G.R. No. L-40411, 7 August 1935
Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Philippine Government and operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao. However, the land upon which the business was conducted belonged to another person.
On the land the sawmill company erected a building which housed the machinery used by it. Some of the implements thus used were clearly personal property, the conflict concerning machines which were placed and mounted on foundations of cement.
In the contract of lease between the sawmill company and the owner of the land, it was agreed upon that on the expiration of the period of their agreement, all the improvements and buildings introduced and erected by the party of the second part shall pass to the exclusive ownership of the lessor without any obligation on its part to pay any amount for said improvements and buildings, with the exception of the machineries.
In another action wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao, Saw, Mill Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that action against the defendant; a writ of execution issued thereon, and the properties now in question were levied upon as personalty by the sheriff. No third party claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein.
On a number of occasions, Davao Sawmill treated the machinery as personal property by executing chattel mortgages in favor of third persons. One of such is the appellee by assignment from the original mortgages.
Whether the machineries and equipment were personal in nature.
Yes. 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, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner.