house was
constructed on land belonging to another).

Whether a house, constructed by the lessee of the land on which it is built, should be dealt
with, for the purpose of attachment, as immovable property, or as personal property.

The house is an immovable property. As explicitly held, in Ladera v. Hodges, a true building
(not merely superimposed on the soil) is immovable or real property, whether it is erected by
the owner of the land or by usufructuary or lessee.

It is true that the parties to a deed of chattel mortgage may agree to consider a house as
personal property for purposes of said contract. However, this view is good only insofar
as the contracting parties are concerned. It is based, partly, upon the principle of
estoppel. Neither this principle nor said view, is applicable to strangers to said contract.
Much less is it at the point where there has been no contract whatsoever, with respect to the
status of the house involved, as in the case at the bar.

As held in Manarang v Ofilada, “Sales on execution affect the public and third persons. The
regulations governing sales on execution are for public officials to follow. The form of
proceedings prescribed for each kind of property is suited to its character, not to the
character, which the parties have given to it or desire to give it. When the rules speak of
personal property, property that is ordinarily so considered is meant; and when real
property is spoken of, it means property that is generally known as real property. The
regulations were never intended to suit the consideration that parties may have privately
given to the property levied upon. Enforcement of regulations would be difficult were the
convenience or agreement of private parties to determine or govern the nature of the
proceedings. We, therefore, hold that the mere fact that a house was the subject of the 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 of public auction.”

PROPERTY; HOUSE is NOT PERSONAL BUT REAL PROPERTY FOR PURPOSES

OF ATTACHMENT. A house is not personal property, much less debt, credit, or other
personal property capable of manual delivery, but immovable property. "A true building (not
merely superimposed on the soil), is immovable or real property, whether it is erected by the
owner of the land or by a usufructuary or lessee" (Laddera vs. Hodges, 48 Off. Gaz., 5374.)
and the attachment of such building is subject to the provisions of subsection (a) of section 7,
Rule 59 of the Rules of Court.
Evangelista v. Abad
G.R. No. L-31684, June 28, 1973

On October 9, 1954, a co-partnership was formed under the name of "Evangelista & Co." On
June 7, 1955, the Articles of Co-partnership was amended to include herein respondent,
Estrella Abad Santos, as an industrial partner, with herein petitioners Domingo C.
Evangelista, Jr., Leonardo Atienza Abad Santos and Conchita P. Navarro, the original
capitalist partners, remaining in that capacity, with a contribution of P17,500 each. The
amended Articles provided, inter alia, that "the contribution of Estrella Abad Santos consists
of her industry being an industrial partner", and that the profits and losses "shall be divided
and distributed among the partners ... in the proportion of 70% for the first three partners,
Domingo C. Evangelista, Jr., Conchita P. Navarro and Leonardo Atienza Abad Santos to be
divided among them equally; and 30% for the fourth partner Estrella Abad Santos."

On December 17, 1963, herein respondent filed suit against the three other partners in the
Court of First Instance of Manila, alleging that the partnership, which was also made a party-
defendant, had been paying dividends to the partners except to her; and that notwithstanding
her demands the defendants had refused and continued to refuse and let her examine the
partnership books or to give her information regarding the partnership affairs to pay her any
share in the dividends declared by the partnership.

Whether or not the respondent is an industrial partner or a mere profit-sharer.

Appellants are virtually estopped from attempting to detract from the probative force of the
said exhibits because they all bear the imprint of their knowledge and consent, and there is no
credible showing that they ever protested against or opposed their contents prior to the filing
of their answer to appellee's complaint. As a matter of fact, all the appellant Evangelista, Jr.,
would have us believe as against the cumulative force of the appellee's aforesaid
documentary evidence is the appellee's Exhibit "A", as confirmed and corroborated by the
other exhibits already mentioned, does not express the true intent and agreement of the
parties thereto, the real understanding between them being the appellee would be merely a
profit sharer entitled to 30% of the net profits that may be realized between the partners from
June 7, 1955, until the mortgage loan of P30,000.00 to be obtained from the RFC shall have
been fully paid. This version, however, is discredited not only by the aforesaid documentary
evidence brought forward by the appellee but also by the fact that from June 7, 1955, up to
the filing of their answer to the complaint on February 8, 1964, or a period of over eight (8)
years, appellants did nothing to correct the alleged false agreement of the parties contained in
Exhibit "A". It is thus reasonable to suppose that, had the appellee not filed the present
action, the appellants would not have advanced this obvious afterthought that Exhibit "A"
does not express the true intent and agreement of the parties thereto.
Associated Insurance and Surety Company, Inc. v. Isabel Iya, Adriano Valino and
Lucia Valino
GR No. L-10837-38, May 30, 1958

Spouses Valino executed two mortgages in favor of two different mortgagees. The first was a
chattel mortgage in favor of Associated Insurance covering the house. The second was a real
estate mortgage in favor of Isabel Iya over the same house and lot. Spouses Valino failed to
pay both of their obligations. Associated Insurance then foreclosed the property but was
shocked by the existence of another mortgage over the house. Associated Insurance then
asked for preferential rights over the said mortgaged house. In turn, Isabel Iya questioned the
validity of the subject contract of the chattel mortgage. Hence, this petition.

May Associated Insurance rightfully demand the exclusion of the house from the foreclosure
of real estate mortgage by Iya?

No, because a mortgage creditor who purchases real properties at an extrajudicial foreclosure
sale thereof by virtue of a chattel mortgage constituted in his favor is null and void with
respect to real properties and he acquires no right thereto.

In the case at bar, since the house is the subject of the chattel mortgage, it is clearly null and
void.

Notes:

IMMOVABLE PROPERTY; BUILDINGS; IMMOVABLE STATUS OF BUILDING

UNAFFECTED BY CHANGE OF OWNERSHIP OF LAND. A building is an immovable
property irrespective of whether or not said structure and the land on which it adheres belong
to the same owner (Lopez vs. Orosa, supra, p. 98). It cannot be divested of its character as a
realty by the fact that the land on which it is constructed belongs to another. If the status of
the building were to depend on the ownership of the land, a situation would be created where
a permanent fixture changes its nature or character as the ownership of the land changes
hands.

CHATTEL MORTGAGE; SUBJECT OF; EFFECT WHERE THE INTEREST

CONVEYED IS IMMOVABLE. As personal properties could only be the subject of a chattel
mortgage, the execution of a chattel mortgage on a building is invalid and a nullity, the
registration of the chattel notwithstanding. The registration of the chattel in the Chattel
Mortgage Registry produced no effect whatsoever for where the interest conveyed is in the
nature of a real property, the registration of the document in the registry of chattels is merely
a futile act. Thus, the registration of the chattel mortgage of a building of strong materials
produces no effect as far as the building is concerned (Leung Yee vs. Strong Machinery Co.,
37 Phil. 644).

RIGHT ACQUIRED BY PURCHASER AT AN EXTRA-JUDICIAL FORECLOSURE

SALE. A mortgage creditor who purchases real properties at an extra-judicial foreclosure sale
thereof by virtue of a chattel mortgage constituted in his favor, which mortgage has been
declared null and void with respect to said real properties, acquires no right thereto by virtue
of the said sale (De la Riva vs. Ah Kee, 60 Phil. 899).
REPUBLIC OF THE PHILIPPINES vs POLICARPIO GONZALES and AUGUSTO
JOSUE
G.R. Nos. L-45338-39, July 31, 1991

Facts:

Two (2) parcels of land in Malabon were formerly a deep swamp until the occupants thereof,
among them appellants Policarpio Gonzales and Augusta Josue, started filling it.Each of the
appellants who are brothers-in-law, constructed a mixed residential and commercial building
on the interior part of Lot 2.

President Ramon Magsaysay issued Proclamation No. 144, entitled "Reserving for street
Widening and Parking Space Purposes Certain Parcels of the Public Domain Situated in the
Municipality of Malabon, Province of Rizal, Island of Luzon." Lots 1 and 2 were specifically
withdrawn from sale or settlement and reserved for the purposes mentioned in the
Proclamation.

Appellants claimed that the lot was covered by a lease application, and later miscellaneous
sales application, filed before the Bureau of Lands; (2) that he had a municipal permit to
construct a building as well as a business license duly issued by the office of the Mayor of
Malabon; and (3) that the lot occupied by him was not needed by the municipality of
Malabon in the widening of F. Sevilla Boulevard. Upon order of the Court to vacate the lots,
they appealed to the CA contending that Proclamation No. 144 is not in accordance with
Section 83 of the Public Land Law, Commonwealth Act No. 141, and therefore, invalid.
Under said law "parking space" is not one of those reservations for public benefit which the
President of the Philippines may designate by proclamation from any tracts of land of the
public domain. The reservation for "parking lots" under the presidential proclamation in
question is not required by public interest, nor it is for the benefit of the public, because only
those who have cars can use the parking lot.

Issue:

1. Whether or not the lots remained public lands and subject to free disposition of the
Government

2. Whether or not the widening of the street and parking space redound to public benefit to
declare Proclamation No. 144 lawful and valid

Ruling:

Yes. The miscellaneous sales application, however of appellant Policarpio Gonzales had not
been approved by the Bureau of Lands at the time Proclamation No. 144 was issued; the land
therefore retained its character as land of the public domain. On the other hand, the
miscellaneous sales application of appellant Augusto Josue had already been rejected in an
Order of the Director of Lands dated 8 January 1954. Accordingly, no private rights had
accrued and become vested in appellants. In both cases, the lots remained public lands and
were in fact subject to the free disposition and control of the Government.

Yes. To constitute public use, the public, in general, should have equal or common rights to
use the land or facility involved on the same terms, however, limited in number the people
who can actually avail themselves of it at a given time. There is nothing in Proclamation
No.144 that excludes non-car-owners from using a widened street or a parking area should
they in fact happen to be driving cars; the opportunity to avail of the use thereof remains open
for the public in general.

CONSTITUTIONAL LAW; AMERICAN COURTS HAVE UPHELD THE RIGHT OF

MUNICIPAL GOVERNMENTS TO CONSTRUCT OFF-STREET PARKING
FACILITIES AS CLEARLY REDOUNDING TO THE PUBLIC BENEFIT. Under the
Land Transportation and Traffic Code, parking in designated areas along public streets or
highways is allowed which clearly indicates that provision for parking spaces serves a useful
purpose. In other jurisdictions where traffic is at least as voluminous as here, the provision by
municipal governments of parking space is not limited to parking along public streets or
highways. There has been a marked trend to build off-street parking facilities with the view to
removing parked cars from the streets. While the provision of off-street parking facilities or
carparks has been commonly undertaken by private enterprises, municipal governments have
been constrained to put up carparks in response to public necessity where private enterprises
had failed to keep up with the growing public demand. American courts have upheld the right
of municipal governments to construct off-street parking facilities as clearly redounding to
the public benefit.

THE CONCEPTION URGED BY APPELLANTS IS BOTH FLAWED AND OBSOLETE

SINCE THE NUMBER OF USERS IS NOT THE YARDSTICK IN DETERMINING
WHETHER PROPERTY IS PROPERLY RESERVED FOR PUBLIC USE OR PUBLIC
BENEFIT. Appellants, however, allege that the benefits, if any, that may be derived from the
proposed street-widening and parking space will be confined to people who have cars, hence
there would be a lack of the essential feature of property reserved for public use or benefit.
Appellants would restrict property reserved for public use or benefit to include only property
susceptible to being utilized by a generally unlimited number of people. The conception
urged by appellants is both flawed and obsolete since the number of users is not the yardstick
in determining whether the property is properly reserved for public use or public benefit.

THERE IS NOTHING IN PROCLAMATION NO. 144 WHICH EXCLUDES NON-CAR-

OWNERS FROM USING A WIDENED STREET OR A PARKING AREA SHOULD
THEY, IN FACT, HAPPEN TO BE DRIVING CARS, THE OPPORTUNITY TO AVAIL
OF THE USE THEREOF REMAINS OPEN FOR THE PUBLIC IN GENERAL. To
constitute public use, the public, in general, should have equal or common rights to use the
land or facility involved on the same terms, however, limited in number the people who can
actually avail themselves of it at a given time. There is nothing in Proclamation No. 144 that
excludes non-car-owners from using a widened street or a parking area should they, in fact,
happen to be driving cars; the opportunity to avail of the use thereof remains open for the
public in general.

THE BENEFITS DIRECTLY OBTAINED BY CAR OWNERS DO NOT DETERMINE

EITHER THE VALIDITY OR INVALIDITY OF PROCLAMATION NO. 144. Besides, the
benefits directly obtained by car owners do not determine either the validity or invalidity of
Proclamation No. 144. What is important are the long-term benefits that the proposed street
widening and parking areas make available to the public in the form of enhanced, safe, and
orderly transportation on land. This is the kind of public benefit envisioned by the Municipal
Council of Malabon, Rizal, and which was sought to be promoted by the President in issuing
Proclamation No. 144.
COURT BELIEVES AND SO HOLD THAT PROCLAMATION NO. 144 WAS LAWFUL
AND VALID. We believe and so hold that Proclamation No. 144 was lawful and valid.

NO PRIVATE RIGHTS HAD ACCRUED AND BECOME VESTED IN APPELLANTS.

The miscellaneous sales application, however of appellant Policarpio Gonzales had not been
approved by the Bureau of Lands at the time Proclamation No. 144 was issued; the land
therefore retained its character as land of the public domain. On the other hand, the
miscellaneous sales application of appellant Augusto Josue had already been rejected in an
Order of the Director of Lands dated 8 January 1954. Accordingly, no private rights had
accrued and become vested in appellants. In both cases, the lots remained public lands and
were in fact subject to the free disposition and control of the Government.