G.R. No. L-50008 August 31, 1987PRUDENTIAL
BANK,petitioner,vs.HONORABLE DOMINGO D. PANIS, Presiding Judge of
Branch III, Court of First Instance of Zambales and Olongapo City;
FERNANDO MAGCALE & TEODULA
BALUYUT-MAGCALE,respondents.PARAS,J.:This is a petition for review
on certiorari of the November 13, 1978 Decision*of the then Court
of First Instance of Zambales and Olongapo City in Civil Case No.
2443-0 entitled "Spouses Fernando A. Magcale and Teodula
Baluyut-Magcale vs. Hon. Ramon Y. Pardo and Prudential Bank"
declaring that the deeds of real estate mortgage executed by
respondent spouses in favor of petitioner bank are null and
void.The undisputed facts of this case by stipulation of the
parties are as follows:... on November 19, 1971, plaintiffs-spouses
Fernando A. Magcale and Teodula Baluyut Magcale secured a loan in
the sum of P70,000.00 from the defendant Prudential Bank. To secure
payment of this loan, plaintiffs executed in favor of defendant on
the aforesaid date a deed of Real Estate Mortgage over the
following described properties:l. A 2-STOREY, SEMI-CONCRETE,
residential building with warehouse spaces containing a total floor
area of 263 sq. meters, more or less, generally constructed of
mixed hard wood and concrete materials, under a roofing of cor. g.
i. sheets; declared and assessed in the name of FERNANDO MAGCALE
under Tax Declaration No. 21109, issued by the Assessor of Olongapo
City with an assessed value of P35,290.00. This building is the
only improvement of the lot.2. THE PROPERTY hereby conveyed by way
of MORTGAGE includes the right of occupancy on the lot where the
above property is erected, and more particularly described and
bounded, as follows:A first class residential land Identffied as
Lot No. 720, (Ts-308, Olongapo Townsite Subdivision) Ardoin Street,
East Bajac-Bajac, Olongapo City, containing an area of 465 sq. m.
more or less, declared and assessed in the name of FERNANDO MAGCALE
under Tax Duration No. 19595 issued by the Assessor of Olongapo
City with an assessed value of P1,860.00; bounded on theNORTH: By
No. 6, Ardoin StreetSOUTH: By No. 2, Ardoin StreetEAST: By 37 Canda
Street, andWEST: By Ardoin Street.All corners of the lot marked by
conc. cylindrical monuments of the Bureau of Lands as visible
limits. ( Exhibit "A, " also Exhibit "1" for defendant).Apart from
the stipulations in the printed portion of the aforestated deed of
mortgage, there appears a rider typed at the bottom of the reverse
side of the document under the lists of the properties mortgaged
which reads, as follows:AND IT IS FURTHER AGREED that in the event
the Sales Patent on the lot applied for by the Mortgagors as herein
stated is released or issued by the Bureau of Lands, the Mortgagors
hereby authorize the Register of Deeds to hold the Registration of
same until this Mortgage is cancelled, or to annotate this
encumbrance on the Title upon authority from the Secretary of
Agriculture and Natural Resources, which title with annotation,
shall be released in favor of the herein Mortgage.From the
aforequoted stipulation, it is obvious that the mortgagee
(defendant Prudential Bank) was at the outset aware of the fact
that the mortgagors (plaintiffs) have already filed a Miscellaneous
Sales Application over the lot, possessory rights over which, were
mortgaged to it.Exhibit "A" (Real Estate Mortgage) was registered
under the Provisions of Act 3344 with the Registry of Deeds of
Zambales on November 23, 1971.On May 2, 1973, plaintiffs secured an
additional loan from defendant Prudential Bank in the sum of
P20,000.00. To secure payment of this additional loan, plaintiffs
executed in favor of the said defendant another deed of Real Estate
Mortgage over the same properties previously mortgaged in Exhibit
"A." (Exhibit "B;" also Exhibit "2" for defendant). This second
deed of Real Estate Mortgage was likewise registered with the
Registry of Deeds, this time in Olongapo City, on May 2,1973.On
April 24, 1973, the Secretary of Agriculture issued Miscellaneous
Sales Patent No. 4776 over the parcel of land, possessory rights
over which were mortgaged to defendant Prudential Bank, in favor of
plaintiffs. On the basis of the aforesaid Patent, and upon its
transcription in the Registration Book of the Province of Zambales,
Original Certificate of Title No. P-2554 was issued in the name of
Plaintiff Fernando Magcale, by the Ex-Oficio Register of Deeds of
Zambales, on May 15, 1972.For failure of plaintiffs to pay their
obligation to defendant Bank after it became due, and upon
application of said defendant, the deeds of Real Estate Mortgage
(Exhibits "A" and "B") were extrajudicially foreclosed. Consequent
to the foreclosure was the sale of the properties therein mortgaged
to defendant as the highest bidder in a public auction sale
conducted by the defendant City Sheriff on April 12, 1978 (Exhibit
"E"). The auction sale aforesaid was held despite written request
from plaintiffs through counsel dated March 29, 1978, for the
defendant City Sheriff to desist from going with the scheduled
public auction sale (Exhibit "D")." (Decision, Civil Case No.
2443-0, Rollo, pp. 29-31).Respondent Court, in a Decision dated
November 3, 1978 declared the deeds of Real Estate Mortgage as null
and void (Ibid., p. 35).On December 14, 1978, petitioner filed a
Motion for Reconsideration (Ibid., pp. 41-53), opposed by private
respondents on January 5, 1979 (Ibid., pp. 54-62), and in an Order
dated January 10, 1979 (Ibid., p. 63), the Motion for
Reconsideration was denied for lack of merit. Hence, the instant
petition (Ibid., pp. 5-28).The first Division of this Court, in a
Resolution dated March 9, 1979, resolved to require the respondents
to comment (Ibid., p. 65), which order was complied with the
Resolution dated May 18,1979, (Ibid., p. 100), petitioner filed its
Reply on June 2,1979 (Ibid., pp. 101-112).Thereafter, in the
Resolution dated June 13, 1979, the petition was given due course
and the parties were required to submit simultaneously their
respective memoranda. (Ibid., p. 114).On July 18, 1979, petitioner
filed its Memorandum (Ibid., pp. 116-144), while private
respondents filed their Memorandum on August 1, 1979 (Ibid., pp.
146-155).In a Resolution dated August 10, 1979, this case was
considered submitted for decision (Ibid., P. 158).In its
Memorandum, petitioner raised the following issues:1. WHETHER OR
NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND2. WHETHER OR
NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE RESPONDENTS OF
MISCELLANEOUS SALES PATENT NO. 4776 ON APRIL 24, 1972 UNDER ACT NO.
730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO. P-2554 ON
MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL
ESTATE MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122).This
petition is impressed with merit.The pivotal issue in this case is
whether or not a valid real estate mortgage can be constituted on
the building erected on the land belonging to another.The answer is
in the affirmative.In the enumeration of properties under Article
415 of the Civil Code of the Philippines, this Court ruled that,
"it is obvious that the inclusion of "building" separate and
distinct from the land, in said provision of law can only mean that
a building is by itself an immovable property." (Lopez vs. Orosa,
Jr., et al., L-10817-18, Feb. 28, 1958; Associated Inc. and Surety
Co., Inc. vs. Iya, et al., L-10837-38, May 30,1958).Thus, while it
is true that a mortgage of land necessarily includes, in the
absence of stipulation of the improvements thereon, buildings,
still a building by itself may be mortgaged apart from the land on
which it has been built. Such a mortgage would be still a real
estate mortgage for the building would still be considered
immovable property even if dealt with separately and apart from the
land (Leung Yee vs. Strong Machinery Co., 37 Phil. 644). In the
same manner, this Court has also established that possessory rights
over said properties before title is vested on the grantee, may be
validly transferred or conveyed as in a deed of mortgage (Vda. de
Bautista vs. Marcos, 3 SCRA 438 [1961]).Coming back to the case at
bar, the records show, as aforestated that the original mortgage
deed on the 2-storey semi-concrete residential building with
warehouse and on the right of occupancy on the lot where the
building was erected, was executed on November 19, 1971 and
registered under the provisions of Act 3344 with the Register of
Deeds of Zambales on November 23, 1971. Miscellaneous Sales Patent
No. 4776 on the land was issued on April 24, 1972, on the basis of
which OCT No. 2554 was issued in the name of private respondent
Fernando Magcale on May 15, 1972. It is therefore without question
that the original mortgage was executed before the issuance of the
final patent and before the government was divested of its title to
the land, an event which takes effect only on the issuance of the
sales patent and its subsequent registration in the Office of the
Register of Deeds (Visayan Realty Inc. vs. Meer, 96 Phil. 515;
Director of Lands vs. De Leon, 110 Phil. 28; Director of Lands vs.
Jurado, L-14702, May 23, 1961; Pena "Law on Natural Resources", p.
49). Under the foregoing considerations, it is evident that the
mortgage executed by private respondent on his own building which
was erected on the land belonging to the government is to all
intents and purposes a valid mortgage.As to restrictions expressly
mentioned on the face of respondents' OCT No. P-2554, it will be
noted that Sections 121, 122 and 124 of the Public Land Act, refer
to land already acquired under the Public Land Act, or any
improvement thereon and therefore have no application to the
assailed mortgage in the case at bar which was executed before such
eventuality. Likewise, Section 2 of Republic Act No. 730, also a
restriction appearing on the face of private respondent's title has
likewise no application in the instant case, despite its reference
to encumbrance or alienation before the patent is issued because it
refers specifically to encumbrance or alienation on the land itself
and does not mention anything regarding the improvements existing
thereon.But it is a different matter, as regards the second
mortgage executed over the same properties on May 2, 1973 for an
additional loan of P20,000.00 which was registered with the
Registry of Deeds of Olongapo City on the same date. Relative
thereto, it is evident that such mortgage executed after the
issuance of the sales patent and of the Original Certificate of
Title, falls squarely under the prohibitions stated in Sections
121, 122 and 124 of the Public Land Act and Section 2 of Republic
Act 730, and is therefore null and void.Petitioner points out that
private respondents, after physically possessing the title for five
years, voluntarily surrendered the same to the bank in 1977 in
order that the mortgaged may be annotated, without requiring the
bank to get the prior approval of the Ministry of Natural Resources
beforehand, thereby implicitly authorizing Prudential Bank to cause
the annotation of said mortgage on their title.However, the Court,
in recently ruling on violations of Section 124 which refers to
Sections 118, 120, 122 and 123 of Commonwealth Act 141, has
held:... Nonetheless, we apply our earlier rulings because we
believe that as inpari delictomay not be invoked to defeat the
policy of the State neither may the doctrine of estoppel give a
validating effect to a void contract. Indeed, it is generally
considered that as between parties to a contract, validity cannot
be given to it by estoppel if it is prohibited by law or is against
public policy (19 Am. Jur. 802). It is not within the competence of
any citizen to barter away what public policy by law was to
preserve (Gonzalo Puyat & Sons, Inc. vs. De los Amas and
Alinosupra). ... (Arsenal vs. IAC, 143 SCRA 54 [1986]).This
pronouncement covers only the previous transaction already alluded
to and does not pass upon any new contract between the parties
(Ibid), as in the case at bar. It should not preclude new contracts
that may be entered into between petitioner bank and private
respondents that are in accordance with the requirements of the
law. After all, private respondents themselves declare that they
are not denying the legitimacy of their debts and appear to be open
to new negotiations under the law (Comment; Rollo, pp. 95-96). Any
new transaction, however, would be subject to whatever steps the
Government may take for the reversion of the land in its
favor.PREMISES CONSIDERED, the decision of the Court of First
Instance of Zambales & Olongapo City is hereby MODIFIED,
declaring that the Deed of Real Estate Mortgage for P70,000.00 is
valid but ruling that the Deed of Real Estate Mortgage for an
additional loan of P20,000.00 is null and void, without prejudice
to any appropriate action the Government may take against private
respondents.SO ORDERED.MAKATI LEASING and FINANCE
CORPORATION,petitioner,vs.WEAREVER TEXTILE MILLS, INC., and
HONORABLE COURT OF APPEALS,respondents.Loreto C. Baduan for
petitioner.Ramon D. Bagatsing & Assoc. (collaborating counsel)
for petitioner.Jose V. Mancella for respondent.DE
CASTRO,J.:Petition for review on certiorari of the decision of the
Court of Appeals (now Intermediate Appellate Court) promulgated on
August 27, 1981 in CA-G.R. No. SP-12731, setting aside certain
Orders later specified herein, of Judge Ricardo J. Francisco, as
Presiding Judge of the Court of First instance of Rizal Branch VI,
issued in Civil Case No. 36040, as wen as the resolution dated
September 22, 1981 of the said appellate court, denying
petitioner's motion for reconsideration.It appears that in order to
obtain financial accommodations from herein petitioner Makati
Leasing and Finance Corporation, the private respondent Wearever
Textile Mills, Inc., discounted and assigned several receivables
with the former under a Receivable Purchase Agreement. To secure
the collection of the receivables assigned, private respondent
executed a Chattel Mortgage over certain raw materials inventory as
well as a machinery described as an Artos Aero Dryer Stentering
Range.Upon private respondent's default, petitioner filed a
petition for extrajudicial foreclosure of the properties mortgage
to it. However, the Deputy Sheriff assigned to implement the
foreclosure failed to gain entry into private respondent's premises
and was not able to effect the seizure of the aforedescribed
machinery. Petitioner thereafter filed a complaint for judicial
foreclosure with the Court of First Instance of Rizal, Branch VI,
docketed as Civil Case No. 36040, the case before the lower
court.Acting on petitioner's application for replevin, the lower
court issued a writ of seizure, the enforcement of which was
however subsequently restrained upon private respondent's filing of
a motion for reconsideration. After several incidents, the lower
court finally issued on February 11, 1981, an order lifting the
restraining order for the enforcement of the writ of seizure and an
order to break open the premises of private respondent to enforce
said writ. The lower court reaffirmed its stand upon private
respondent's filing of a further motion for reconsideration.On July
13, 1981, the sheriff enforcing the seizure order, repaired to the
premises of private respondent and removed the main drive motor of
the subject machinery.The Court of Appeals, in certiorari and
prohibition proceedings subsequently filed by herein private
respondent, set aside the Orders of the lower court and ordered the
return of the drive motor seized by the sheriff pursuant to said
Orders, after ruling that the machinery in suit cannot be the
subject of replevin, much less of a chattel mortgage, because it is
a real property pursuant to Article 415 of the new Civil Code, the
same being attached to the ground by means of bolts and the only
way to remove it from respondent's plant would be to drill out or
destroy the concrete floor, the reason why all that the sheriff
could do to enfore the writ was to take the main drive motor of
said machinery. The appellate court rejected petitioner's argument
that private respondent is estopped from claiming that the machine
is real property by constituting a chattel mortgage thereon.A
motion for reconsideration of this decision of the Court of Appeals
having been denied, petitioner has brought the case to this Court
for review by writ of certiorari. It is contended by private
respondent, however, that the instant petition was rendered moot
and academic by petitioner's act of returning the subject motor
drive of respondent's machinery after the Court of Appeals'
decision was promulgated.The contention of private respondent is
without merit. When petitioner returned the subject motor drive, it
made itself unequivocably clear that said action was without
prejudice to a motion for reconsideration of the Court of Appeals
decision, as shown by the receipt duly signed by respondent's
representative.1Considering that petitioner has reserved its right
to question the propriety of the Court of Appeals' decision, the
contention of private respondent that this petition has been mooted
by such return may not be sustained.The next and the more crucial
question to be resolved in this Petition is whether the machinery
in suit is real or personal property from the point of view of the
parties, with petitioner arguing that it is a personality, while
the respondent claiming the contrary, and was sustained by the
appellate court, which accordingly held that the chattel mortgage
constituted thereon is null and void, as contended by said
respondent.A similar, if not Identical issue was raised inTumalad
v. Vicencio,41 SCRA 143 where this Court, speaking through Justice
J.B.L. Reyes, ruled: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 only 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 personality. Finally,
unlike in the Iya cases,Lopez vs. Orosa, Jr. & Plaza Theatre,
Inc. & Leung Yee vs. F.L. Strong Machinery &
Williamson,wherein third persons assailed the validity of the
chattel mortgage, it is the defendants-appellants themselves, as
debtors-mortgagors, who are attacking the validity of the chattel
mortgage in this case. The doctrine of estoppel therefore applies
to the herein defendants-appellants, having treated the subject
house as personality.Examining the records of the instant case, We
find no logical justification to exclude the 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.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.It must be pointed out that the
characterization of the subject machinery as chattel by the private
respondent is indicative of intention and impresses upon the
property the character determined by the parties. As stated
inStandard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is
undeniable that the parties to a contract may by agreement treat as
personal property that which by nature would be real property, as
long as no interest of third parties would be prejudiced
thereby.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 voidab 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,From what has
been said above, the error of the appellate court in ruling that
the questioned machinery is real, not personal property, becomes
very apparent. Moreover, the case ofMachinery and Engineering
Supplies, Inc. v. CA, 96 Phil. 70, heavily relied upon by said
court is not applicable to the case at bar, the nature of the
machinery and equipment involved therein as real properties never
having been disputed nor in issue, and they were not the subject of
a Chattel Mortgage. Undoubtedly, the Tumalad case bears more nearly
perfect parity with the instant case to be the more controlling
jurisprudential authority.WHEREFORE, the questioned decision and
resolution of the Court of Appeals are hereby reversed and set
aside, and the Orders of the lower court are hereby reinstated,
with costs against the private respondent.SO ORDERED.GAVINO A.
TUMALAD and GENEROSA R. TUMALAD,plaintiffs-appellees,vs.ALBERTA
VICENCIO and EMILIANO SIMEON,defendants-appellants.Castillo &
Suck for plaintiffs-appellees.Jose Q. Calingo for
defendants-appellants.REYES, J.B.L.,J.:Case certified to this Court
by the Court of Appeals (CA-G.R. No. 27824-R) for the reason that
only questions of law are involved.This case was originally
commenced by defendants-appellants in the municipal court of Manila
in Civil Case No. 43073, for ejectment. Having lost therein,
defendants-appellants appealed to the court a quo (Civil Case No.
30993) which also rendered a decision against them, the dispositive
portion of which follows:WHEREFORE, the court hereby renders
judgment in favor of the plaintiffs and against the defendants,
ordering the latter to pay jointly and severally the former a
monthly rent of P200.00 on the house, subject-matter of this
action, from March 27, 1956, to January 14, 1967, with interest at
the legal rate from April 18, 1956, the filing of the complaint,
until fully paid, plus attorney's fees in the sum of P300.00 and to
pay the costs.It appears on the records that on 1 September 1955
defendants-appellants executed a chattel mortgage in favor of
plaintiffs-appellees over their house of strong materials located
at No. 550 Int. 3, Quezon Boulevard, Quiapo, Manila, over Lot Nos.
6-B and 7-B, Block No. 2554, which were being rented from Madrigal
& Company, Inc. The mortgage was registered in the Registry of
Deeds of Manila on 2 September 1955. The herein mortgage was
executed to guarantee a loan of P4,800.00 received from
plaintiffs-appellees, payable within one year at 12% per annum. The
mode of payment was P150.00 monthly, starting September, 1955, up
to July 1956, and the lump sum of P3,150 was payable on or before
August, 1956. It was also agreed that default in the payment of any
of the amortizations, would cause the remaining unpaid balance to
becomeimmediately due and Payable and the Chattel Mortgage will be
enforceable in accordance with the provisions of Special Act No.
3135, and for this purpose, the Sheriff of the City of Manila or
any of his deputies is hereby empowered and authorized to sell all
the Mortgagor's property after the necessary publication in order
to settle the financial debts of P4,800.00, plus 12% yearly
interest, and attorney's fees...2When defendants-appellants
defaulted in paying, the mortgage was extrajudicially foreclosed,
and on 27 March 1956, the house was sold at public auction pursuant
to the said contract. As highest bidder, plaintiffs-appellees were
issued the corresponding certificate of sale.3Thereafter, on 18
April 1956, plaintiffs-appellant commenced Civil Case No. 43073 in
the municipal court of Manila, praying, among other things, that
the house be vacated and its possession surrendered to them, and
for defendants-appellants to pay rent of P200.00 monthly from 27
March 1956 up to the time the possession is surrendered.4On 21
September 1956, the municipal court rendered its decision ...
ordering the defendants to vacate the premises described in the
complaint; ordering further to pay monthly the amount of P200.00
from March 27, 1956, until such (time that) the premises is (sic)
completely vacated; plus attorney's fees of P100.00 and the costs
of the suit.5Defendants-appellants, in their answers in both the
municipal court and courta quoimpugned the legality of the chattel
mortgage, claiming that they are still the owners of the house; but
they waived the right to introduce evidence, oral or documentary.
Instead, they relied on their memoranda in support of their motion
to dismiss, predicated mainly on the grounds that: (a) the
municipal court did not have jurisdiction to try and decide the
case because (1) the issue involved, is ownership, and (2) there
was no allegation of prior possession; and (b) failure to prove
prior demand pursuant to Section 2, Rule 72, of the Rules of
Court.6During the pendency of the appeal to the Court of First
Instance, defendants-appellants failed to deposit the rent for
November, 1956 within the first 10 days of December, 1956 as
ordered in the decision of the municipal court. As a result, the
court granted plaintiffs-appellees' motion for execution, and it
was actually issued on 24 January 1957. However, the judgment
regarding the surrender of possession to plaintiffs-appellees could
not be executed because the subject house had been already
demolished on 14 January 1957 pursuant to the order of the court in
a separate civil case (No. 25816) for ejectment against the present
defendants for non-payment of rentals on the land on which the
house was constructed.The motion of plaintiffs for dismissal of the
appeal, execution of the supersedeas bond and withdrawal of
deposited rentals was denied for the reason that the liability
therefor was disclaimed and was still being litigated, and under
Section 8, Rule 72, rentals deposited had to be held until final
disposition of the appeal.7On 7 October 1957, the appellate court
of First Instance rendered its decision, the dispositive portion of
which is quoted earlier. The said decision was appealed by
defendants to the Court of Appeals which, in turn, certified the
appeal to this Court. Plaintiffs-appellees failed to file a brief
and this appeal was submitted for decision without
it.Defendants-appellants submitted numerous assignments of error
which can be condensed into two questions, namely: .(a) Whether the
municipal court from which the case originated had jurisdiction to
adjudicate the same;(b) Whether the defendants are, under the law,
legally bound to pay rentals to the plaintiffs during the period of
one (1) year provided by law for the redemption of the
extrajudicially foreclosed house.We will consider these
questionsseriatim.(a) Defendants-appellants mortgagors question the
jurisdiction of the municipal court from which the case originated,
and consequently, the appellate jurisdiction of the Court of First
Instancea quo, on the theory that the chattel mortgage is voidab
initio; whence it would follow that the extrajudicial foreclosure,
and necessarily the consequent auction sale, are also void. Thus,
the ownership of the house still remained with
defendants-appellants who are entitled to possession and not
plaintiffs-appellees. Therefore, it is argued by
defendants-appellants, the issue of ownership will have to be
adjudicated first in order to determine possession. lt is contended
further that ownership being in issue, it is the Court of First
Instance which has jurisdiction and not the municipal
court.Defendants-appellants predicate their theory of nullity of
the chattel mortgage on two grounds, which are: (a) that, their
signatures on the chattel mortgage were obtained through fraud,
deceit, or trickery; and (b) that the subject matter of the
mortgage is a house of strong materials, and, being an immovable,
it can only be the subject of a real estate mortgage and not a
chattel mortgage.On the charge of fraud, deceit or trickery, the
Court of First Instance found defendants-appellants' contentions as
not supported by evidence and accordingly dismissed the
charge,8confirming the earlier finding of the municipal court that
"the defense of ownership as well as the allegations of fraud and
deceit ... are mere allegations."9It has been held in Supia
andBatiaco vs. Quintero and Ayala10that "the answer is a mere
statement of the facts which the party filing it expects to
prove,but it is not evidence;11and further, that when the question
to be determined is one of title, the Court is given the authority
to proceed with the hearing of the cause until this fact is clearly
established. In the case ofSy vs. Dalman,12wherein the defendant
was also a successful bidder in an auction sale, it was likewise
held by this Court that in detainer cases the aim of ownership "is
a matter of defense and raises an issue of fact which should be
determined from the evidence at the trial." What determines
jurisdiction are the allegations or averments in the complaint and
the relief asked for.13Moreover, even granting that the charge is
true, fraud or deceit does not render a contract voidab initio, and
can only be a ground for rendering the contract voidable or
annullable pursuant to Article 1390 of the New Civil Code, by a
proper action in court.14There is nothing on record to show that
the mortgage has been annulled. Neither is it disclosed that steps
were taken to nullify the same. Hence, defendants-appellants' claim
of ownership on the basis of a voidable contract which has not been
voided fails.It is claimed in the alternative by
defendants-appellants that even if there was no fraud, deceit or
trickery, the chattel mortgage was still null and voidab
initiobecause only personal properties can be subject of a chattel
mortgage. The rule about the status of buildings as immovable
property is stated inLopez vs. Orosa, Jr. and Plaza Theatre
Inc.,15cited inAssociated Insurance Surety Co., Inc. vs. Iya, et
al.16to the effect that ... 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 thata building is by itself an immovable
propertyirrespective of whether or not said structure and the land
on which it is adhered to belong to the same owner.Certain
deviations, however, have been allowed for various reasons. In the
case ofManarang and Manarang vs. Ofilada,17this 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", citingStandard Oil Company of New York vs.
Jaramillo.18In the latter case, the mortgagor conveyed and
transferred to the mortgagee by way of mortgage "the following
describedpersonal property."19The "personal property" consisted of
leasehold rights and a building. Again, in the case ofLuna vs.
Encarnacion,20the subject of the contract designated as Chattel
Mortgage was a house of mixed materials, and this Court hold
therein that it was a valid Chattel mortgage because it was
soexpressly designatedand specifically that the property given as
security "is a house of mixed materials, which by its very nature
is considered personal property." In the later case ofNavarro vs.
Pineda,21this Court stated that 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" (Evangelista vs. Alto Surety, No. L-11139,
23 April 1958). In a case, a mortgaged house built on arented
landwas held to be a personal property, not only because the deed
of mortgage considered it as such, but also because it did not form
part of the land (Evangelists vs. Abad, [CA]; 36 O.G. 2913), for it
is now settled that an object placed on land by one who had only a
temporary right to the same, such as the lessee or usufructuary,
does not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co., Inc. vs.
Castillo,et al., 61 Phil. 709). 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. (Evangelista vs. Abad,Supra.)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. (Ladera
vs. C.N. Hodges, [CA] 48 O.G. 5374):22In the contract now before
Us, the house on rented land is not only expressly designated as
Chattel Mortgage; it specifically provides that "the mortgagor ...
voluntarily CEDES, SELLS and TRANSFERSby way of Chattel
Mortgage23the property together with its leasehold rights over the
lot on which it is constructed and participation ..."24Although
there is no specific statement referring to the subject house as
personal property, yet by ceding, selling or transferring a
propertyby way of chattel mortgagedefendants-appellants could only
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 defendats-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. Finally unlike in the Iya cases,Lopez vs.
Orosa, Jr. and Plaza Theatre, Inc.25andLeung Yee vs. F. L. Strong
Machinery and Williamson,26whereinthird personsassailed the
validity of the chattel mortgage,27it is the defendants-appellants
themselves, as debtors-mortgagors, who are attacking the validity
of the chattel mortgage in this case. The doctrine of estoppel
therefore applies to the herein defendants-appellants, having
treated the subject house as personalty.(b) Turning to the question
of possession and rentals of the premises in question. The Court of
First Instance noted in its decision that nearly a year after the
foreclosure sale the mortgaged house had been demolished on 14 and
15 January 1957 by virtue of a decision obtained by the lessor of
the land on which the house stood. For this reason, the said court
limited itself to sentencing the erstwhile mortgagors to pay
plaintiffs a monthly rent of P200.00 from 27 March 1956 (when the
chattel mortgage was foreclosed and the house sold) until 14
January 1957 (when it was torn down by the Sheriff), plus P300.00
attorney's fees.Appellants mortgagors question this award, claiming
that they were entitled to remain in possession without any
obligation to pay rent during the one year redemption period after
the foreclosure sale, i.e., until 27 March 1957. On this issue, We
must rule for the appellants.Chattel mortgages are covered and
regulated by the Chattel Mortgage Law, Act No. 1508.28Section 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.29In the instant case, the parties
specifically stipulated that "the chattel mortgage will
beenforceable in accordance with the provisions of Special Act No.
3135... ."30(Emphasis supplied).Section 6 of the Act referred
to31provides that the debtor-mortgagor (defendants-appellants
herein) may, at any time within one year from and after the date of
the auction sale, redeem the property sold at the extra judicial
foreclosure sale. Section 7 of the same Act32allows 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.33In the absence of such a
compliance, as in the instant case, 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 Court34which also applies to properties purchased
in extrajudicial foreclosure proceedings.35Construing the said
section, this Court stated in the aforestated case ofReyes vs.
Hamada.In other words, before the expiration of the 1-year period
within which the judgment-debtor or mortgagor may redeem the
property, the purchaser thereof is not entitled, as a matter of
right, to possession of the same. Thus, 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 judgment-debtor ormortgagor 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 of 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. (Emphasis supplied)The
Hamada case reiterates the previous ruling inChan vs. Espe.36Since
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.It will be noted further that in the
case at bar the period of redemption had not yet expired when
action was instituted in the court of origin, and that
plaintiffs-appellees did not choose to take possession under
Section 7, Act No. 3135, as amended, which is the law selected by
the parties to govern the extrajudicial foreclosure of the chattel
mortgage. Neither was there an allegation to that effect. Since
plaintiffs-appellees' right to possess was not yet born at the
filing of the complaint, there could be no violation or breach
thereof. Wherefore, the original complaint stated no cause of
action and was prematurely filed. For this reason, the same should
be ordered dismissed, even if there was no assignment of error to
that effect. The Supreme Court is clothed with ample authority to
review palpable errors not assigned as such if it finds that their
consideration is necessary in arriving at a just decision of the
cases.37It follows that the court below erred in requiring the
mortgagors to pay rents for the year following the foreclosure
sale, as well as attorney's fees.FOR THE FOREGOING REASONS, the
decision appealed from is reversed and another one entered,
dismissing the complaint. With costs against
plaintiffs-appellees.SERGS PRODUCTS, INC., and SERGIO T.
GOQUIOLAY,petitioners,vs.PCI LEASING AND FINANCE, INC.,respondent.D
E C I S I O NPANGANIBAN,J.:After agreeing to a contract stipulating
that a real or immovable property be considered as personal or
movable, a party is estopped from subsequently claiming
otherwise.Hence, such property is a proper subject of a writ of
replevin obtained by the other contracting party.The CaseBefore us
is a Petition for Review on Certiorari assailing the January 6,
1999 Decision[1]of the Court of Appeals (CA)[2]in CA-GR SP No.
47332 and its February 26, 1999 Resolution[3]denying
reconsideration.The decretal portion of the CA Decision reads as
follows:WHEREFORE, premises considered, the assailed Order dated
February 18, 1998 and Resolution dated March 31, 1998 in Civil Case
No. Q-98-33500 are herebyAFFIRMED.The writ of preliminary
injunction issued on June 15, 1998 is herebyLIFTED.[4]In its
February 18, 1998 Order,[5]the Regional Trial Court (RTC) of Quezon
City (Branch 218)[6]issued a Writ of Seizure.[7]The March 18, 1998
Resolution[8]denied petitioners Motion for Special Protective
Order, praying that the deputy sheriff be enjoined from seizing
immobilized or other real properties in (petitioners) factory in
Cainta, Rizal and to return to their original place whatever
immobilized machineries or equipments he may have removed.[9]The
FactsThe undisputed facts are summarized by the Court of Appeals as
follows:[10]On February 13, 1998, respondent PCI Leasing and
Finance, Inc. (PCI Leasing for short) filed with the RTC-QC a
complaint for [a] sum of money (Annex E), with an application for a
writ of replevin docketed as Civil Case No. Q-98-33500.On March 6,
1998, upon an ex-parte application of PCI Leasing, respondent judge
issued a writ of replevin (Annex B) directing its sheriff to seize
and deliver the machineries and equipment to PCI Leasing after 5
days and upon the payment of the necessary expenses.On March 24,
1998, in implementation of said writ, the sheriff proceeded to
petitioners factory, seized one machinery with [the] word that he
[would] return for the other machineries.On March 25, 1998,
petitioners filed a motion for special protective order (Annex C),
invoking the power of the court to control the conduct of its
officers and amend and control its processes, praying for a
directive for the sheriff to defer enforcement of the writ of
replevin.This motion was opposed by PCI Leasing (Annex F), on the
ground that the properties [were] still personal and therefore
still subject to seizure and a writ of replevin.In their Reply,
petitioners asserted that the properties sought to be seized [were]
immovable as defined in Article 415 of the Civil Code, the parties
agreement to the contrary notwithstanding.They argued that to give
effect to the agreement would be prejudicial to innocent third
parties.They further stated that PCI Leasing [was] estopped from
treating these machineries as personal because the contracts in
which the alleged agreement [were] embodied [were] totally sham and
farcical.On April 6, 1998, the sheriff again sought to enforce the
writ of seizure and take possession of the remaining properties.He
was able to take two more, but was prevented by the workers from
taking the rest.On April 7, 1998, they went to [the CA] via an
original action for certiorari.Ruling of the Court of AppealsCiting
the Agreement of the parties, the appellate court held that the
subject machines were personal property, and that they had only
been leased, not owned, by petitioners.It also ruled that the words
of the contract are clear and leave no doubt upon the true
intention of the contracting parties.Observing that Petitioner
Goquiolay was an experienced businessman who was not unfamiliar
with the ways of the trade,it ruled that he should have realized
the import of the document he signed.The CA further
held:Furthermore, to accord merit to this petition would be to
preempt the trial court in ruling upon the case below, since the
merits of the whole matter are laid down before us via a petition
whose sole purpose is to inquire upon the existence of a grave
abuse of discretion on the part of the [RTC] in issuing the
assailed Order and Resolution.The issues raised herein are proper
subjects of a full-blown trial, necessitating presentation of
evidence by both parties.The contract is being enforced by one, and
[its] validity is attacked by the other a matter x x x which
respondent court is in the best position to determine.Hence, this
Petition.[11]The IssuesIn their Memorandum, petitioners submit the
following issues for our consideration:A. Whether or not the
machineries purchased and imported by SERGS became real property by
virtue of immobilization.B. Whether or not the contract between the
parties is a loan or a lease.[12]In the main, the Court will
resolve whether the said machines are personal, not immovable,
property which may be a proper subject of a writ of replevin.As a
preliminary matter, the Court will also address briefly the
procedural points raised by respondent.The Courts RulingThe
Petition is not meritorious.Preliminary Matter:Procedural
QuestionsRespondent contends that the Petition failed to indicate
expressly whether it was being filed under Rule 45 or Rule 65 of
the Rules of Court.It further alleges that the Petition erroneously
impleadedJudge Hilario Laqui as respondent.There is no question
that the present recourse is under Rule 45.This conclusion finds
support in the very title of the Petition, which is Petition for
Review on Certiorari.[13]While Judge Laqui should not have been
impleaded as a respondent,[14]substantial justice requires that
such lapse by itself should not warrant the dismissal of the
present Petition.In this light, the Court deems it proper to
remove,motu proprio, the name of Judge Laqui from the caption of
the present case.Main Issue:Nature of the Subject
MachineryPetitioners contend that the subject machines used in
their factory were not proper subjects of the Writ issued by the
RTC, because they were in fact real property.Serious policy
considerations, they argue, militate against a contrary
characterization.Rule 60 of the Rules of Court provides that writs
of replevin are issued for the recovery of personal property
only.[15]Section 3 thereof reads:SEC. 3.Order.-- Upon the filing of
such affidavit and approval of the bond, the court shall issue an
order and the corresponding writ of replevin describing the
personal property alleged to be wrongfully detained and requiring
the sheriff forthwith to take such property into his custody.On the
other hand, Article 415 of the Civil Code enumerates immovable or
real property as follows:ART. 415.The following are immovable
property:x x x....................................x x
x....................................x x x(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;x x
x....................................x x
x....................................x x xIn the present case, the
machines that were the subjects of the Writ of Seizure were placed
by petitioners in the factory built on their own land.Indisputably,
they were essential and principal elements of their
chocolate-making industry.Hence, although each of them was movable
or personal property on its own, all of them have become
immobilized by destination because they are essential and principal
elements in the industry.[16]In that sense, petitioners are correct
in arguing that the said machines are real, not personal, property
pursuant to Article 415 (5) of the Civil Code.[17]Be that as it
may, we disagree with the submission of the petitioners that the
said machines are not proper subjects of the Writ of Seizure.The
Court has held that contracting parties may validly stipulate that
a real property be consideredas personal.[18]After agreeing to such
stipulation, they are consequently estopped from claiming
