Property and Lease – Concept and Nature, Definition and Characterstics

Property and Lease

Property and Lease

Buildings are considered immovable provided they are more or less of a permanent structure, substantially adhering to the land, and not mere superimpositions on the land like barong-barongs or quonset fixtures and provided there is the intent of permanent annexation. (See Salmond, Jurisprudence, p. 449). Note that the law uses the term “adhered’’ and not “superimposed.’’ (See Luna v. Encarnacion, et al., 91 Phil. 531). And this is true, whether the building is built on one’s own land, or on rented land. The reason is clear: the law on this point does not distinguish as to who built or owns the building. (See Ladera v. Hodges, CA, 48 O.G. 5374). It is obvious that the inclusion of “building,’’ separate and distinct from the land, in Art. 415, can only mean that a building is by itself an immovable property. (Lopez v. Oroso, Jr., et al., L-10817-18, Feb. 28, 1958; Assoc., Inc. and Surety Co., Inc. v. Iya, et al., L-10837-38, May 30, 1958). Therefore, the general rule is that mortgage on a building is a real es ate mortgage, and not a mortgage on a chattel (personal property) or a chattel mortgage. Indeed, the nature of the building as real property does not depend on the way the parties deal with it. (Leung Yee v. Strong Machinery Co., 37 Phil. 644; Ladera v. Hodges, [CA] 48 O.G. 5374). A dismantled house and/or materials of such house should be regarded as personal properties. (See Biscerra, et al. v. Teneza, et al., L-16218, Nov. 29, 1962).

Tumalad vs Vicencio, 41 SCRA 143

Property; Status of buildings as immovable property.—It is obvious that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties (art. 415, New Civil Code) could only mean one thing—that a building is by itself an immovable property irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner.

Deviations from rule.—Certain deviations, however, have been allowed for various reasons. In the case of Manarang vs. Ofilada, No. L-8133, 18 May 1956, 99 Phil. 109, this Court stated that ‘‘it is undeniable that the parties to a contract may by agreement treat as personal property that which by nature would be real property.’’ Again, in the case of Luna vs. Encarnacion, No. L-4637, 30 June 1952, 91 Phil. 531, the subject of the contract designated as Chattel Mortgage was a house of mixed materials, and this Court held therein that it was a valid Chattel mortgage because it was so expressly designated and specifically that the property given as security ‘‘is a house of mixed materials, which by its very nature is considered personal property.”

Reason; Owner is estopped.—The view that parties to a deed of chattel mortgage may agree to consider a house as personal property for the purposes of said contract, is good only insofar as the contracting parties are concerned. It is based, partly, upon the principle of estoppel. Hence, if a house belonging to a person stands on a rented land belonging to another person, it may be mortgaged as a personal property as so stipulated in the document of mortgage. It should be noted, however, that the principle is predicated on statements by the owner declaring his house to be a chattel, a conduct that may conceivably estop him from subsequently claiming otherwise.

Contracts; By ceding, selling or transferring house by way of chattel mortgage, house is treated as chattel.—In the contract, the house on rented land is not only expressly designated as Chattel Mortgage; it specifically provides that “the mortgagor . . . voluntarily CEDES, SELLS and TRANSFERS by way of Chattel Mortgage the property together with its leasehold rights over the lot on which it is constructed and participation. . .” 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 not 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. Moreover, the subject house stood on a rented lot to which defendants-appellants merely had a temporary right as lessee, and although this can not in itself alone determine the status of the property, it does so when combined with other factors to sustain the interpretation that the parties, particularly the mortgagors, intended to treat the house as personalty.

Chattel Mortgage Law; Foreclosure of the mortgaged property.—Chattel mortgages are covered and regulated by the Chattel Mortgage Law, Act No. 1508. Section 14 of this Act allows the mortgagee to have the property mortgaged sold at public auction through a public officer in almost the same manner as that allowed by Act No. 3135, as amended by Act No. 4118, provided that the requirements of the law relative to notice and registration are complied with.

