Ladera vs.
Hodges 6, 1948, Hodges sold the lot to Manuel Villa and on the same day the latter
Ladera vs. Hodges
No. 8027-R. September 23, 1952.
Reyes, J.B.L., J.
Doctrine: Article 315 of the Civil Code (now Article 415, New Civil Code)
makes no distinction as to whether the owner of the land is or is not the owner
of the building.
Facts: Ladera entered into a contract with Hodges whereby the latter
promised to sell a lot subject to certain terms and conditions. In case of failure
of the purchaser to make a monthly payment within 60 days after it fell due,
“this contract may be taken and considered as rescinded and annulled,” in
which case all sums of money paid would be considered rentals and the
vendor shall be at liberty to dispose of the parcel of land with all the
improvements theron to any other person in a manner as if this contract had
never been made. After the execution of the contract, Ladera built on a lot a
house of mixed materials assessed at P4500.
Unfortunately, Ladera failed to pay the agreed installments, whereupon the
appellant rescinded the contract and filed an action for ejectment. The MTC
rendered a decision upon agreement of the parties- Ladera to vacate and
surrender possession of the lot and pay P10 a month until delivery of the
premises. The court issued an alias writ of execution and pursuant thereto the
sheriff levied upon all rights, interests, and participation over your house
standing on the lot. The sheriff posted the notices of the sale but did not
publish the same in a newspaper of general circulation.
At the auction sale Ladera did not attend because she had gone to Manila and
the sheriff sold the property to Avelina Magno as the highest bidder. On July
purchased the house from Magno for P200 but this last transaction was not
recorded.
Ladera returned to Iloilo after the sale and learned of its results. She went to
see the sheriff and upon the latter’s representation that she could redeem the
property, she paid him P230 and the sheriff issued a receipt. It does not
appear, however, that this money was turned over to Hodges. Thereupon,
Ladera spouses filed an action against Hodges, the sheriff, and the judgment
sale purchasers, Magno and Villa to set aside the sale and recover the house.
The lower court ruled in favor of Ladera. Hodges et al contend that the house
being built on land owned by another person should be regarded in law as
movable or personal property.
Issue: Whether the house being built on land owned by another should be
regarded as movable property.
Held: According to Article 334 of the Civil Code (now 415), Immovable
property are the following: “Lands, building, roads, and constructions of all
kinds adhering to the soil;” Applying the principle Ubi lex non distinguit nec
nos distinguere debemu, the law makes no distinction as to whether the owner
of the land is or is not the owner of the building. In view of the plain terms of
the statute, the only possible doubt could arise in the case of a house sold for
demolition.
In the case of immovables by destination, the code requires that they be placed
by the owner of the tenement, in order to acquire the same nature or
consideration of real property. In cases of immovable by incorporation, the
code nowhere requires that the attachment or incorporation be made by the
owner of the land. The only criterion is union or incorporation with the soil.
Ladera did not declare his house to be a chattel mortgage. The object of the
levy or sale was real property. The publication in a newspaper of general
circulation was indispensible. It being admitted that no publication was ever
made, the execution sale was void and conferred no title on the purchaser.

The alleged purchaser at the auction sale, Magno, is a mere employee of the
creditor Hodges and the low bid made by her as well as the fact that she sold
the house to Villa on the same day that Hodges sold him the land, proves that
she was merely acting for and in behalf of Hodges.

It should be noted that in sales of immovables, the lack of title of the vendor
taints the rights of subsequent purchasers. Unlike in sales of chattels and
personalty, in transactions covering real property, possession in good faith is
not equivalent to title.
Bicerra v. Teneza [G.R. No. L-16218. November
29, 1962.]
Bicerra v. Teneza
[G.R. No. L-16218. November 29, 1962.]
En Banc, Makalintal (J): 10 concur.
FACTS: The Bicerras are supposedly the owners of the house worth P200,
built on a lot owned by them in Lagangilang, Abra; which the Tenezas
forcibly demolished in January 1957, claiming to be the owners thereof. The
materials of the house were placed in the custody of the barrio lieutenant. The
Bicerras filed a complaint claiming actual damages of P200, moral and
consequential damages amounting to P600, and the costs. The CFI Abra
dismissed the complaint claiming that the action was within the exclusive
(original) jurisdiction of the Justice of the Peace Court of Lagangilang, Abra.
on land belonging to a different owner. But once the house is demolished, as
in this case, it ceases to exist as such and hence its character as an immovable
likewise ceases.
2. Recovery of damages not exceeding P2,000 and involving no real property
belong to the Justice of the Peace Court
The complaint is for recovery of damages, the only positive relief prayed for.
Further, a declaration of being the owners of the dismantled house and/or of
the materials in no wise constitutes the relief itself which if granted by final
judgment could be enforceable by execution, but is only incidental to the real
cause of action to recover damages. As this is a case for recovery of damages
where the demand does not exceed PhP 2,000 and that there is no real
property litigated as the house has ceased to exist, the case is within the
jurisdiction of the Justice of the Peace Court (as per Section 88, RA 296 as
amended) and not the CFI (Section 44, id.)

