LEUNG
YEE, plaintiff and appellant v. FRANK L. STRONG MACHINERY COMPANY and J. G.
WILLIAMSON, defendants and appellees
G.
R. No. 11658 | February
15, 1918
FACTS:
The “Compania Agricola Filipina bought a
considerable quantity of rice-cleaning machinery from the defendant machinery
company, and executed a chattel mortgage thereon to secure payment of the
purchase price. It included in the mortgage deed the building of strong
materials in which the machinery was installed, without any reference to the
land on which it stood. The indebtedness secure by this instrument not having
been paid when it fell due, the mortgaged property was sold by the sheriff and
was bought by the machinery company.
A few weeks, thereafter, the “Compania
Agricola Filipina” executed a deed of sale of the land upon which the building
stood to the machinery company. This deed makes no reference to the building
erected on the land and would appear to have been executed for the purpose of
curing any defects which might be found to exist in the machinery company’s
title to the building under the sheriff’s certificate of sale. The machinery
company went into possession of the building at or about the time when this
sale took place and it has continued in possession ever since.
At or about the time when the chattel
mortgage was executed in favor of the machinery company, the mortgagor executed
another mortgage to the plaintiff upon the building, separate and apart from
the land on which it stood, to secure payment of the balance of its
indebtedness to the plaintiff under a contract for the construction of the
building. Upon the failure of the mortgagor to pay the amount of the
indebtedness secured by the mortgage, the plaintiff secured judgment for that
amount, levied execution upon the building, bought it in at the sheriff’s sale.
At the time when the execution was levied
upon the building, the defendant machinery company, which was in possession,
filed with the sheriff a sworn statement setting up its claim of title and
demanding the release of the property from the levy.
The trial judge, relying upon the terms
of article 1473 of the Civil Code, gave judgment in favor of the machinery
company, on the ground that the company had its title to the building
registered prior to the date of registry of the plaintiff's certificate.
ISSUE:
Whether or not the chattel mortgage
changes the nature of the building from immovable to movable
RULING:
The registry here referred to is of
course the registry of real property, and it must be apparent that the
annotation or inscription of a deed of sale of real property in a chattel
mortgage registry cannot be given the legal effect of an inscription in the
registry of real property. By its express terms, the Chattel Mortgage Law
contemplates and makes provision for mortgages of personal property; and the
sole purpose and object of the chattel mortgage registry is to provide for the
registry of "Chattel mortgages," that is to say, mortgages of
personal property executed in the manner and form prescribed in the statute.
The building of strong materials in which
the rice-cleaning machinery was installed by the "Compañía Agrícola
Filipina" was real property, and the mere fact that the parties seem to
have dealt with it separate and apart from the land on which it stood in no
wise changed its character as real property. It follows that neither the
original registry in the chattel mortgage registry of the instrument purporting
to be a chattel mortgage of the building and the machinery installed therein,
nor the annotation in that registry of the sale of the mortgaged property, had
any effect whatever so far as the building was concerned.
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