Redemption of foreclosed property.—Section 6 of Act No. 3135, as amended provides that the debtor-mortgagor may, at any time within one year from and after the date of the auction sale, redeem the property sold at the extrajudicial foreclosure sale.

Petition to obtain possession during period of redemption; Requirements.—Section 7 of Act 3135, as amended allows the purchaser of the property to obtain from the court the possession during the period of redemption; but the same provision expressly requires the filing of a petition with the proper Court of First Instance and the furnishing of a bond. It is only upon filing of the proper motion and the approval of the corresponding bond that the order for a writ of possession issues as a matter of course. No discretion is left to the court. In the absence of such a compliance, the purchaser can not claim possession during the period of redemption as a matter of right. In such a case, the governing provision is Section 34, Rule 39, of the Revised Rules of Court, which also applies to properties purchased in extrajudicial foreclosure proceedings.

To whom rentals receivable during redemption period belong.—While it is true that the Rules of Court allow the purchaser to receive the rentals if the purchased property is occupied by tenants, he is, nevertheless, accountable to the judgmentdebtor or mortgagor as the case may be, for the amount so received and the same will be duly credited against the redemption price when the said debtor or mortgagor effects the redemption. Differently stated, the rentals receivable from tenants, although they may be collected by the purchaser during the redemption period, do not belong to the latter but still pertain to the debtor or mortgagor. The rationale for the Rule, it seems, is to secure for the benefit of the debtor or mortgagor, the payment of the redemption amount and the consequent return to him of his properties sold at public auction.

Mortgagor is entitled to remain in possession during period of redemption and to collect rents.—Since the defendants-appellants were occupying the house at the time of the auction sale, they are entitled to remain in possession during the period of redemption or within one year from and after 27 March 1956, the date of the auction sale, and to collect the rents or profits during the said period.

Yap vs. Tanada, 163 SCRA 464, July 18, 1988

Yap’s next argument that the water pump had become immovable property by its being installed in his residence is also untenable. The Civil Code considers as immovable property, among others, anything “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.”42 The pump does not fit this description. It could be, and was in fact separated from Yap’s premises without being broken or suffering deterioration. Obviously the separation or removal of the pump involved nothing more complicated than the loosening of bolts or dismantling of other fasteners.

Yap’s last claim is that in the process of the removal of the pump from his house, Goulds’ men had trampled on the plants growing there, destroyed the shed over the pump, plugged the exterior casings with rags and cut the electrical and conduit pipes; that he had thereby suffered actual- damages in an amount of not less than P2,000.00, as well as moral damages in the sum of P10,000.00 resulting from his deprivation of the use of his water supply; but the Court had refused to allow him to prove these acts and recover the damages rightfully due him. Now, as to the loss of his water supply, since this arose from acts legitimately done, the seizure on execution of the water pump in enforcement of a final and executory judgment, Yap most certainly is not entitled to claim moral or any other form of damages therefor.

Leung Yee v. Strong Machinery Co. 37 Phil. 644

FACTS: The “Compania Agricola Filipina” purchased from “Strong Machinery Co.” rice-cleaning machines which the former installed in one of its buildings. As security for the purchase price, the buyer executed a CHATTEL MORTGAGE on the machines and the building on which they had been installed. Upon buyer’s failure to pay, the registered mortgage was foreclosed, and the building was  purchased by the seller, the “Strong Machinery Co.” This sale was annotated in the Chattel Mortgage Registry.

Later, the “Agricola” also sold to “Strong Machinery” the lot on which the building had been constructed. This sale was not registered in the Registry of Property BUT the Machinery Co. took possession of the building and the lot. Previously however, the same building had been purchased at a sheriff’s sale by Leung Yee, a creditor of “Agricola,” although Leung Yee knew all the time of the prior sale in favor of “Strong Machinery.” This sale in favor of Leung Yee was recorded in the Registry. Leung Yee now sues to recover the property from “Strong Machinery.” Issue: who has a better right to the property?

HELD: The building is real property, therefore, its sale as annotated in the Chattel Mortgage Registry cannot be given the legal effect of registration in the Registry of Real Property. The mere fact that the parties decided to deal with the building as personal property does not change its character as real property. Thus, neither the original registry in the chattel mortgage registry, nor the annotation in said registry of the sale of the mortgaged property had any effect on the building. However, since the land and the building had fi rst been purchased by “Strong Machinery” (ahead of Leung Yee), and this fact was known to Leung Yee, it follows that Leung Yee was not a purchaser in good faith, and should therefore not be entitled to the property. “Strong Machinery” thus has a better right to the property.

(4) Jurisprudence on the Classification According to the Supreme Court in the case of Standard Oil Co. of New York v. Jaranillo, 44 Phil. 630, under certain conditions, it is undeniable that the parties to a contract may, by agreement, treat as personal property that which by nature would be real property. However, the true reason why the agreement would be valid between the parties is the application of estoppel. It stated further that it is a familiar phenomenon to see things classed as real property for purposes of taxation, which on general principles may be considered as personal property.

However, it would seem that under the Civil Code, it is only the LAW which may consider certain real property (like growing crops) as personal property (for the purpose of making a chattel mortgage). (See Art. 416, par. 2).

Burgos, Sr. vs. Chief of Staff, AFP, 133 SCRA 800 , December 26, 1984

Same; Same; Property; Machinery bolted to the ground may be seized under a search warrant if its owner is not the owner of the land on which it has been placed for then it is classified as movable property.—Neither is there merit in petitioners’ assertion that real properties were seized under the disputed warrants. Under Article 415[5] of the Civil Code of the Philippines, “machinery, receptables, 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” are considered immovable property. In Davao Sawmill Co. v. Castillo where this legal provision was invoked, this Court ruled that machinery which is movable by nature becomes immobilized when placed by the owner of the tenement, property or plant, but not so when placed by a tenant, usufructuary, or any other person having only a temporary right, unless such person acted as the agent of the owner.

In the case at bar, petitioners do not claim to be the owners of the land and/or building on which the machineries were placed. This being the case, the machineries in question, while in fact bolted to the ground remain movable property susceptible to seizure under a search warrant.

(7) Paragraph 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.’  (a) Essential Requisites

1) The placing must be made by the owner of the tenement, his agent, or duly authorized legal representative.

2) The industry or works must be carried on in the building or on the land. A transportation business is not carried on in a building or in the compound. (Mindanao Bus Co. v. City Assessor, L-17870, Sep. 29, 1962).

3) The machines, etc., must tend directly to meet the needs of said industry or works. (ADAPTABILITY).

4) The machines must be essential and principal elements in the industry, and not merely incidental. [Thus, cash registers, typewriters, calculators, computers, fax machines, etc., usually found and used in hotels, restaurants, theaters, etc. are merely incidentals, and not and should not be considered immobilized by destination, for these businesses can continue or carry on their functions without these equipments. The same applies to the repair or service shop of the transportation business because the vehicles may be repaired or serviced in another shop belonging to another. On the other hand, machineries of breweries used in the manufacture of liquor and soft drinks, though movable by nature, are immobilized because they are essential to said industries; but the delivery trucks and adding machines which they usually own and use and are found within their industrial compounds are merely incidentals and retain their movable nature. (Mindanao Bus Co. v. City Assessor and Treasurer, L-17870, Sep. 29, 1962).

Davao Sawmill Co. v. Castillo – 61 Phil. 709

FACTS: A tenant placed machines for use in a sawmill on the land of the landlord. Is the machinery real or personal?

HELD: As a rule, the machinery should be considered as personal, since it was not placed on the land by the owner of said land. Immobilization by destination or purpose cannot generally be made by a person whose possession of the property is only TEMPORARY, otherwise we will be forced to presume that he intended to give the property permanently away in favor of the owner of the premises.