ISSUE:
W/N the action involves title to real propety.
W/N the dismissal of the complaint was proper.

HELD:
The Supreme Court affirmed the order appealed. Having been admitted in
forma pauperis, no costs were adjudged.

1. House is immovable property even if situated on land belonging to a

different owner; Exception, when demolished
A house is classified as immovable property by reason of its adherence to the
soil on which it is built (Article 415, paragraph 1, Civil Code). This
classification holds true regardless of the fact that the house may be situated
Leung Yee vs Strong Machinery Co HELD
1. Where the interest conveyed is of the nature of real property, the placing of
the document on record in the Chattel Mortgage Registry is a futile act.
Posted on June 22, 2013 by Sheree Tampus

Chattel Mortgage refers to the mortgage of Personal Property executed in

Leung Yee vs Strong Machinery Co.
37 PHIL 644
GR No. L-11658
February 15, 1918
FACTS
The Compania Agricola Filipina (CAF) purchased from Strong Machinery
Co. rice–cleaning machines which CAF installed in one of its buildings.
As security for the purchase price, CAF executed a chattel mortgage on the
machines and the building on which they had been installed.
When CEF failed to pay, the registered mortgage was foreclosed and Strong
Machinery Co. purchased the building. This sale was annotated in the Chattel
Mortgage Registry.
Later, Strong Machinery Co. also purchased from Agricola the lot on which
the building was constructed. The sale wasn't registered in the Registry of
Property BUT Strong Machinery Co. took possession of the building and the
lot.
However, the same building had been previously purchased by Leung Yee, a
creditor of Agricola, at a sheriff's sale despite his knowledge of the prior sale
in favor of Strong Machinery Co.. The sale to Leung Yee was registered in the
Registry of Property.
ISSUES
1. Was the property's nature changed by its registration in the Chattel
Mortgage Registry?
2. Who has a better right to the property?
the manner and form prescribed in the statute.
Since the building is REAL PROPERTY, its sale as annotated in the Chattel
Mortgage Registry cannot be given the legal effect of registration in the
Registry of Real Property.
The mere fact that the parties decided to deal with the building as personal
property does not change its character as real property.
Neither the original registry in the chattel mortgage registry, nor the
annotation in said registry of the sale of the mortgaged property had any effect
on the building.
1. Art. 1473 of the New Civil Code provides the following rules on
determining ownership of property which has been sold to different
vendees:
 If Personal Property – grant ownership to person who 1st
possessed it in good faith
 If Real Property – grant ownership to person who 1st recorded it
in the Registry
If no entry – grant to person who 1st possessed in good faith
If no proof of possession – grant to person who presents oldest
title
Since Leung Yee purchased the property despite knowledge of the previous
purchase of the same by Strong Machinery Co., it follows that Leung Yee was
not a purchaser in good faith.

“One who purchases real estate with knowledge of a defect or lack of title in
his vendor cannot claim that he has acquired title thereto in good faith as
against the true owner of the land or of an interest therein. The same rule must
be applied to one who has knowledge of facts which should have put him
upon such inquiry and investigation as might be necessary to acquaint him
with the defects in the title of his vendor.”

Good Faith, or the want of it, is a “state or condition of mind which can
only be judged of by actual or fancied tokens or signs.” (Wilder vs.
Gilman, 55Vt., 504, 505; Cf. Cardenas Lumber Co. vs. Shadel, 52 La. Ann.,
2094-2098; Pinkerton Bros. Co. vs. Bromley, 119Mich., 8, 10, 17.)

Honesty Of Intention is the honest lawful intent constituting good faith. It

implies a freedom from knowledge and circumstances which ought to put
a person on inquiry.

As such, proof of such knowledge overcomes the presumption of good faith.

