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    Salma B
    Pedro mortgaged land in Malolos, Bulacan to secure a loan from PNB. When Pedro failed to pay, PNB foreclosed on the mortgage in 1980 and acquired title to the land in 1987. Pedro remained in possession and constructed a warehouse. In 1988, PNB sold the land and warehouse to Pablo. Pedro filed a complaint in Quezon City to annul the sale, claiming ownership of the warehouse. PNB argues the case should be heard in Malolos, Bulacan since the warehouse is considered real property under Article 415(1) of the Civil Code.

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    Q

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    Salma B
    31 views2 pages
    Pedro mortgaged land in Malolos, Bulacan to secure a loan from PNB. When Pedro failed to pay, PNB foreclosed on the mortgage in 1980 and acquired title to the land in 1987. Pedro remained in possession and constructed a warehouse. In 1988, PNB sold the land and warehouse to Pablo. Pedro filed a complaint in Quezon City to annul the sale, claiming ownership of the warehouse. PNB argues the case should be heard in Malolos, Bulacan since the warehouse is considered real property under Article 415(1) of the Civil Code.

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    Pedro mortgaged land in Malolos, Bulacan to secure a loan from PNB. When Pedro failed to pay, PNB foreclosed on the mortgage in 1980 and acquired title to the land in 1987. Pedro remained in possession and constructed a warehouse. In 1988, PNB sold the land and warehouse to Pablo. Pedro filed a complaint in Quezon City to annul the sale, claiming ownership of the warehouse. PNB argues the case should be heard in Malolos, Bulacan since the warehouse is considered real property under Article 415(1) of the Civil Code.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    31 views2 pages

    Q

    Uploaded by

    Salma B
    Pedro mortgaged land in Malolos, Bulacan to secure a loan from PNB. When Pedro failed to pay, PNB foreclosed on the mortgage in 1980 and acquired title to the land in 1987. Pedro remained in possession and constructed a warehouse. In 1988, PNB sold the land and warehouse to Pablo. Pedro filed a complaint in Quezon City to annul the sale, claiming ownership of the warehouse. PNB argues the case should be heard in Malolos, Bulacan since the warehouse is considered real property under Article 415(1) of the Civil Code.

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    © All Rights Reserved
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    Q: Pedro is the registered owner of a parcel of land situated in Malolos, Bulacan.

    In 1973,
    he mortgaged the land to the Philippine National Bank (PNB) to secure a loan of P100,
    000.00. For Pedro’s failure to pay the loan, the PNB foreclosed on the mortgage in 1980,
    and the land was sold at public auction to PNB for being the highest bidder. PNB secured
    the title thereto in 1987. In the meanwhile, Pedro, who was still in possession of the land,
    constructed a warehouse on the property. In 1988, the PNB sold the land to Pablo. The
    Deed of Sale was amended in 1989 to include the warehouse. Pedro, claiming ownership
    of the warehouse, files a complaint to annul the amended Deed of Sale before the
    Regional Trial Court of Quezon City, where he resides, against both the PNB and Pablo.
    The PNB filed a motion to dismiss the complaint for improper venue contending that the
    warehouse is real property under Art. 415(1) of the Civil Code and therefore the
    action should have instead been filed in Malolos, Bulacan. Pedro claims otherwise.
    The question arose as to whether the warehouse should be considered as real or
    personal property. If consulted, what would your legal advice be? (1997 BAR

    A: The warehouse which is a construction adhered to the soil is an immovable by nature


    under Art. 415(1), and the proper venue of any case to recover ownership of the same
    which is what the purpose of the complaint to annul he amended Deed of Sale amounts
    to, should be the place where the property is located, or the RTC of Bulacan.

    X constructed a house on a lot which he was leasing from Y. Later, X executed a chattel
    mortgage over said house in favor of Z as security for a loan obtained from the
    latter. Still later, X acquired ownership of the land where his house was constructed, after
    which he mortgaged both house and land in favor of a bank, which mortgage was
    annotated on the Torrens Certificate of Title. When X failed to pay his loan to the
    bank, the latter, being the highest bidder at the foreclosure sale, foreclosed the
    mortgage and acquired X’s house and lot. Learning of the proceedings conducted by
    the bank, Z is now demanding that the bank reconvey to him X’s house or pay X’s
    loan to him plus interests. Is Z’s demand against the bank valid and sustainable?
    Why? (2003 Bar Question)

    SUGGESTED ANSWER:
    No, Z’s demand is not valid. A building is immovable or real property whether it is
    erected by the owner of the land, by a usufructuary, or by a lessee. It may be treated
    as a movable by the parties to a chattel mortgage but such is binding only
    between them and not on third parties (Evangelista v. Alto Surety Co., Inc. 103
    Phil. 401 [1958]). In this case, since the bank is not a party to the chattel mortgage, it
    is not bound by it. As far as the Bank is concerned, the chattel mortgage does
    not exist. Moreover, the chattel mortgage is void because it was not registered.
    Assuming that it is valid, it does not bind the Bank because it was not annotated
    on the title of the land mortgaged to the bank. Z cannot demand that the Bank pay him
    the loan Z extended to X, because the Bank was not privyto such loan transaction.

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