People’s Bank and Trust Co. v. Dahican Lumber Co. – L-17500, May 16, 1967

FACTS: Several parcels of land were the objects of a  real estate mortgage. The mortgage deed also stated that the mortgage included essential after-acquired properties such as machinery, fi xtures, tools, and equipment. The real mortgage was then registered as such in the Registry of Deeds. Issue: Should the deed also be registered in the chattel mortgage registry insofar as it covered the afteracquired machinery, fi xtures, tools and equipment?

HELD: No more, since the after-acquired properties had been immobilized by destination (they were used in the development of the lumber concession). [NOTE: Please observe that in this case, the parties to the real mortgage had treated the after-acquired properties as real properties by agreeing that they would be automatically subject to the lien of the real estate mortgage executed by them. In the Davao Sawmill Co. v. Castillo (61 Phil. 709) case, the parties had treated after-acquired properties, including the machines, as personal property by executing chattel mortgages thereon. Hence, this Davao Sawmill case cannot apply to the instant case.

Makati Leasing and Finance Corp. vs. Wearever Textile Mills, Inc., 122 SCRA 296 , May 16, 1983

Property, Mortgage; Replevin; Where a chattel mortgage is constituted on machinery permanently attached to the ground the machinery is to be considered as personal property and the chattel mortgage constituted thereon is not null and void, regardless of who owns the land.—Examining the records of the instant case, We find no logical justification to exclude and rule out, as the appellate court did, the present case from the application of the abovequoted pronouncement. If a house of strong materials, like what was involved in the above Tumalad case, may be considered as personal property for purposes of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or purpose, may not be likewise treated as such. This is really because one who has so agreed is estopped from denying the existence of the chattel mortgage.

Same; Same; Same; Same.—In rejecting petitioner’s assertion on the applicability of the Tumalad doctrine, the Court of Appeals lays stress on the fact that the house involved therein was built on a land that did not belong to the owner of such house. But the law makes no distinction with respect to the ownership of the land on which the house is built and We should not lay down distinctions not contemplated by law.

Same: Same: Contracts: Equity; Execution of chattel mortgage on machinery permanently attached to the ground is only an equitable ground for rendering the contract voidable provided that the mortgagor has not been benefited by the contract.—Private respondent contends that estoppel cannot apply against it because it had never represented nor agreed that the machinery in suit be considered as personal property but was merely required and dictated on by herein petitioner to sign a printed form of chattel mortgage which was in a blank form at the time of signing. This contention lacks persuasiveness. As aptly pointed out by petitioner and not denied by the respondent, the status of the subject machinery as movable or immovable was never placed in issue before the lower court and the Court of Appeals except in a supplemental memorandum in support of the petition filed in the appellate court. Moreover, even granting that the charge is true, such fact alone does not render a contract void ab initio, but can only be a ground for rendering said contract voidable, or annullable pursuant to Article 1390 of the new Civil Code, by a proper action in court. There is nothing on record to show that the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify the same. On the other hand, as pointed out by petitioner and again not refuted by respondent, the latter has indubitably benefited from said contract. Equity dictates that one should not benefit at the expense of another. Private respondent could not now therefore, be allowed to impugn the efficacy of the chattel mortgage after it has benefited therefrom.

B.H. Berkentkotter & Co. v. CA – 216 SCRA 584 (1992)

Just compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation proceedings. But where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the time of the fi ling of the complaint. The Court is not bound by the Commissioner’s report.

Associated Ins. & Surety Co., Inc. vs. lya, et al., 103 Phil. 972 , May 30, 1958

IMMOVABLE PROPERTY; BUILDINGS; IMMOVABLE STATUS OF BUILDING UNAFFECTED BY CHANGE OF OWNERSHIP OF LAND.—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 (Lopez vs. Orosa, supra, p. 98). It cannot be divested of its character of a realty by the fact that the land on which it is constructed belongs to another. If the status of the building were to depend on the ownership of the land, a situation would be created where a permanent fixture changes its nature or character as the ownership of the land changes hands.

