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SERGS PRODUCTS, INC. & Sergio Goquilay v. PCI Leasing and Finance, Inc.

G.R. No. 137705. August 22, 2000


The PCI Leasing and Finance, Inc. filed a complaint for sum of money, with an application for a writ of replevin. The
judge issued a writ of replevin directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after
5 days and upon the payment of the necessary expenses. The sheriff proceeded to the petitioner’s factory, seized one
machinery, with a word that he would return for other machineries. The Petitioner filed a motion for special protective
order to defer enforcement of the writ of replevin. The respondents opposed the motion on the ground that the properties
were still personal properties and therefore can still be subjected to seizure and writ of replevin. The petitioner asserted
that properties sought to be seized were immovable as defined under Article 415 of the Civil Code, but the sheriff was still
able to take possession of two more machineries. The appellate court in its decision on the original action for certiorari filed
by the petitioner, citing the agreement of the parties held that the subject machines were personal property. They had only
been leased, not owned by the petitioners; and ruled that the “words of the contract are clear and leave no doubt upon
the true intention of the contracting parties.”

Issue: Whether or not the machineries became a real property by virtue of immobilization.


The petitioners contented that the subject machines used in their factory were not proper subjects of the Writ
issued by the RTC because they were in fact real property. The Writ of Replevin under Rule 60 of the Rules of Court provides
that writs of replevin are issued for the recovery of personal property only. Under Article 415 (5) of the Civil Code provides
that machinery, receptacles instruments or implements intended by the owner of the tenement for an industry or works
which may be carried on in a building or a piece of land, and which tend directly to meet the needs of the said industry or
works. In the present case, the machines that were the subjects of the Writ of Seizure were placed by the petitioner in the
factory built on their own land. They were essential and principal elements of their chocolate-making industry. Hence,
although each of them was movable or personal property on its own, all of them were movable or personal property on its
own, all of them have become immobilized by destination because they are essential and principal elements in the industry.
However, contracting parties validly stipulate that a real property be considered personal after agreeing to such stipulation,
they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein. Section 12.1 of the agreement provides that the
property is and shall at all times be and remain, personal property notwithstanding that the property or any part thereof
may now be or hereafter become in any manner affixed or attached to or embedded in, or permanently resting upon, real
property or any building thereon, or attached in any manner to what is permanent therefore the court ruled that the
machines are personal property and they are proper subjects if the Writ of Replevin.