formal classification of property_object

8/11/2019 Formal Classification of Property_object

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2. With reference to the object: things that may be subject of property

rights

a. Corporeal

i. ImmoveablesNCC 415, 426

Art. 415, NCC. The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to the

soil;

(2) Trees, plants, and growing fruits, while they are attached to the land

or form an integral part of an immovable;

(3) Everything attached to an immovable in a fixed manner, in such a

way that it cannot be separated therefrom without breaking the

material or deterioration of the object;

(4) Statues, reliefs, paintings or other objects for use or ornamentation,

placed in buildings or on lands by the owner of the immovable in such

a manner that it reveals the intention to attach them permanently to

the tenements;

(5) 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 on a piece of land, and which tend directly to meet

the needs of the said industry or works;

(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding

places of similar nature, in case their owner has placed them or

preserves them with the intention to have them permanently attached

to the land, and forming a permanent part of it; the animals in these

places are included;

(7) Fertilizer actually used on a piece of land;

(8) Mines, quarries, and slag dumps, while the matter thereof forms part

of the bed, and waters either running or stagnant;

(9) Docks and structures which, though floating, are intended by their

nature and object to remain at a fixed place on a river, lake, or coast;


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(10) Contracts for

public works, and servitudes and other real rights over immovable

property. (334a)

Classes of Immovables

1. Immovables by naturecannot be moved from place to place, such

as land mentioned in paragraph 1, and mines, quarries, and slag

dumps mentioned in paragraph 8

2. Immovables by incorporationessentially movables, but are

attached to an immovable in such manner as to be an integral part

thereof, such as things (except land, buildings, and roads) mentioned

in paragraphs 1, 2, 3, 4 and 6

3. Immovables by destinationessentially movables, but by the

purpose for which they have been placed in an immovable, partake of

the nature of the latter because of the added utility derived therefrom,

such as those mentioned in paragraphs 4, 5, 6, 7 and 9

4. Immovables by analogy or by law such as those mentioned in

paragraph 10

Paragraph 1 Immovables by Nature

o Separate treatment by parties of a building from the land on which it

stands, does not change the immovable character of the building,

which by itself can be the subject of real estate mortgage

Buildings on Rented Land


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o Buildings or constructions placed on land by a lessee do not become

immovable, where the lease agreement gives the lessee the right to

remove the buildings and improvements at the end of the lease

o Tolentino: buildings being immovable by nature, ownership of the

land on which they are erected cannot change their nature

o Mere fact that building was a subject of a chattel mortgage and was

considered as personal property does not make building personal

property

Where Materials Sold

o Where a building is sold to be demolished immediately, sale involved

movable property

Constructions

o Whatever materials used in the construction, it will be immovable,

provided that it is not of such provisional character, without fixed or

integral adherence to the soil, that it can be easily removed or

destroyed independently of the tenement on which it stands

o To be immovable must be attached permanently to the land (it

becomes immovable by incorporation)

Paragraph 2

Immovables by Incorporation

o Trees and plants are immovable only when attached to the land

o When they have been uprooted, they become movable

Ungathered fruits

o When land is being leased by another, fruits belong to the tenant

some consider fruits as movables


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o SC: ungathered products have the nature of personal property for

purposes of attachment and execution, and for the Chattel Mortgage

Law

Paragraph 3

Immovables by Incorporation

o Rex vinta

o The material fact of incorporation or separation is what determines

the condition of these objects; so that as soon as they are separated

from the tenement, they recover their condition as movables,

irrespective of intention of owner

Paragraph 4 Immovables both by Incorporation and Destination

o They can generally be separated from the immovable without

breaking the object

o Objects must be placed in the immovable by the owner of the latter

Immobilization by owner

o Objects mentioned in pars. 4 and 5 become immobilized only when

placed in the tenement by the owner of such tenement

o When placed by a mere holder, such as a tenant, a usufructuary, or

one with temporary right over the immovable, these objects do not

become immovable property, unless such person acts as an agent of

the owner

Paragraph 5 Immovables by Destination

o Immovable condition depends upon their being destined for use in

the industry or work in the tenement

o The moment they are separated, not necessarily from the immovable,

but from the industry or work in which they are utilized, they recover

their condition as movables

o The immobilization can be made only by the owner of the tenement


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bonds, jewelry, scientific or artistic collections, books, medals, arms,

clothing, horses or carriages and their accessories, grains, liquids and

merchandise, or other things which do not have as their principal object

the furnishing or ornamenting of a building, except where from the

context of the law, or the individual declaration, the contrary clearly

appears. (346a)

Berkenkotter v. Cu Unjieng (1935)

Facts:

1. Mabalacat Sugar Co., Inc. owner of sugar central situated in

Mabalacat Pampanga

2. The company obtained a loan from Cu Unjieng secured by a first

mortgage constituted on two parcels of land with all its buildings,

improvements, sugar-cane mill, steel railway, telephone line,

apparatus, utensils and whatever forms part or is a necessary

complement of said sugar-cane mill, steel railway, telephone line,

now existing or that may in the future exist in said lots

3. After mortgage was constituted, Mabalacat Sugar Co. decided to

increase the capacity of its sugar central by buying additional

machinery and equipment (150 tons to 250) estimated cost:

P100,000

4. To carry out this plan, B.A. Green (president of Mabalacat) proposed

to plaintiff, B.H. Berkenkotter, to advance the necessary amount for


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the purchase of said machinery, promising to reimburse him as soon

as he could obtain an additional loan from Cu Unjieng

5. Berkenkotter advanced purchase money (P25,750 as loan; P22,000

credit against corp. for unpaid salary) and Mabalacat then purchased

additional machinery now in litigation

6. B.A. Green then applied to Cu Unjieng for an additional loan

(P75,000) offering as security the additional machinery recently

purchased

7. Cu Unjieng rejected application. They claim that the additional

machinery installed was already subject to the first mortgage

constituted

8. Mabalacat contends: installation of machinery was not permanent in

character because in the event that B.A. Green fails to obtain loan,

ownership of machinery will be transferred to Berkenkotter; hence, it

is not his, and cannot be subject to the first mortgage he constituted

Issue:

WON additional machinery and equipment, as improvement incorporated

with the sugar central, are subject to the mortgage deed executed in

favor of Cu Unjieng e Hijos

Held: YES

o Art. 1877. A mortgage includes all natural accessions, improvements,

growing fruits and rents not collected when obligation falls due, and

the amount of indemnities paid or due the owner by insurers of the

mortgaged property or by virtue of the exercise of the power of

eminent domain, with the declarations, amplifications, and limitations,

established by law, whether estate continues in possession of the

person who mortgaged it or whether it passes into the hands of a

third person.

o Bischoff v. Pomar


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- In a mortgage of real estate, the improvements on the same are

included; therefore, all objects permanently attached to a

mortgaged building or land, although they may have been placed

there after the mortgage was constituted, are also included

- In order for such improvements be excluded, there must be an

express stipulation that the same are excluded

o Additional machinery and equipment is owned by Mabalacat Sugar

Co.