CHATTEL MORTGAGE; SUBJECT OF; EFFECT WHERE THE INTEREST CONVEYED is IMMOVABLE.—As personal properties could only be the subject of a chattel mortgage, the execution of a chattel mortgage on a building is invalid and a nullity, the registration of the chattel notwithstanding. The registration of the chattel in the Chattel Mortgage Registry produced no effect whatsoever for where the interest conveyed is in the nature of a real property, the registration of the document in the registry of chattels is merely a futile act. Thus the registration of the chattel mortgage of a building of strong materials produce no effect as far as the building is concerned (Leung Yee vs. Strong Machinery Co., 37 Phil. 644).

RIGHT ACQUIRED BY PURCHASER AT AN EXTRA-JUDICIAL FORECLOSURE SALE.—A mortgage creditor who purchases real properties at an extra-judicial foreclosure sale thereof by virtue of a chattel mortgage constituted in his favor, which mortgage has been declared null and void with respect to said real properties, acquires no right thereto by virtue of said sale (De la Riva vs. Ah Kee, 60 Phil. 899).

Board of Assessment Appeals vs. Manila Electric Company, 10 SCRA 68(1964)

The steel towers or supports in question, do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to the soil. As per description, given by the lower court, they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. They can not be included under paragraph 3, as they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together by means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same. These steel towers or supports do not also fall under paragraph 5, for they are not machineries, receptacles, instruments or implements, and even if they were, they are not intended for industry or works on the land. Petitioner is not engaged in an industry or works on the land in which the steel supports or towers are constructed.

Board of Assessment Appeals, Q.C. v. Meralco – 10 SCRA 68

ISSUE: Are the steel towers or poles of the MERALCO considered real or personal properties?

HELD: They are personal (not real) properties. Be it noted that:

(a) they do not come under Par. 1 of Art. 415 because they are neither buildings or constructions adhered to the soil;

(b) they do not come under Par. 3 because they are not attached to an immovable in a fixed manner, that is, they can be separated without breaking the material or causing deterioration of the object to which they are attached;

(c) they do not come under Par. 5 because they are not machineries, receptacles, or instruments, but even if they are, they are not intended for an industry to be carried on in the premises.

Meralco Securities Industrial Corporation vs. Central Board of Assessment Appeals, 114 SCRA 260 , May 31, 1982

Taxation; Property; Real Property Tax Code; Pipeline System of Meralco Securities classified as real property and subject to tax they being machinery or improvements; And does not fall within the classes of exempt real property.—Meralco Securities insists that its pipeline is not subject to realty tax because it is not real property within the meaning of article 415. This contention is not sustainable under the provisions of the Assessment Law, the Real Property Tax Code and the Civil Code. Section 2 of the Assessment Law provides that the realty tax is due “on real property, including land, buildings, machinery, and other improvements” not specifically exempted in section 3 thereof. It is incontestable that the pipeline of Meralco Securities does not fall within any of the classes of exempt real property enumerated in section 3 of the Assessment Law and section 40 of the Real Property Tax Code.

Same; Same; Same; Petroleum Law does not exempt Meralco Securities from payment of realty taxes; Realty tax distinguished from local tax.—Meralco Securities argues that the realty tax is a local tax or levy and not a tax of general application. This argument is untenable because the realty tax has always been imposed by the lawmaking body and later by the President of the Philippines in the exercise of his lawmaking powers, as shown in sections 342 et seq. of the Revised Administrative Code, Act No. 3995, Commonwealth Act No. 470 and Presidential Decree No. 464. The realty tax is enforced throughout the Philippines and not merely in a particular municipality or city but the proceeds of the tax accrue to the province, city, municipality and barrio where the realty taxed is situated (Sec. 86, P.D. No. 464). In contrast, a local tax is imposed by municipal or city council by virtue of the Local Tax Code, Presidential Decree No. 231, which took effect on July 1, 1973 (69 O.G. 6197).

Caltex (Phil.) Inc. vs. Central Board of Assessment Appeals, 114 SCRA 296 , May 31, 1982

Gasoline station equipments and machineries are subject to the real property tax.—We hold that the said equipment and machinery, 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 or affixed 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.

Gasoline station equipments and machineries are permanent fixtures for purposes of realty taxation.—Here, the question is whether the gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement (which are indubitably taxable realty) should be subject to the realty tax. This question is different from the issue raised in the Davao Saw Mill case. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty (84 C.J.S. 181-2, Notes 40 and 41). “It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property” (Standard Oil Co. of New York vs. Jaramillo, 44 Phil. 630, 633).

Sibal v. Valdez – 50 Phil. 512

FACTS: In a case brought by plaintiff against defendant, the latter won. For the purpose of satisfying the judgment won by the defendant, the sheriff attached the sugar cane that was then growing on the lots of the plaintiff. Said lots incidentally had already been previously attached by another judgment creditor of the plaintiff. Within the one-year period given by law for redemption, the plaintiff wanted to redeem the lots from one creditor, and the sugar cane from the other creditor. The lots were redeemed, the redemption of the sugar cane was however refused by the defendant, who contended that the sugar cane was personal property, and therefore could not be the subject of the legal redemption sought to be enforced. The plaintiff upon the other hand claimed that the sugar cane was real property for same could be considered as “growing fruits” under par. 2 of Art. 415. Issue: How should the sugar cane be regarded — as real property or as personal property?

HELD: The sugar cane, although considered as “growing fruits” and therefore ordinarily real property under Par. 2 of Art. 415 of the Civil Code, must be regarded as PERSONAL PROPERTY for purposes of the Chattel Mortgage Law, and also for purposes of attachment, because as ruled by the Louisiana Supreme Court, the right to the growing crops mobilizes (makes personal, as contra distinguished from immobilization)the crops by ANTICIPATION. More specifically, it said that the existence of a right on the growing crop is a mobilization by anticipation, a gathering as it were, in advance, rendering the crop movable. (See Lumber Co. v. Sheriff, 106 La. 418).

U.S. v. Carlos – 21 Phil. 543

FACTS: The defendant used a “jumper” and was thus able to divert the flow of electricity, causing loss to the Meralco of over 2000 kilowatts of current. Accused of theft, his defense was that electricity was an unknown force, not a fluid, and being intangible, could not be the object of theft.

HELD: While electric current is not a fluid, still its manifestations and effects like those of gas may be seen and felt. The true test of what may be stolen is not whether it is corporeal or incorporeal, but whether, being possessed of value, a person other than the owner, may appropriate the same. Electricity, like gas, is a valuable merchandise, and may thus be stolen. (See also U.S. v. Tambunting, 41 Phil. 364).

A promissory note is personal property; the right to collect it is also personal property; but a mortgage on real estate is real property by analogy. (Par. 10, Art. 415; see also Hilado v. Register of Deeds, 49 Phil. 542; Hongkong and Shanghai Bank v. Aldecoa and Co., 30 Phil. 255).

Paragraph 10: ‘Contracts for public works, and servitudes and other real rights over immovable property.’

(a) Compared with the Old Law Under the old Civil Code, the words “administrative concessions for public works” were used instead of “contracts for public works.”

(b) Rights

The properties referred to in paragraph 10 are not material things but rights, which are necessarily intangible. (See 3 Manresa 11). The piece of paper on which the contract for public works has been written is necessarily personal property, but the contract itself, or rather, the right to the contract, is real property. A servitude or easement is an encumbrance imposed on an immovable for the benefi t of another immovable belonging to another owner, or for the benefi t of a person, group of persons, or a community (like the easement of right of way). (Arts. 613-614). Other real rights over real property include real mortgage (see Hongkong and Shanghai Bank v. Aldecoa and Co., 30 Phil. 255), antichresis, possessory retention, usufruct and leases of real property, when the leases have been registered in the Registry of Property; or even if not registered, if their duration is for more than a year. Upon the other hand, the usufruct of personal property or a lease of personal property, should be considered personal property.

Source: Civil Code, Volume II (Property) – Paras

2 responses to “Property and Lease – Concept and Nature, Definition and Characterstics

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