Following the rule on possessory rights provided in Art. 1473, Strong

Machinery Co. has a better right to the property since it first purchased the
same ahead of Leung Yee, the latter not being a purchaser in good faith.
STANDARD OIL COMPANY V
JARAMILLO
The Power of the Registry of Deeds is Ministerial, and The absolute criterion
to determine between real and personal property is NOT supplied by the civil
code. Parties may agree what to treat as personal property and what to treat
as real property.
FACTS
On November 27, 1922, Gervasia de la Rosa was the lessee of a parcel of land
situated in the City of Manila and owner of the house of really tough materials
built thereon. She executed that fine day a document in the form of a chattel
mortgage, purporting to convey to Standard Oil Company of New York (by
way of mortgage) both the leasehold interest in said lot and the building.
After said document had been duly acknowledged and delivered, Standard Oil
presented it to Joaquin Jaramillo, as register of deeds of the City of Manila,
for the purpose of having the same recorded in the book of record of chattel
mortgages. Upon examination of the instrument, Jaramillo opined that it was
not chattel mortgage, for the reason that the interest therein mortgaged did not
appear to be personal property, within the meaning of the Chattel Mortgage
Law, and registration was refused on this ground only.
Later this confusion was brought to the Supreme Court upon demurrer by
Joaquin Jaramillo, register of deeds of the City of Manila, to an original
petition of the Standard Oil Company of New York, demanding a mandamus
to compel the respondent to record in the proper register a document
purporting to be a chattel mortgage executed in the City of Manila by
Gervasia de la Rosa, Vda. de Vera, in favor of the Standard Oil Company of
New York.
The Supreme Court overruled the demurrer, and ordered that unless Jaramillo
interposes a sufficient answer to the petition for mandamus by Standard Oil
within 5 days of notification, the writ would be issued as prayed, but without
costs.
ISSUE:
w/n the Registry of Deeds can determine the nature of property to be
registered.
w/n the Registry of Deeds has powers beyond Ministerial discretion.
RESOLUTION:
1.Jaramillo, register of deeds, does not have judicial or quasi-judicial power to
determine nature of document registered as chattel mortgage Section 198 of
the Administrative Code, originally of Section 15 of the Chattel Mortgage
Law (Act 1508 as amended by Act 2496), does not confer upon the register of
deeds any authority whatever in respect to the "qualification," as the term is
used in Spanish law, of chattel mortgages. His duties in respect to such
instruments are ministerial only. The efficacy of the act of recording a chattel
mortgage consists in the fact that it operates as constructive notice of the
existence of the contract, and the legal effects of the contract must be
discovered in the instrument itself in relation with the fact of notice.
2.Article 334 and 335 of the Civil Code does not supply absolute criterion on
distinction between real and personal property for purpose of the application
of the Chattel Mortgage Law Article 334 and 335 of the Civil Code supply no
absolute criterion for discriminating between real property and personal
property for purposes of the application of the Chattel Mortgage Law. Those
articles state rules which, considered as a general doctrine, are law in this
jurisdiction; but it must not be forgotten that under given conditions property
may have character different from that imputed to it in said articles. It is
undeniable that the parties to a contract may be agreement treat as personal
property that which by nature would be real property; and it is a familiar