- Upon acquiring said machinery and equipment with money

obtained as loan from Berkenkotter, Mabalacat Sugar Co. became

owner of machinery and equipment

- B.A. Green could not have offered them to the plaintiff as security

for the payment of his credit if machinery was not his

o Art. 334 (5), CC: gives the character of real property to machinery,

xxx, intended by the owner of any building or land for use in

connection with any industry being carried on therein and which are

expressly adapted to meet the requirements of such industry

- Hence, installation of machinery in question converted them into

real property by reason of their purpose (increase production)

- As such, it cannot be said that their incorporation therewith was not

permanent in character because, as essential and principal

elements of a sugar central, without them the sugar central would

be unable to function or carry on the industrial purpose for which it

was established

o As to the alleged sale of said machinery to Berkenkotter, only the

right of redemption of Mabalacat Sugar Co. in the sugar central with

which said machinery had been incorporated, was transferred

thereby, subject to the right of Cu Unjieng under the first mortgage

- The offering of the machinery as security for loan obtained from

Berkenkotter, and the promise to refrain from mortgaging them


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does not alter the permanent incorporation of said machinery

with the central

Philippine Refining Co. v. Jarque (1935)

Facts:

1. Philippine Refining Co. (PRC) and Francisco Jarque executed three

mortgages on the motor vessels Pandan and Zaragosa

2. Documents were recorded in the record of transfers and

encumbrances of vessels for the port of Cebu and each was

denominated Chattel Mortgage

3. Mortgages:

o FIRST and SECOND MORTGAGE did not have any affidavit

of good faith appended to it

o THIRD MORTGAGE contained such affidavit but was not

registered in the customs house

4. A FOURTH MORTGAGE was executed by Jarque and Ramon

Aboitiz on the motorship Zaragosa

5. Insolvency proceedings against Jarque was instituted

6. Petition was granted and Jarque was declared an insolvent debtor

resulting to the assignment of all his properties to Jose Corominas

7. THIRD MORTGAGE was registered in the customs house 30 days

prior to the commencement of insolvency proceedings

8. FOURTH MORTGAGE was entered in the chattel mortgage registry

also within the 30-day period prior insolvency proceedings


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9. Judge Hontiveros declined to order the foreclosure of the aforesaid

mortgages and sustained special defenses of fatal defectiveness of

the mortgages

Issue: WON mortgages were validly constituted

Held: No.

o Vessels are considered as a peculiar kind of personal property

o Although they are subject to the provisions of the Chattel Mortgage

Law, the requirements for it to be a validly constituted chattel

mortgage is different from that of a chattel mortgage of other

personalty

o A chattel mortgage of a vessel does not need to be noted in the

register of the registry of deeds but is required that a record of

documents affecting the title to a vessel be entered in the record of

the Collector of Customs at the port of entry

o An affidavit of good faith appended to the mortgage is required

o Absence of these vitiates a mortgage as against creditors and

subsequent encumbrancers; unenforceable against third persons

o FIRST and SECOND mortgage no affidavit, hence not valid

o THIRD mortgage not registered in Collector of Customs, hence not

valid

o FOURTH mortgage registered in Chattel mortgage registry but this

was not required; no affidavit, not registered in Collector of Customs,

hence not valid


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Mindanao Bus Co. v. City Assessor (1962)

Facts:

1. Mindanao Bus Companys (MBC) is a public utility solely engaged in

transporting passengers and cargoes by motor trucks

2. MBCs maintenance and repair equipment were assessed realty tax

at P4,400

3. Said maintenance and repair equipment are sitting on cement or

wooden platforms; MBC is also the owner of the land upon which its

garage for motor trucks, a repair shop, blacksmith and carpentry

shops.

4. With the machineries placed therein, the trucks are constructed and

repaired

5. Said machineries have never been used as industrial equipment to

produce finished products for sale, nor to repair machineries, parts,

and the like, offered to the general public for business for which MBC

has never engaged in

6. MBC appealed assessment to the Board of Tax Appeals: the same

are not realty

7. Board of Tax appeals sustained city assessors assessment

8. MBC filed with CTA a petition for the review of the assessment

9. CTA sustained

Pieces of equipment and machineries are immovable taxable

real properties

Said pieces of equipment and machineries, the movable, are

immobilized by destination, in accordance with par. 5, Art. 415

NCC

They are taxable realties, by reasonof their being intended or

destined for use in an industry


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10. MR denied

11. Hence, present petition

Issue: WON maintenance and repair equipment are real properties

subject to realty tax

Held: No.

o Art. 344 (Now 415) par. 5, gives the character of real property to

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 or industry

o Art. 415 (5) Machinery, xxx intended by the owner for an industry

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 works

o First Element: Essentiality

- Movable equipment must first be ESSENTIAL AND PRINCIPAL

ELEMENTS of an industry without which such industry or works

would be unable to function or carry on the industrial purpose for

which it was established.

- If movable equipment is merely incidental to the industry, then it

cannot be given the character of real property

E.g. cash registers, typewriters found in hotels restaurants,

theaters, etc. are merely incidentals and are not considered

immobilized by destination because the business can carry on

without these pieces of equipment

On the other hand, machineries of breweries used in the

manufacture of liquor and soft drinks, though movable in

nature, are immobilized because they are essential to said

industries; but delivery trucks and adding machines are merely

incidentals and retain their movable nature


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- Maintenance and repair equipment are not essential and

principal elementsof MBCs business of transporting passengers

and cargoes by motor trucks

- They are merely incidentals used only for expediency to

facilitate or improve its service

- Even without such equipment, business may be carried on, and

the repair of MBCs trucks may be done in a repair shop belonging

to another

o Second Element: Industry or works be carried on in a building or on a

piece of land

- MBCs transportation business is not carried on in a building or

permanently on a piece of land

o Equipment may not be considered real estate within the meaning of

Art. 415 (5), CC.

