Evangelista vs. Alto Surety

SANTOS EVANGELISTA, petitioner,
vs.
ALTO SURETY & INSURANCE CO., INC., respondent.

G.R. No. L-11139
April 23, 1958

FACTS: 

Petitioner Santos Evangelista sued Rivera for collection of sum of money on June 4, 1949. On the same date, he obtained a writ of preliminary attachment, which was levied upon a house built by Rivera, a lessee,  on a land owned by respondent lessor Alto Surety. The levy was made pursuant to the rules governing the levy of real properties.

In due course, judgment was rendered in favor of Evangelista, who, on October 8, 1951, bought the house at the public auction made to satisfy the judgment. The corresponding deed of sale was issued to him on October 22, 1952. When Evangelista sought to take possession of the house, he was told that Alto Surety was now the owner of the house because the latter allegedly bought the house at an auction sale on September 29, 1950. It turned out that Alto Surety likewise filed an action against Rivera and likewise obtained a favorable judgment. The corresponding deed was issued to Alto Surety on May 10, 1952. 

Subsequently, Evangelista instituted an action against Alto Surety and Rivera for the purpose of establishing his title over said house. The trial court ruled in favor of Evangelista. On appeal, however, the Court of Appeals reversed the decision of the trial court on the ground that Evangelista did not acquire a preferential lien through the preliminary writ of attachment because the house was levied as if it were an immovable property. The Court of Appeals was of the opinion that the house should have been levied pursuant to the rules governing the levy of personal property (apparently for the reason that the house was constructed on a land belonging to another).

ISSUE: 

Whether a house, constructed by the lessee of the land on which it is built, should be dealt with, for purpose, of attachment, as immovable property, or as personal property.

HELD: 

The house is an immovable property. As explicitly held, in Ladera v. Hodges, a true building (not merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by usufructuary or lessee.

It is true that the parties to a deed of chattel mortgage may agree to consider a house as personal property for purposes of said contract. However, this view is good only insofar as the contracting parties are concerned. It is based, partly, upon the principle of estoppel. Neither this principle, nor said view, is applicable to strangers to said contract. Much less is it in point where there has been no contract whatsoever, with respect to the status of the house involved, as in the case at bar.

As held in Manarang v Ofilada, “Sales on execution affect the public and third persons. The regulation governing sales on execution are for public officials to follow. The form of proceedings prescribed for each kind of property is suited to its character, not to the character, which the parties have given to it or desire to give it. When the rules speak of personal property, property which is ordinarily so considered is meant; and when real property is spoken of, it means property which is generally known as real property.  The regulations were never intended to suit the consideration that parties may have privately given to the property levied upon. Enforcement of regulations would be difficult were the convenience or agreement of private parties to determine or govern the nature of the proceedings. We therefore hold that the mere fact that a house was the subject of the chattel mortgage and was considered as personal property by the parties does not make said house personal property for purposes of the notice to be given for its sale of public auction.”