phenomenon to see things classed as real property for purposes of taxation
which on general principle might be considered personal property. Other
situations are constantly arising, and from time to time are presented to the
Supreme Court, in which the proper classification of one thing or another as
real or personal property may be said to be doubtful.]
SIBAL v. VALDEZ
For the purpose of attachment and execution, and for the purposes of the
Chattel Mortgage Law, "ungathered products" have the nature of personal
property.
FACTS:
(this case has a lot of confusing facts, just read the original if this digest fails
to compress everything) The Deputy Sheriff of the Province of Tarlac, by
virtue of a writ of execution issued by the Court of First Instance of
Pampanga, attached and sold to the defendant Emiliano J. Valdez the sugar
cane planted by the plaintiff and his tenants on seven parcels of land. Included
also in those attached were real properties wherein 8mout of the 11 parcels of
land, house and camarin which was first acquired by Macondray & Co and
then later on bought by Valdez in an auction. First Cause for petitioner: That
Within one year from the date of the attachment and sale the plaintiff offered
to redeem said sugar cane and tendered to the defendant Valdez the amount
sufficient to cover the price paid by the latter, the interest thereon and any
assessments or taxes which he may have paid thereon after the purchase, and
the interest corresponding thereto and that Valdez refused to accept the money
and to return the sugar cane to the plaintiff. Second Cause for petitioner: That
Valdez was trying to harvest palay from four out of seven parcels of land.
Petitioner filed for preliminary injunction to stop defendant from 1)
distributing the lands 2) harvesting and selling the sugar canes, and 3)
harvesting and selling the palay. The writ was issued which prevented
defendant from planting and harvesting the lands. Defendant later appealed
claiming that he was the owner of many of the alleged land thus he also owns
the crops of it. The court awarded the defendant 9,439.08 because the
petitioner unduly denied the defendant to plant in his land thus preventing him
to profit thereto.
ISSUE:
Whether the sugar cane is personal o real property? (The relevance of the
issue is with regards to the sugar cane of the Petitioner which came from the
land that now belongs to the defendant)
RULING:
It is contended that sugar cane comes under the classification of real property
as "ungathered products" in paragraph 2 of article 334 of the Civil Code. Said
paragraph 2 of article 334 enumerates as real property the following: Trees,
plants, and ungathered products, while they are annexed to the land or form an
integral part of any immovable property." That article, however, has received
in recent years an interpretation by the Tribunal Supremo de España, which
holds that, under certain conditions, growing crops may be considered as
personal property.
In some cases "standing crops" may be considered and dealt with as personal
property. In the case of Lumber Co. vs. Sheriff and Tax Collector (106 La.,
418) the Supreme Court said: "True, by article 465 of the Civil Code it is
provided that 'standing crops and the fruits of trees not gathered and trees
before they are cut down . . . are considered as part of the land to which they
are attached, but the immovability provided for is only one in abstracto and
without reference to rights on or to the crop acquired by others than the
owners of the property to which the crop is attached. . . . The existence of a
right on the growing crop is a mobilization by anticipation, a gathering as it
were in advance, rendering the crop movable quoad the right acquired therein.
Our jurisprudence recognizes the possible mobilization of the growing crop."