Davao Sawmill v. Castillo and Davao Light & Power Co. (1935)

Facts:

1. Davao Saw Mill Co. Inc. (DSM) holder of lumber concession

from the govt.

2. The land upon which the business was conducted belonged to

another person

3. Contract of Lease:


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Issue: WON machineries in question are immobilized and ceased to

become personal property of DSM despite it being installed on a plant

not owned by DSM

Held: No. Machineries were not immobilized by reason of destination

because the land on which the machineries were installed did not belong

to DSM.

o Similar question arose in Puerto Rico (Valdes v. Altagracia):

machinery which is movable in its nature only becomes immobilized

when placed in a plant by the owner of the property or plant, but not

when so placed by a tenant, usufructuary, or any person having only

temporary right. Unless such person acted as agent of owner

o Following Code Napoleon: Porto Rican Code treats as immovable

property, not only land and buildings, but also attributes immovability

to property movable in nature, because of the destination to which it

is applied

o But said property only becomes immobilized when placed in a plant

by the owner of the property or plant.

o This is because of the fact that a person, having only a temporary

right to the possession or enjoyment of property is not presumed by

the law to have installed movable property belonging to him on

property not belonging to him for the purpose of immobilizing such

and depriving of himself of ownership thereof

o Machineries levied upon did not lose its character of movable

property and become immovable by destination

o Machineries can only be immobilized if DSM acted as an agent of the

lessor and the objects become immovable from the act of the owner

in giving by contract a permanent destination to them (Valdez v.

Central Altagracia:)


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mortgagors is issued, mortgagors authorize the Register of Deeds to

hold the registration of the same until the mortgage is cancelled.

3. Mortgagors secured an additional loan from Prudential Bank

(P20,000)

o To secure payment, another deed of Real Estate Mortgage was

executed, over the same properties previously mortgaged

4. Sec. of Agriculture issued Miscellaneous Sales Patent over the parcel

of land, possessory rights over which were mortgaged o Prudential

Bank

5. Property was subsequently registered and a title was issued in the

name of Fernando Magcale (in violation of the rider stipulations)

6. Mortgagors failed to pay their obligation and the deeds of Real Estate

Mortgage were extrajudicially foreclosed

7. Property was auctioned, and acquired by Prudential Bank as highest

bidder

8. Spouses Magcale filed complaint assailing the sale before CFI of

Zambales

9. CFI: declared the deeds of Real Estate Mortgage null and void; held

that a mortgage cannot be constituted on the building erected on land

belonging to another; hence, foreclosure sale was likewise invalid

10. Prudential Bank filed MR denied

11. Hence, instant petition.

Issue: WON a valid real estate mortgage can be constituted on the

building erected on the land belonging to another

Held: Yes

o The inclusion of the word building separate and distinct from land

under Art. 415 CC, can only mean that a building is by itself an

immovable property


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o While it is true that a mortgage of land necessarily includes, in the

absence of contrary stipulation, improvements thereon; a building

may still be mortgaged apart from the land on which it has been built

o Such mortgage would still be a real estate mortgage for the building

would still be considered immovable property even if dealt with

separately

o Vda. De Bautista v. Marcos: Court has established that possessory

rights over lands before title is vested on the grantee, may be validly

transferred or conveyed as in a deed of mortgage

o First mortgagewas executed (Nov. 19, 1971) before the issuance of

final patent (May 15, 1972) and before government was divested of

its title to the land

o First Mortgage is a valid mortgage

o Proscriptions under Secs. 121, 122, 124 of CA 141, Public Land Act

have no application to the assailed mortgage which was executed

prior to the enactment of CA 141

- Sec. 121: No corporation, xxx may acquire or have any right

whatsoever to any land granted under the free patent, homestead,

or individual sale

- Sec. 122: No land, xxx nor any permanent improvement on such

land, shall be encumbered, alienated or transferred, except to

persons, corporations qualified to acquire lands of public domain

- Sec. 124: any prohibited encumbrance or alienation is null and

void and shall annul the grant and cause the reversion of property

and its improvements to the State

o RA 730, Sec. 2 has no application as well as proscription expressly

refers to encumbrance or alienation on the LAND ITSELF and does

not mention anything regarding improvements existing thereon

- Sec. 2: proscribes the encumbrance and alienation of lands

acquired under provisions of said Act, before the patent is issued

and for a term of ten years from the date of issuance


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o Second Mortgageexecuted after issuance of sales patent and

original certificate of title falls squarely under prohibitions stated in

Sec. 121, 122, 124 CA 141; and Sec. 2 of RA 730, and is therefore

NULL AND VOID

o Second Mortgage cannot be made valid by estoppel

- Prudential Bank was contending that Spouses Magcale

voluntarily surrendered title to the bank in 1977 in order that the

mortgage be annotated without requiring the bank to get prior

approval from Ministry of Natural Resources

- Validity cannot be given by estoppel if it is prohibited by law or is

against public policy

o First mortgage valid, Second mortgage null and void; without

prejudice to whatever steps the Government may take for the

reversion of the land in its favor.