otherwise.Under the principle of estoppel, a party to a contract is
ordinarily precluded from denying the truth of any material fact
found therein.Hence, inTumalad v. Vicencio,[19]the Court upheld the
intention of the parties to treat ahouseas a personal
propertybecause it had been made the subject of a chattel
mortgage.The Court ruled:x x x.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 only 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.ApplyingTumalad,the Court inMakati
Leasing and Finance Corp. v. Wearever Textile Mills[20]also held
that the machinery used in a factory and essential to the industry,
as in the present case, was a proper subject of a writ of replevin
because it was treated as personal property in a contract.Pertinent
portions of the Courts ruling are reproduced hereunder:x x x.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.In the present case, the Lease
Agreement clearly provides that the machines in question are to be
consideredas personal property.Specifically, Section 12.1 of the
Agreement reads as follows:[21]12.1The PROPERTY is, and shall at
all times be and remain, personal property notwithstanding that the
PROPERTY or any part thereof may now be, or hereafter become, in
any manner affixed or attached to or embedded in, or permanently
resting upon, real property or any building thereon, or attached in
any manner to what is permanent.Clearly then, petitioners are
estopped from denying the characterization of the subject machines
as personal property.Under the circumstances, they are proper
subjects of the Writ of Seizure.It should be stressed, however,
that our holding -- that the machines should be deemed personal
property pursuant to the Lease Agreement is good only insofar as
the contracting parties are concerned.[22]Hence, while the parties
are bound by the Agreement, third persons acting in good faith are
not affected by its stipulation characterizing the subject
machinery as personal.[23]In any event, there is no showing that
any specific third party would be adversely affected.Validity of
the Lease AgreementIn their Memorandum, petitioners contend that
the Agreement is a loan and not a lease.[24]Submitting documents
supposedly showing that they own the subject machines, petitioners
also argue in their Petition that the Agreement suffers from
intrinsic ambiguity which places in serious doubt the intention of
the parties and the validity of the lease agreement itself.[25]In
their Reply to respondents Comment, they further allege that the
Agreement is invalid.[26]These arguments are unconvincing.The
validity and the nature of the contract are thelis motaof the civil
action pending before the RTC.A resolution of these questions,
therefore, is effectively a resolution of the merits of the
case.Hence, they should be threshed out in the trial, not in the
proceedings involving the issuance of the Writ of Seizure.Indeed,
inLa Tondea Distillers v. CA,[27]the Court explained that the
policy under Rule 60 was that questions involving title to the
subject property questions which petitioners are now raising
--should be determined in the trial.In that case, the Court noted
that the remedy of defendants under Rule 60 was either to post a
counter-bond or to question the sufficiency of the plaintiffs
bond.They were not allowed, however, to invoke the title to the
subject property.The Court ruled:In other words, the law does not
allow the defendant to file a motion to dissolve or discharge the
writ of seizure (or delivery) on ground of insufficiency of the
complaint or of the grounds relied upon therefor, as in proceedings
on preliminary attachment or injunction, and thereby put at issue
the matter of the title or right of possession over the specific
chattel being replevied, the policy apparently being that said
matter should be ventilated and determined only at the trial on the
merits.[28]Besides, these questions require a determination of
facts and a presentation of evidence, both of which have no place
in a petition for certiorari in the CA under Rule 65 or in a
petition for review in this Court under Rule 45.[29]Reliance on the
Lease AgreementIt should be pointed out that the Court in this case
may rely on the Lease Agreement, fornothing on record shows that it
has been nullified or annulled.In fact, petitioners assailed it
first only in the RTC proceedings, which had ironically been
instituted by respondent.Accordingly, it must be presumed valid and
binding as the law between the parties.Makati Leasing and Finance
Corporation[30]is also instructive on this point.In that case, the
Deed of Chattel Mortgage, which characterized the subject machinery
as personal property, was also assailed because respondent had
allegedly been required to sign a printed form of chattel mortgage
which was in a blank form at the time of signing.The Court rejected
the argument and relied on the Deed, ruling as follows:x x
x.Moreover, even granting that the charge is true, such fact alone
does not render a contract voidab 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. x x xAlleged Injustice Committed on the Part of
PetitionersPetitioners contend that if the Court allows these
machineries to be seized, then its workers would be out of work and
thrown into the streets.[31]They also allege that the seizure would
nullify all efforts to rehabilitate the corporation.Petitioners
arguments do not preclude the implementation of the Writ.As earlier
discussed, law and jurisprudence support its propriety.Verily, the
above-mentioned consequences, if they come true, should not be
blamed on this Court, but on the petitioners for failing to avail
themselves of the remedy under Section 5 of Rule 60, which allows
the filing of a counter-bond.The provision states:SEC. 5.Return of
property. --If the adverse party objects to the sufficiency of the
applicants bond, or of the surety or sureties thereon, he cannot
immediately require the return of the property, but if he does not
so object, he may, at any time before the delivery of the property
to the applicant, require the return thereof, by filing with the
court where the action is pending a bond executed to the applicant,
in double the value of the property as stated in the applicants
affidavit for the delivery thereof to the applicant, if such
delivery be adjudged, and for the payment of such sum to him as may
be recovered against the adverse party, and by serving a copy bond
on the applicant.WHEREFORE, the Petition isDENIEDand the assailed
Decision of the Court of AppealsAFFIRMED.Costs against
petitioners.JULIAN S. YAP,petitioner,vs.HON. SANTIAGO O. TAADA,
etc., and GOULDS PUMPS INTERNATIONAL (PHIL.),
INC.,respondents.Paterno P. Natinga for private
respondent.NARVASA,J.:The petition for review on certiorari at bar
involves two (2) Orders of respondent Judge Taada1in Civil Case No.
10984. The first, dated September 16, 1970, denied petitioner Yap's
motion to set aside execution sale and to quash alias writ of
execution. The second, dated November 21, 1970, denied Yap's motion
for reconsideration. The issues concerned the propriety of
execution of a judgment claimed to be "incomplete, vague and
non-final," and the denial of petitioner's application to prove and
recover damages resulting from alleged irregularities in the
process of execution.The antecedents will take some time in the
telling. The case began in the City Court of Cebu with the filing
by Goulds Pumps International (Phil.), Inc. of a complaint2against
Yap and his wife3seeking recovery of P1,459.30 representing the
balance of the price and installation cost of a water pump in the
latter's premises.4The case resulted in a judgment by the City
Court on November 25, 1968, reading as follows:When this case was
called for trial today, Atty. Paterno Natinga appeared for the
plaintiff Goulds and informed the court that he is ready for trial.