For the purpose of attachment and execution, and for the purposes of the
Chattel Mortgage Law, "ungathered products" have the nature of personal
property. SC lowered the award for damages to the defendant to 8,900.80 by
acknowledging the fact that some of the sugar canes were owned by the
petitioner and by reducing the calculated expected yield or profit that
defendant would have made if petitioner did not judicially prevent him from
planting and harvesting his lands.
Davao Sawmill Co. vs Castillo
Posted on June 21, 2013 by Sheree Tampus
Davao Sawmill Co. vs Castillo
61 PHIL 709
GR No. L-40411
August 7, 1935
A tenant placed machines for use in a sawmill on the landlord's land.
FACTS
Davao Sawmill Co., operated a sawmill. The land upon which the business
was conducted was leased from another person. On the land, Davao Sawmill
erected a building which housed the machinery it used. Some of the machines
were mounted and placed on foundations of cement. In the contract of lease,
Davo Sawmill agreed to turn over free of charge all improvements and
buildings erected by it on the premises with the exception of machineries,
which shall remain with the Davao Sawmill. In an action brought by the
Davao Light and Power Co., judgment was rendered against Davao Sawmill.
A writ of execution was issued and the machineries placed on the sawmill
were levied upon as personalty by the sheriff. Davao Light and Power Co.,
proceeded to purchase the machinery and other properties auctioned by the
sheriff.
ISSUE
Are the machineries real or personal property?
HELD
Art.415 of the New Civil Code provides that Real Property consists of:
(1) Lands, buildings, roads and constructions of all kinds adhered to the
soil;
xxx
(5) Machinery, receptacles, instruments or implements intended by the
owner pf the tenement for an industry ot works which may be carried on
in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works;
Appellant should have registered its protest before or at the time of the sale of
the property. While not conclusive, the appellant's characterization of the
property as chattels is indicative of intention and impresses upon the property
the character determined by the parties.
Machinery is naturally movable. However, machinery may be immobilized by
destination or purpose under the following conditions:
General Rule: The machinery only becomes immobilized if placed in a plant
by the owner of the property or plant.
Immobilization cannot be made by a tenant, a usufructuary, or any
person having only a temporary right.
Exception: The tenant, usufructuary, or temporary possessor acted as agent of
the owner of the premises; or he intended to permanently give away the
property in favor of the owner.
As a rule, therefore, the machinery should be considered as Personal Property,
since it was not placed on the land by the owner of the said land.
Mindanao Bus Company vs City Assessor Before movables may be deemed immobilized in contemplation of Article 415
(5), it is necessary that they must first be “essential” and “principal” elements
of an industry or works without which such industry or works would be unable
Posted on June 24, 2013 by Sheree Tampus to function or carry on the industrial purpose for which it was established.
Mindanao Bus Company vs City Assessor In this case, the tools and equipment in question are by their nature, not
116 PHIL 501
essential and principal elements of Mindanao Bus Co.’s business of
GR No. L-17870
transporting passengers and cargoes by motor trucks. They are merely
September 29, 1962
incidentals — acquired as movables and used only for expediency to facilitate
and/or improve its service. Even without such tools and equipments, its
FACTS
business may be carried on.
The City Assessor of Cagayan de Oro City assessed a realty tax on several
equipment and machineries of Mindanao Bus Co. These equipment were
Aside from the element of essentiality the Art.415 (5) also requires that the
placed on wooden or cement platforms and can be moved around in the bus
industry or works be carried on in a building or on a piece of land. A sawmill
company’s repair shop. The bus company appealed the assessment to the
would also be installed in a building on land more or less permanently, and
Board of Tax Appeals on the ground that the same are not realty. The Board
the sawing is conducted in the land/building.
of Tax Appeals of the City, however, sustained the city assessor. Thus, the bus
company appealed to the Court of Tax Appeals, which likewise sustained the
However, in the instant case, the equipments in question are destined only to
city assessor.
repair or service the transportation business, which is not carried on in a
building or permanently on a piece of land, as demanded by law. The
HELD
equipments in question are not absolutely essential to the petitioner's
transportation business, and petitioner's business is not carried on in a
Art. 415 of the NCC classifies the following as immovable property:
building, tenement or on a specified land.
xxx
As such, the equipments in question are not deemed real property because the
transportation business is not carried on in a building or permanently on a
(5) Machinery, receptacles, instruments or implements intended by the
piece of land, as demanded by law.
owner pf the tenement for an industry or works which may be carried
on in a building or on a piece of land, and which tend directly to meet
The transportation business could be carried on without the repair or service
the needs of the said industry or works;
shop, if its rolling equipment is repaired or serviced in another shop
belonging to another.
Note that the stipulation expressly states that the equipment are placed on
wooden or cement platforms. They can be moved around and about in
petitioner's repair shop.
Therefore, the imposition of realty tax on the maintenance and repair
equipment was not proper because the properties involved were not real
property under Article 415 (5).
BERKENKOTTER vs. CU UNJIENG E HIJOS permanent improvement on said sugar central and subjects said machinery and
BERKENKOTTER vs. CU UNJIENG E HIJOS equipment to the mortgage constituted thereon.