Caltex v. Central Board of Assessment Appeals (1982)

Facts:

1. Caltex loans machines and equipment to gas station operators under

a lease agreement

2. Machines and equipment consist of underground tanks, elevated

tank, elevated water tanks, water tanks, gasoline pumps, computing

pumps, water pumps, car washer, car hoists, truck hoists, air

compressors, and tireflators

3. Under the lease contract, operators, upon demand, shall return to

Caltex the machines and equipment, in good condition as when

received, ordinary wear and tear excepted; lessor of the land where

gas station is located, does not become the owner of the machines

and equipment installed therein; Caltex retains ownership

4. The City Assessor of Pasay City characterized the said machines

and equipment and assessed the same as taxable realty

5. Realty tax on said equipment amounts to P4,541.10 annually


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intended to enhance its value, beauty or utility or to adapt it for

new or further purposes

m) Machineryshall embrace machines, mechanical

contrivances, instruments, appliances and apparatus attached

to the real estate. It includes the physical facilities available for

production, as well as the installations and appurtenant service

facilities, together with all other equipment designed for or

essential to its manufacturing, industrial or agricultural

purposes

o The said machinery and equipment, as appurtenances to the gas

station building or shed owned by Caltex (as to which it is subject to

realty tax) and which fixtures are necessary to the operation of the

gas station, for without them the gas station would be useless, and

which have been attached permanently to the gas station site or

embedded therein, are taxable improvements and machinery within

the meaning of the Assessment Law and the Real Property Tax Code

o Caltex: invokes Davao Saw Mill Co. v. Castillo ruling machinery

which is movable in its nature only becomes immobilized when

placed in a plant by the owner of the property or plant, but not when

so placed by a tenant

o SC: ruling is an interpretation of par. 5, Art. 415 regarding movable

machinery that becomes real property by designation. In said case,

machinery were treated as personalty because it was installed by one

not an owner of the land

- Not applicable as the case involves equipment and machinery

permanently affixed by Caltex to its own gas stations and

pavement

- These are indubitable taxable realty

o The building or shed, the elevated water tank, the car hoist under a

separate shed, the air compressor, the underground gasoline tank,

neon lights signboard, concrete fence and pavement and the lot


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where they are placed or erectedall of which are used in pursuance

of the gasoline service station business and formed the entire

gasoline service station

o The subject properties were attached to the tenement, that is, the

pavement covering the entire lot which was constructed by Caltex,

the owner of the gasoline station and the improvement which holds

all the properties in question

o Moreover, improvements on land are commonly taxed as realty even

though for some purposes they might be considered personalty

- It is a familiar phenomenon to see things classed as real property

for purposes of taxation which on general principle might be

considered personalty

Benguet Corp. v. CBAA (1993)

Facts:

1. 1985 - Provincial Assessor of Zambales assessed Benguet Corp.s

tailings dam and the land thereunder as taxable improvements

(P11M)

2. Benguet Corp. appealed to the Board of Assessment Appeals

dismissed for failure of Benguet Corp. to pay realty taxes that fell due

during pendency of appeal

3. Benguet Corp. elevated matter to Central Board of Assessment

Appeals Declared the tailings dam and the lands submerged

thereunder were subject to realty tax

o For purposes of taxation, the dam is considered as real property

as it comes within the object mentioned in pars. (a) & (b) of Art.

415 NCC

o It is a construction adhered to the soil which cannot be separated

without breaking the material or causing destruction on the land

upon which it is attached


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o The immovable nature of the dam as an improvement determines

its character as real property, hence taxable under Sec. 38 of

Real Property Tax Code

4. Benguet Corp. filed petition for certiorari seeking for a reversal of the

above ruling

5. Benguet Corp.s contention:

o Tailings dam is not subject to realty tax as it is not an

improvement upon the land within the meaning of the Real

Property Tax Code

o Tailings dam has no value separate and independent of the mine

hence by itself cannot be considered an improvement separately

assessable

o It is an integral part of the mine

o At the end of the mining operation, tailings dam will benefit the

local community by serving as an irrigation facility

o As regards the valuation of the tailings dam, it should be based on

its incidental use as a water reservoir and not on the alleged cost

of construction of the dam and the annual build-up expense

o As regards Benguet Corp.s liability for penalties for non-

declaration of the tailings dam and the submerged lands for realty

tax purposes: no penalty shall be collected because the tax was

not paid in honest belief that it is not due

o Also, no other mining companies in the Phils. operating a tailings

dam have been made to declare the dam for realty tax purposes

o Benguet Corp. does not dispute that tailings dam may be

considered realty within the meaning of Art. 415. It only insists

that it cannot be separately assessed because it is an integral part

of the mine

o Cited jurisprudence


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1. Municipality of Cotabato v. Santos: dikes and gates

constructed in connection with a fishpond operation not taxed

separately for being integral parts of the fishpond

2. Bislig Bay Lumber Co. v. Provincial Government of Surigao: A

road constructed by the timber concessionaire was not

separately taxed [not because the road was integral part of

the lumber concession, but because the government had the

right to use the road to promote its varied activities]

3. Kendrick v. Twin Lakes Reservoir Co.:reservoir dam formed

part of the reservoir hence not separately taxable

4. Ontario Silver Mining Co. v. Hixon: drain tunnels constructed

by mining company not taxed separately as it is an integral

part of the mine itself

6. SolGen: tailings dam is an assessable improvement because it

enhances the value and utility of the mine

o Primary function of the dam is to receive, retain and hold the

water coming from the operations of the mine, and it also enables

Benguet Corp. to impound water, which is then recycled for use in

the plant

o Cited Jurisprudence

1. Caltex v. CBAA: equipment and machinery are taxable

improvements as they were necessary to the operation of the

gas station

2. Manila Electric Co. v. CBAA: while two storage tanks are not

embedded in the land, they may be considered as

improvements on the land, enhancing its utility and rendering

it useful to the oil industry

3. Meralco Securities Industrial Corp. v. CBAA: pipeline system,

construction adhering to the soil, was considered a taxable

improvement


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4. Flax-Pond Water Co. v. City of Lynn: dam was separately

taxed

5. Standard Oil Co. v. Atlantic City: oil tanks designed and used

as permanent improvement are properly assessed as

improvements

Issue:

WON tailings dam are taxable improvements

Held: Yes

o Real Property Tax Code does not provide definition or real property

- Simply states that realty tax is imposed on the real property, such

as lands, buildings, machinery and other improvements affixed or

attached to real property

- In the absence of such a definition, Art. 415 CC should be applied

o Art. 415. The following are immovable property

- (1) Lands, buildings and constructions of all kinds adhered to the

soil

- (3) Everything attached to an immovable in a fixed manner, in

such a way that it could not be separated therefrom without

breaking the material or deterioration of the object

o Sec. 2 of CA 470, Assessment Law realty tax is due on the real

property, including land, buildings, machinery and other

improvements not specifically exempted in Sec. 3

- Tailings dam not one of the exceptions

o Tailings dam is an improvement within the meaning of Sec. 3(k) of

the Real Property Tax Code

o (k) is a valuable addition made to property or an amelioration in its

condition, amounting to more than mere repairs or replacement of

waste, costing labor or capital and intended to enhance its value,

beauty or utility or to adapt it for new or further purposes


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o Improvement has also been interpreted as artificial alterations of

the physical condition of the ground that are reasonably

permanent in character

o Tailing dam cannot be taxed separately if the mine could not be

operated without it and making said dam an integral part of the mine

o In this case, tailings dam was a mere improvement and has

value separate in distinct from the mine hence by itself is

considered an improvement separately taxable

- Benguet Corp.s mining operation, even without the tailings dam,

can still be carried out because the primary function of the dam is

merely to receive and retain wastes and water coming from the

mine

- No allegation that water coming from dam is the sole source of

water for the mining operation so as to make it an integral part of

the mine

- Even if mine is shut down, the dam may still be used for irrigation

of the surrounding areas, as admitted by the corp.

- Kendrick ruling not applicable because in the present case, the

tailings dam was being used exclusively for the benefit of Benguet

Corp.

- While Benguet Corp. vidorously argues that tailings dam has no

separate existence, it inconsistently contends that at the end of

the mining operation, tailings dam will serve as irrigation facility of

local community admission that tailings dam indeed can exist

independently of the mine and not an integral part thereof

o Whether a structure constitutes an improvement so as to

partake of the status of realty would depend upon the degree of

permanence intended in its construction and use

- Permanent does not imply that improvement must be used

perpetually but only until purpose to which principal realty is

devoted has been accomplished


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- It is sufficient that improvement is intended to remain as long as

the lands to which it is annexed is still used for the said purpose

o Tailings dam falls within the definition of an improvement because it

is permanent in character and enhances both the value and utility of

Benguet Corp.s mine

o The immovable nature of the dam defines its character as real

property under Art. 415 CC and thus makes it taxable under Sec. 38

Real Property Tax Code

Tumalad v. Vicencio (1971)

Facts:

1. Alberta Vicencio and Emiliano Simeon secured a loan from Tumalad

(P4,800) and a Chattel Mortgage was executed to secure its payment

2. Property mortgage is a house of strong materials located in Quezon

Blvd, Quiapo Manila which was being rented from Madrigal &

Company Inc.

3. Parties agreed that Chattel Mortgage will be enforceable in

accordance with provisions of Special Act No. 3135 sheriff is

empowered to sell mortgagors property

4. Mortgagors defaulted in paying; mortgage extrajudicially foreclosed

5. House was sold at public auction to highest bidder, mortgagees

6. Mortgagees commenced civil case for ejectment in MTC of Manila,

praying that the house be vacated and its possession surrendered to

them; mortgagors to pay rent of P200 monthly from date of sale (Mar.

27, 1956) up to time possession is surrendered


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7. Municipal Court ruled in favor of mortgagees and ordered

mortgagors to vacate premises and to pay monthly rent of P200 (from

March 27, 1956 until such time that the premises has been

completely vacated)

8. Mortgagors appealed to CFI

9. Contentions:

o Municipal Court did not have jurisdiction because the issue

involved is ownership (hence, CFI) and there was no allegation of

prior possession

o There was failure to prove prior demand to vacate before filing of

ejectment suit pursuant to Sec. 2 Rule 72 ROC

10. Mortgagees filed motion for execution

11. During pendency of the appeal, mortgagors failed to deposit the rent

as ordered in the decision of MTC. As a result, CFI granted motion

for execution

12. However, judgment regarding surrender of possession could not be

executed because house was demolished pursuant to order in an

ejectment case filed by lessor of land against herein mortgagors

13. Mortgagors appealed to CA affirmed decision of CFI

14. Hence, present petition

15.Mortgagors contentions:

o They question the jurisdiction of MTC and consequently, the

appellate jurisdiction of CFI on the theory that the CHATTEL

MORTGAGE is void ab initio hence the extrajudicial foreclosure

and auction sale were also void

- Signatures on chattel mortgage were obtained through fraud,

deceit, or trickery

- Subject matter of the mortgage is a house and being an

immovable, it can only be subject of real estate mortgage


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o Foreclosure sale being void, ownership of the house still remained

with them who are entitled to possession

o The issue of ownership will have to be adjudicated first in order to

determine possession

o Hence, it is the CFI which has jurisdiction over the matter

o They cannot be made to pay for rentals within 1 year period

provided by law for redemption of extrajudicially foreclosed

property

Issues:

1. WON MTC had jurisdiction over the case (YES)

2. WON the chattel mortgage was void as signatures were obtained

through fraud, deceit, or trickery (NO)

3. WON chattel mortgage was void ab initio because only personal

properties can be subject of a chattel mortgage (NO)

4. WON mortgagors are legally bound to pay rentals to the

mortgagees during period of 1 year provided by law for the

redemption of extrajudicially foreclosed house (NO)

Held:

1. Yes, MTC has jurisdiction.

o When question to be determined is one of title, the court is given

authority to proceed with the hearing of the cause until this fact is

clearly established

o In detainer cases, the claim of ownership is a matter of defense

and raises an issue of fact that should be determined from

evidence at the trial

o What determines jurisdiction are the allegations in the complaint

and the relief asked for

1. No, the chattel mortgage remains valid.


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o Contentions were not supported by evidence

o Even granting that the charge is true, fraud or deceit does not

render a contract void ab initio, and can only be a ground for

rendering a contract voidable, hence valid until annulled

o Records does not show that the mortgage was annulled

2. No. Parties to a contract may, by agreement, treat real property

as personal property

o Parties to chattel mortgage may agree to consider a house as

personal property for the purposes of said contract, but the same

is only good insofar as the contracting parties are concerned

o Jurisprudence:

- Manarang v. Odiladaparties to a contract may, by

agreement, treat as real property as personal property

- Standard Oil v. Jaramillomortgagor conveyed to the

mortgagee personal property consisting of leasehold rights

and a building

- Luna v. Encarnacionsubject of contract designated as

Chattel Mortgage was a house and the court held that it was

valid because it was so expressly designated and specifically

that the property given as security is a house

- Navarro v. Pinedathe view that parties to a deed of chattel

mortgage may agree to treat real property as personal

property is good only insofar as contracting parties are

concerned

Based on principle of estoppel

- Evangelista v. Abadmortgaged house built on rented land

was held to be personal property, not only because deed of

mortgage considered it as such, but also because it did not

form part of the land; an object placed on a rented land does

not become immobilized by attachment

o Mortgagors are estopped


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o Although there is no specific statement referring to the subject

house as personal property, yet by ceding, selling or transferring

a property by way of chattel mortgage defendants-appellants

could only have meant to convey the house as chattel, or at

least, intended to treat the same as such, so that they should not

now be allowed to make an inconsistent stand by claiming

otherwise."

o Moreover, subject house stood on a rented lot to which herein

mortgagors merely had a temporary right as lessees (although

not conclusively, it can be said that the mortgagors intended to

treat the house as personalty)

4. No. They are not liable to pay rent within 1 year redemption

period

o Sec. 6 of Special Act 31351 year redemption period

o Sec. 7allows purchase to obtain possession during

redemption, but a petition and the furnishing of a bond are

prerequisites

o Purchaser cannot claim possession during period of redemption

as a matter of right

o Thus, possession remains with mortgagors

o While ROC allows purchaser to receive rentals if occupied by

tenants, former is still accountable to the judgment-debtor for the

amount received and the same is credited against redemption

price

o Rentals receivable from tenants, although they may be collected

by purchaser during redemption period, do not belong to the

latter but still pertain to the mortgagor

o Since mortgagors were occupying the house at the time of

auction sale, they are entitled to remain in possession during

period of redemption and to collect the rents or profits during said

period


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SergsProducts v. PCI Leasing (2000)

Facts:

1. PCI Leasing and Finance, Inc. (PCI) filed with RTC complaint for a

sum of money with an application for a writ of replevin

2. A writ of replevin was issued directing sheriff to seize and deliver the

machineries and equipment to PCI after 5 days

3. Sheriff proceeded to Sergs Productss factory and seized one

machinery

4. Sergs filed motion for special protective order to enjoin sheriff from

enforcing the writ

5. Sergs:

o Properties were immovable as defined by Art. 415 CC, the parties

agreement to the contrary notwithstanding; hence, it cannot be a

proper subject of a writ of replevin

o It would be prejudicial to innocent third parties if their contract,

stipulating that machinery is personalty, would be given effect

o PCI was estopped from treating machineries personal as the

contract between them was totally sham

6. Sheriff sought to enforce writ and was able to take two more

7. Sergs elevated matter to CA

8. CA machineries were personal property and that they and only

been leased, not owned; words of contract are clear and leave no

doubt upon the true intention of the contracting parties

9. Hence, this petition


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Issues:

1. WON machineries are personal property which can be proper

subjects of Writ of Replevin

2. WON contract between parties is a loan or a lease

Held:

1. Yes

o Rule 60 Sec. 5 ROC: writs of replevin are issued for the recovery

or personal property alleged to be wrongfully detained

o On the other hand, Art. 415 CC provides that the following are

immovable property

- (5) 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 on a piece of land, and which

tend directly to meet the needs of the said industry or works

o Machineries were placed by Sergs in the factory built on their

own land

- They were essential elements of their chocolate-making industry

- Hence, although each of them was movable on its own, all of

them have become immobilized by destination because they

are essential and principal elements in the industry

- They are real property, pursuant to Art. 415

o However, they can still be proper subjects of the Writ of Seizure

o Court has held that contracting parties may validly stipulate that a

real property be considered personal

o After agreeing to such stipulation, parties estopped from claiming

otherwise

o Lease agreement clearly provides that the machines are to be

considered personal property notwithstanding its permanent

attachment to real property or any building thereon


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o The holding that it is personal property, is good only as to the

contracting parties third persons acting in good faith not bound

2. Contract is Lease

o Sergs contend that agreement is a loan and not a lease, and

hence belonged to them. As such, they cannot be said to be

unlawfully detaining said machineries

-Agreement suffers from intrinsic ambiguity which places serious

doubt in the intention of parties and validity of lease agreement

itself

o This issue should be resolved in the civil action pending before

the RTC and not in the proceedings involving issuance of Writ of

Seizure

o Court may rely on Lease Agreement nothing on record shows

that it had been nullified or annulled; presumed valid and binding

o Should have instead filed a counter-bond for the return of

machinery (double the value of machinery Sec. 5 Rule 60 ROC

ii. MovablesNCC 416-418, 426

Art. 416, NCC. The following things are deemed to be personal property:

(1) Those movables susceptible of appropriation which are not included

in the preceding article;

(2) Real property which by any special provision of law is considered as

personalty;


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(3) Forces of nature which are brought under control by science; and

(4) In general, all things which can be transported from place to place

without impairment of the real property to which they are fixed. (335a)

General Test of Movable Character:

1. Whether it can be carried from place to place

2. Whether the change of location can be effected without injury to an

immovable to which the object may be attached

3. Whether the object is not included in any of the ten paragraphs of Art.

415

By Special Provision:

o Act No. 1508, Chattel Mortgage Law

- Recognizes growing crops as personalty

- if growing crops are mortgaged, mortgage may contain an

agreement stipulating that the mortgagor binds himself to

properly tend, care for and protect the crop while growing

o Ungathered products as personalty

- There is a mobilization in anticipation, a gathering as it were in

advance, rendering the crop movable

Forces of Nature

- Electricity, gas, heat, oxygen, light, rays, etc.

