Davao Sawmill Co. v. Castillo, 61 Phil. 709 Facts: Davao Saw Mill Co., Inc.

, a holder of a lumber concession, has operated sawmill in aland which it does not own. The company erected a building therein which housed the machinery used by it. In the lease contract between the sawmill company and the owner of the land,it has been agreed that after the lease period or in case the company should leave or abandon the land leased before the said period, ownership of all the improvements and buildings except machineries and accessories,made by the company shall pass to the owner of the land without any obligation on its part to pay any amount for said improvements and buildings. In another action, A writ of execution was issued against the company and the properties in question were levied upon. The company assailed the said writ contending that the machineries and accessories were personal in nature, hence, not subject to writ of execution. The trial judge ruled in favour of the company. Issue: Whether or not the subject properties are personal in nature. Held: The subject properties are personal in nature.Article 334, paragraph 5, of the [Old] Civil Code provides that real property consists of (5) Machinery, liquid containers, instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry. Machinery which is movable in nature only becomes immovable when placed in a land by the owner of the property or land but not when so placed by a tenant or any person having only a temporary right, unless such person acted as the agent of the owner. In the case at bar, the machinery is intended not by the owner of the land but by the saw mill company for use in connection with its trade. In this sense, the machinery is not a real property.

Lopez v. Orosa [G.R. Nos. L-10817-18. February 28, 1958.] En Banc, Felix (J): 10 concur. Facts: Enrique Lopez is doing business as Lopez-Castelo Sawmill. Vicente Orosa, Jr. invited him to invest in the theatre business of the latter (Plaza Theatre, Inc.). Lopez is unwillingness to invest in the business, however, he agreed to supply the lumber necessary for the construction of the proposed theatre at Orosa'sguarantee that the latter would be personally liable for any account that the said construction might incur. Lopez then delivered the lumber for the theatre.Lopez was partially paid. Orosa and BelarminoRustia, corporation president, promised Lopez to obtain a bank loan to satisfy the balance. Lopez found out later that the corporation already got a loan from the PNB with the Luzon Surety Company as surety, and the corporation in turn executed a mortgage on the land and building in favor of said company as counter-security. The mortgage was registered under the Torrens System. Subsequently, when the corporation applied for the registration of the land under Act 496, such mortgage was not revealed. Due to the demands of Lopez, Orosa issued a deed of assignment over his shares of stock in the corporation. As there was still an unpaid balance, Lopez instituted an action against Orosa and Plaza Theatre, asking them to be held solidarily liable. The lower Court held that Orosa and the Plaza Theatre, Inc., were jointly liable for the unpaid balance of the cost of lumber used in the construction of the building and the plaintiff thus acquired the materialman's lien over the same; the lien being merely confined to the building and did not extend to the land on which the construction was made. Plaintiff tried to secure a modification of the decision in so far as the lien did not extend to the land, but same was denied by order of the court. Issue: Whether or not the materialmens lien for the value of the materials used in the construction of the building attaches to said structure alone and doesnt extend to the land in which the building is adhered to. Held: 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, separate and distinct from the land, in the enumeration of what may constitute real properties could mean only one thing that a building is by itself an immovable property. In the absence of any specific provision of law to the contrary, a building is an immovable property, irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner. A close examination of Article 1923 (5) of the Civil Code reveals that the law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refection or work was made. This being so, the inevitable conclusion must be that the

lien so created attaches merely to the immovable property for the construction or repair of which the obligation was incurred. In the case at bar, the lien 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.