Facts:

Mabalacat Sugar obtained loan from Hijos secured by a land and the existing
and future attachments thereto. Mabalacat Sugar decided to increase the
milling capacity of the sugar mill and installed

Machinery and equipment. Plaintiff advanced the amount and the machineries
and equipment were installed.

Issue:

Whether or not the lower court erred in declaring that the additional
machinery and equipment, as improvement incorporated with the central are
subject to the mortgage deed executed in favor of the defendants Cu Unjieng e
Hijos.

Held:

Yes. The installation of a machinery and equipment in a mortgaged sugar

central, in lieu of another of less capacity, for the purpose of carrying out the
industrial functions of the latter and increasing production, constitutes a
PEOPLE'S BANK AND TRUST CO. vs.
DAHICAN LUMBER COMPANY G.R. No. L-
17500 May 16, 1967
PEOPLE'S BANK AND TRUST CO. vs. DAHICAN LUMBER COMPANY
G.R. No. L-17500 May 16, 1967
Facts:
On September 8, 1948, Atlantic Gulf & Pacific Company of Manila, a West
Virginia corporation licensed to do business in the Philippines sold and
assigned all its rights in the Dahican Lumber concession to Dahican Lumber
Company - hereinafter referred to as DALCO - for the total sum of
$500,000.00, of which only the amount of $50,000.00 was paid. Thereafter, to
develop the concession, DALCO obtained various loans from the People's
Bank & Trust Company amounting, as of July 13, 1950, to P200,000.00. In
addition, DALCO obtained, through the BANK, a loan of $250,000.00 from
the Export-Import Bank of Washington D.C., evidenced by five promissory
notes of $50,000.00 each, maturing on different dates, executed by both
DALCO and the Dahican America Lumber Corporation, a foreign corporation
and a stockholder of DALCO,
As security for the payment of the abovementioned loans, on July 13, 1950
DALCO executed in favor of the BANK a deed of mortgage covering five
parcels of land situated in the province of Camarines Norte together with all
the buildings and other improvements existing thereon and all the personal
properties of the mortgagor located in its place of business in the
municipalities of Mambulao and Capalonga, Camarines Norte. On the same
date, DALCO executed a second mortgage on the same properties in favor of
ATLANTIC to secure payment of the unpaid balance of the sale price of the
lumber concession amounting to the sum of $450,000.00. Both deeds
contained a provision extending the mortgage lien to properties to be
subsequently acquired by the mortgagor.
Both mortgages were registered in the Office of the Register of Deeds of
Camarines Norte. In addition thereto DALCO and DAMCO pledged to the
BANK 7,296 shares of stock of DALCO and 9,286 shares of DAMCO to
secure the same obligation.
Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon
its maturity, the BANK paid the same to the Export-Import Bank of
Washington D.C., and the latter assigned to the former its credit and the first
mortgage securing it. Subsequently, the BANK gave DALCO and DAMCO
up to April 1, 1953 to pay the overdue promissory note.c
After July 13, 1950 - the date of execution of the mortgages mentioned above
- DALCO purchased various machineries, equipment, spare parts and supplies
in addition to, or in replacement of some of those already owned and used by
it on the date aforesaid. Pursuant to the provision of the mortgage deeds
quoted theretofore regarding "after acquired properties," the BANK requested
DALCO to submit complete lists of said properties but the latter failed to do
so. In connection with these purchases, there appeared in the books of
DALCO as due to Connell Bros. Company (Philippines) - a domestic
corporation who was acting as the general purchasing agent of DALCO -the
sum of P452,860.55 and to DAMCO, the sum of P2,151,678.34.chan

On December 16, 1952, the Board of Directors of DALCO, in a special
meeting called for the purpose, passed a resolution agreeing to rescind the
alleged sales of equipment, spare parts and supplies by CONNELL and
DAMCO to it.
On January 13, 1953, the BANK, in its own behalf and that of ATLANTIC,
demanded that said agreements be cancelled but CONNELL and DAMCO
refused to do so. As a result, on February 12, 1953; ATLANTIC and the
BANK, commenced foreclosure proceedings in the Court of First Instance of
Camarines Norte against DALCO and DAMCO.
Upon motion of the parties the Court, on September 30, 1953, issued an order
transferring the venue of the action to the Court of First Instance of Manila.
On August 30, 1958, upon motion of all the parties, the Court ordered the sale
of all the machineries, equipment and supplies of DALCO, and the same were
subsequently sold for a total consideration of P175,000.00 which was
deposited in court pending final determination of the action. By a similar
agreement one-half (P87,500.00) of this amount was considered as
representing the proceeds obtained from the sale of the "undebated properties"
(those not claimed by DAMCO and CONNELL), and the other half as
representing those obtained from the sale of the "after acquired properties".
ISSUE:
WON the "after acquired properties" were subject to the deeds of mortgage
mentioned heretofore. Assuming that they are subject thereto,
WON the mortgages are valid and binding on the properties aforesaid inspite
of the fact that they were not registered in accordance with the provisions of
the Chattel Mortgage Law.
HELD:
Under the fourth paragraph of both deeds of mortgage, it is crystal clear that
all property of every nature and description taken in exchange or replacement,
as well as all buildings, machineries, fixtures, tools, equipments, and other
property that the mortgagor may acquire, construct, install, attach; or use in, to
upon, or in connection with the premises - that is, its lumber concession -
"shall immediately be and become subject to the lien" of both mortgages in
the same manner and to the same extent as if already included therein at the
time of their execution. Such stipulation is neither unlawful nor immoral, its
obvious purpose being to maintain, to the extent allowed by circumstances,
the original value of the properties given as security.
Article 415 does not define real property but enumerates what are considered
as such, among them being machinery, receptacles, instruments or
replacements intended by owner of the tenement for an industry or works
which may be carried on in a building or on a piece of land, and shall tend
directly to meet the needs of the said industry or works. On the strength of the
above-quoted legal provisions, the lower court held that inasmuch as "the
chattels were placed in the real properties mortgaged to plaintiffs, they came
within the operation of Art. 415, paragraph 5 and Art. 2127 of the New Civil
Code". In the present case, the characterization of the "after acquired
properties" as real property was made not only by one but by both interested
parties. There is, therefore, more reason to hold that such consensus impresses
upon the properties the character determined by the parties who must now be
held in estoppel to question it.