- On electricity as subject of larceny: Test is not whether the

subject is corporeal or incorporeal, but whether it is capable of

appropriation by another than the owner

Semi-movables

- Now classified as movables

- All those which are susceptible of moving by themselves without

assistance from any outside force, such as animals


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Intellectual Property

- Right of the author, artist, or inventor over his work is personal

property

- It consists in the pecuniary benefit which the owner can get by

the reproduction or manufacture of his work

- It is a monopoly of exploitation

Art. 417, NCC. The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or

demandable sums; and

(2) Shares of stock of agricultural, commercial and industrial entities,

although they may have real estate. (336a)

Obligations

- All kinds of credits

-Includes bonds

Intangible Objects

- Credits which have for their prestation an act or an abstention

- Enumeration of real property is exclusive; all not included are

personal

Demandable Sums

- Demandable is erroneously used

- Whether credit is matured or not, it is personal property

Shares in Juridical Persons

- All juridical persons must be deemed included


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2. They tampered with gas equipment installed for the use of another

tenant in their building

3. Tambunting appealed his conviction

Issue:

1. WON gas can be the subject of larceny

2. WON quantity of has been established with sufficient certainty to

enable the court to fix appropriate penalty

Held:

1. Yes

o [page 34, Vol. 17, of Ruling Case Law]There is nothing in the

nature of gas used for illuminating purposes which renders it

incapable of being feloniously taken and carried away. It is a

valuable article of merchandise, bought and sold like other

personal property, susceptible of being severed from a mass or a

larger quantity and of being transported from place to place.

o Likewise, water which is confined in pipes and electricity which is

conveyed by wires are subjects of larceny

2. Proof not satisfactory, but TC was justified in fixing value of gas at P2

per month, which is the minimum charged by gas company, however

small amount consumed

3. Unsuccessful prosecution of accused for an infraction of Sec. 504 of

Revised Ordinances of the City of Manila charging the accused for

placing a gas installation without being a registered installer of gas

Not a bar to subsequent prosecution; two offenses are distinct


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b. Non-corporeal

i. Intellectual propertyNCC 721-724; RA 8293 (Intellectual

Property Code) Secs. 4.1, 22, 112, 172-173, 177

Article 721. By intellectual creation, the following persons acquire

ownership:

(1) The author with regard to his literary, dramatic, historical, legal,

philosophical, scientific or other work;

(2) The composer; as to his musical composition;

(3) The painter, sculptor, or other artist, with respect to the product of his

art;

(4) The scientist or technologist or any other person with regard to his

discovery or invention. (n)

Art. 722, NCC. The author and the composer, mentioned in Nos. 1 and 2

of the preceding article, shall have the ownership of their creations even

before the publication of the same. Once their works are published, their

rights are governed by the Copyright laws.

The painter, sculptor or other artist shall have dominion over the product

of his art even before it is copyrighted.


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The scientist or technologist has the ownership of his discovery or

invention even before it is patented. (n)

Extent of Ownership

- Right of creator of intellectual property before publication vs. his

right after it is made public

o Before work is made public, he has a right to keep it to himself

o Once it is made public, he loses this exclusive right, unless the

work is copyrighted or patented

Before publication

o While literary, dramatic, musical compositions, or designs for

work of ornament or utility remains unpublished, it is the

exclusive property of creator

o Creator can admit one or more persons to its use, to the

exclusion of all others does not alter exclusivity, provided

that the use to which he allows it to be put does not amount to

publication

After publication

o Author of literary work or composition has a right to first

publication

o Once published, it is dedicated to the public, and the author

loses the exclusive right to control subsequent publication by

others unless the work is placed under the protection of the

Copyright Law

Radio Broadcasts


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o International convention of Rome of 1928 recognizes in the

authors of literary and artistic works the exclusive right to

authorize broadcast of their works

Interpretation by Artists

o Argentine courtartists has the right of an author with respect

to his interpretation, and the broadcast is an edition for which

he should be paid

Production by Employee

o Employer will acquire title to works of employee if it is so

stipulated in the employment contract; otherwise, it remains

property of the author

Ownership of Pictures

o Photograph taken at the instance of A: there is an implied

agreement that photographer or stranger can publish or make

copies of the portrait without the permission of A

o Photograph taken at the instance of photographer and for his

benefit: A loses control over disposition of pictures

Ownership of Plans and Designs

o Exclusive right to license construction from them, until

published

o But if plans and specs prepared under a contract for an agreed

compensation, together with right to use them, they belong to

client

Art. 723, NCC. Letters and other private communications in writing are

owned by the person to whom they are addressed and delivered, but

they cannot be published or disseminated without the consent of the


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writer or his heirs. However, the court may authorize their publication or

dissemination if the public good or the interest of justice so requires. (n)

Ownership of Letters

o Dual interest

- Intellectual property consisting of thoughts and ideas

- Material and physical thingpaper and impression made thereon

o Sender has right to cause or prevent publication, but control over the

letter is with addressee

o If public good or interest of justice so requires, court may authorize

publication of private letters without consent of writer

- Necessary for vindication of character of person to whom letter is

addressed

- Letter is produced as evidence in court unless it constitutes a

privileged communication

o Attempts to publish may be prevented by injunction

o If unauthorized publication has already been made, author may sue

for damages

Art. 724, NCC. Special laws govern copyright and patent. (429a)

PATENTS

Patentable Inventions

- Any invention of a new and useful machine, manufactured product or

substance, process or an improvement of any of the foregoing, shall

be patentable

Inventions not Patentable

- Inventions contrary to public order or morals, or to public health or

welfare


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- Constitutes a mere idea, scientific principle or abstract theorem not

embodied in an invention

Period of Effectivity of Patent

- 17 years

- Patent cancelled upon failure to pay required annual fees within time

prescribed by law

Infringement of Patent

- Making, using, selling of the patented process or instrumentality by

any person without authorization on the part of the patentee

- There must be substantial identity

- Interchangeability and non-interchangeability of the devices of two

patents is an important test in determining the question of

infringement

- Patentee cannot treat another as an infringer who has improved the

original machine by use of different form or combination performing

the same functions

- If party merely substitutes an ingredient, which is well known to be a

substitute for the omitted ingredient, he is an infringer

- No infringement of a patent for a combination if a single element of

patentees combination is left out of the new device

Where No Infringement

- The making or using of a patented invention when not conducted for

profit and solely for the purpose of research or experiment, or for

instruction, shall not constitute infringement

Who are Liable

- Patentee may sue anyone who in his opinion is guilty of an

infringement


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- Government is not liable to a suit for infringement of a patent,

because the action is one of tort

- It may sue government if there is a contract between them for use of

invention

Defenses

Invalidity of Patent

1. Invention is not new or patentable

2. The specification does not comply with the requirements of the patent

law

3. The person to whom the patent was issued was not the true and

actual inventor or did not derive his rights from the true and actual

inventor

Patent has Lapsed

- Term of patent begins on the date when patent was issued and shall

expire 17 years thereafter except when patentee fails to pay annual

fees or patent is cancelled

Lack of Notice of Patent Right

- Damages cannot be recovered if infringement is committed before

infringer had actual notice

Abandonment

- Patentee has abandoned his rights

COPYRIGHT

Nature of Copyright

- The exclusive right secured by law to an author or his assigns to

multiply and dispose of copies of an intellectual or artistic creation,

whether by mechanical reproduction or by public presentation


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- Social interest in copyright: encouraging individuals to intellectual labor

by assuring them just rewards, and by securing society of the largest

benefits of their products

- It is a limited monopoly

- It is an incorporeal right to print and publish, and exists independent of

the corporeal property out of which it arises

-It is intangible property

- Law recognizes artistic and literary productions not only in respect of

ownership of the thing, but also in respect of the intangible estate

arising from the privilege of publishing and selling to others copies of

the thing produced

What may be Copyrighted

a. Books, manuscripts, directories and gazetteers

b. Periodicals, pamphlets, newspapers

c. Lectures, sermons, addresses, dissertations

d. Letters

e. Dramatic compositions, choreographic works

f. Musical compositions

g. Work of drawing, painting, architecture, sculpture engraving,

lithography, and other works of art

h. Reproductions of a work of art

i. Original ornamental designs or models for articles of manufacture

and other works of applied art

j. Maps, plans, sketches, and charts

k. Drawings or plastic works of scientific or technical character

l. Photographic works

m. Cinematography

n. Computer programs

o. Prints, pictorial illustrations, advertising copies, labels, tags, and box

wraps


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p. Dramatizations, translations, adaptations, abridgements,

arrangements of literary, musical, or artistic works

q. Collections of literary, scholarly, or artistic works

r. Other literary, scholarly, scientific and artistic works

What Cannot be Copyrighted

- Immoral or unchaste work

- To be determined by the minister of justice

- Government work but prior approval of government agency wherein

work is created shall be necessary for exploitation of such work for

profit

Rights of Copyright Owner

1. To reproduce and sell

2. To make any translations or other versions or arrangements

3. To exhibit, perform, represent

4. To make any other use or disposition

Extent of Protection

- Theories, speculations, ideas, or opinions are not covered copyright of

a book in which they are expressed

- But the association and combination of ideas and thoughts to make a

particular composition, and the appropriation and use of them in that

arrangement or combination is an infringement

- Once published, author ceases to have any exclusive claim to the

ideas or sentiments

- Copyright cannot prevent another author from expressing in his own

way the truths of a science or from explaining and using in his own way

the methods of an art where such truths and methods are the common

property of the whole world


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Infringement of a Copyright

- The doing of any person, without the consent of the owner of the

copyright, of anything the sole right to do which is conferred by statute

on the owner of the copyright

- Unlawful invasion of any one or more of the exclusive rights conferred

by the copyright

- Copying the copyrighted work

- Paraphrasing, appropriation of literary work and ideas of another

- Not necessary that whole work is copied, it being sufficient that so

much is taken that the value of the original is sensibly diminished

-Complete identity not essential

- The fact that an infringer acknowledges the source from which the

appropriated matter was derived has no bearing on the question of

infringement

Remedies for Infringement

1. Damages

2. Injunction

3. Destruction

4. Prosecution

Duration of Protection

- During the lifetime of creator and for 50 years after his death

- 30 years: Periodicals and newspapers, works of applied art,

cinematographic or photographic works

- Upon expiration, such writings or works shall go to the public and

become public property

RA 8293 (Intellectual Property Code)

Section 4.Definitions.


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4.1. The term "intellectual property rights" consists of:

a. Copyright and Related Rights;

b. Trademarks and Service Marks;

c. Geographic Indications;

d. Industrial Designs;

e. Patents;

f. Layout-Designs (Topographies) of Integrated Circuits; and

g. Protection of Undisclosed Information (n, TRIPS).

Section 22.Non-Patentable Inventions. - The following shall be

excluded from patent protection:

22.1. Discoveries, scientific theories and mathematical methods;

22.2. Schemes, rules and methods of performing mental acts, playing

games or doing business, and programs for computers;

22.3. Methods for treatment of the human or animal body by surgery or

therapy and diagnostic methods practiced on the human or animal body.

This provision shall not apply to products and composition for use in any

of these methods;

22.4. Plant varieties or animal breeds or essentially biological process forthe production of plants or animals. This provision shall not apply to

micro-organisms and non-biological and microbiological processes.

Provisions under this subsection shall not preclude Congress to consider

the enactment of a law providing sui generis protection of plant varieties

and animal breeds and a system of community intellectual rights

protection:

22.5. Aesthetic creations; and


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22.6. Anything which is contrary to public order or morality. (Sec. 8, R.A.

No. 165a)

Section 112.Definition of Industrial Design. - An industrial design is any

composition of lines or colors or any three-dimensional form, whether or

not associated-with lines or colors: Provided, That such composition or

form gives a special appearance to and can serve as pattern for an

industrial product or handicraft. (Sec. 55, R.A. No. 165a)

Section 172.Literary and Artistic Works. - 172.1. Literary and artistic

works, hereinafter referred to as "works", are original intellectual

creations in the literary and artistic domain protected from the moment of

their creation and shall include in particular:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

(c) Lectures, sermons, addresses, dissertations prepared for oral

delivery, whether or not reduced in writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or

entertainment in dumb shows;

(f) Musical compositions, with or without words;


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(g) Works of drawing, painting, architecture, sculpture, engraving,

lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture,

whether or not registrable as an industrial design, and other works ofapplied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional

works relative to geography, topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process

analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by

a process analogous to cinematography or any process for making

audio-visual recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.

172.2. Works are protected by the sole fact of their creation, irrespective

of their mode or form of expression, as well as of their content, quality

and purpose. (Sec. 2, P.D. No. 49a)


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177.4. Rental of the original or a copy of an audiovisual or

cinematographic work, a work embodied in a sound recording, a

computer program, a compilation of data and other materials or a

musical work in graphic form, irrespective of the ownership of the original

or the copy which is the subject of the rental; (n)

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work. (Sec. 5, P. D. No.

49a)

Art. 417, NCC. Supra.

ii. Rights and choses in actionNCC 417

Art. 417, NCC. Supra.