However, none of the defendants appeared despite notices having
been served upon them.Upon petition Atty. Natinga, the plaintiff is
hereby allowed to present its evidence ex-parte.After considering
the evidence of the plaintiff, the court hereby renders judgment in
favor of the plaintiff and against the defendant (Yap), ordering
the latter to pay to the former the sum of Pl,459.30 with interest
at the rate of 12% per annum until fully paid, computed from August
12, 1968, date of the filing of the complaint; to pay the sum of
P364.80 as reasonable attorney's fees, which is equivalent " to 25%
of the unpaid principal obligation; and to pay the costs, if
any.Yap appealed to the Court of First Instance. The appeal was
assigned to thesalaof respondent Judge Taada. For failure to appear
for pre-trial on August 28, 1968, this setting being intransferable
since the pre-trial had already been once postponed at his
instance,5Yap was declared in default by Order of Judge Taada dated
August 28, 1969,6reading as follows:When this case was called for
pre-trial this morning, the plaintiff and counsel appeared, but
neither the defendants nor his counsel appeared despite the fact
that they were duly notified of the pre-trial set this morning.
Instead he filed an Ex-Parte Motion for Postponement which this
Court received only this morning, and on petition of counsel for
the plaintiff that the Ex-Parte Motion for Postponement was not
filed in accordance with the Rules of Court he asked that the same
be denied and the defendants be declared in default; .. the motion
for the plaintiff being well- grounded, the defendants are hereby
declared in default and the Branch Clerk of Court ..is hereby
authorized to receive evidence for the plaintiff and .. submit his
report within ten (10) days after reception of evidence.Goulds
presented evidenceex parteand judgment by default was rendered the
following day by Judge Taada requiring Yap to pay to Goulds (1)
Pl,459.30 representing the unpaid balance of the pump purchased by
him; (2) interest of 12% per annum thereon until fully paid; and
(3) a sum equivalent to 25% of the amount due as attorney's fees
and costs and other expenses in prosecuting the action. Notice of
the judgment was served on Yap on September 1, 1969.7On September
16, 1969 Yap filed a motion for reconsideration.8In it he insisted
that his motion for postponement should have been granted since it
expressed his desire to explore the possibility of an amicable
settlement; that the court should give the parties time to arrive
at an amicable settlement failing which, he should be allowed to
present evidence in support of his defenses (discrepancy as to the
price and breach of warranty). The motion was not verified or
accompanied by any separate affidavit. Goulds opposed the motion.
Its opposition9drew attention to the eleventh-hour motion for
postponement of Yap which had resulted in the cancellation of the
prior hearing of June 30, 1969 despite Goulds' vehement objection,
and the re-setting thereof on August 28, 1969 with intransferable
character; it averred that Yap had again sought postponement of
this last hearing by another eleventh-hour motion on the plea that
an amicable settlement would be explored, yet he had never up to
that time ever broached the matter,10and that this pattern of
seeking to obtain last-minute postponements was discernible also in
the proceedings before the City Court. In its opposition, Goulds
also adverted to the examination made by it of the pump, on
instructions of the City Court, with a view to remedying the
defects claimed to exist by Yap; but the examination had disclosed
the pump's perfect condition. Yap's motion for reconsideration was
denied by Order dated October 10, 1969, notice of which was
received by Yap on October 4, 1969.11On October 15, 1969 Judge
Taada issued an Order granting Goulds' Motion for Issuance of Writ
of Execution dated October 14, 1969, declaring the reasons therein
alleged to be meritorious.12Yap forthwith filed an "Urgent Motion
for Reconsideration of Order" dated October 17, 1969,13contending
that the judgment had not yet become final, since contrary to
Goulds' view, his motion for reconsideration was notpro formafor
lack of an affidavit of merit, this not being required under
Section 1 (a) of Rule 37 of the Rules of Court upon which his
motion was grounded. Goulds presented an opposition dated October
22, 1969.14It pointed out that in his motion for reconsideration
Yap had claimed to have a valid defense to the action, i.e., "..
discrepancy as to price and breach of seller's warranty," in
effect, that there was fraud on Goulds' paint; Yap's motion for
reconsideration should therefore have been supported by an
affidavit of merit respecting said defenses; the absence thereof
rendered the motion for reconsideration fatally defective with the
result that its filing did not interrupt the running of the period
of appeal. The opposition also drew attention to the failure of the
motion for reconsideration to specify the findings or conclusions
in the judgment claimed to be contrary to law or not supported by
the evidence, making it apro formamotion also incapable of stopping
the running of the appeal period. On October 23, 1969, Judge Taada
denied Yap's motion for reconsideration and authorized execution of
the judgment.15Yap sought reconsideration of this order, by another
motion dated October 29, 1969.16This motion was denied by Order
dated January 26, 1970.17Again Yap moved for reconsideration, and
again was rebuffed, by Order dated April 28, 1970.18In the meantime
the Sheriff levied on the water pump in question,19and by notice
dated November 4, 1969, scheduled the execution sale thereof on
November 14, 1969.20But in view of the pendency of Yap's motion for
reconsideration of October 29, 1969, suspension of the sale was
directed by Judge Taada in an order dated November 6,
1969.21Counsel for the plaintiff is hereby given 10 days time to
answer the Motion, dated October 29, 1969, from receipt of this
Order and in the meantime, the Order of October 23, 1969, insofar
as it orders the sheriff to enforce the writ of execution is hereby
suspended.It appears however that a copy of this Order was not
transmitted to the Sheriff "through oversight, inadvertence and
pressure of work" of the Branch Clerk of Court.22So the Deputy
Provincial Sheriff went ahead with the scheduled auction sale and
sold the property levied on to Goulds as the highest bidder.23He
later submitted the requisite report to the Court dated November
17, 1969,24as well as the "Sheriffs Return of Service" dated
February 13, 1970,25in both of which it was stated that execution
had been "partially satisfied."It should be observed that up to
this time, February, 1970, Yap had not bestirred himself to take an
appeal from the judgment of August 29, 1969.On May 9, 1970 Judge
Taada ordered the issuance of an alias writ of execution on
Gould'sex partemotion therefor.26Yap received notice of the Order
on June 11. Twelve (1 2) days later, he filed a "Motion to Set
Aside Execution Sale and to QuashAliasWrit of Execution."27As
regards theoriginal,partial execution of the judgment, he argued
that 1) "the issuance of the writ of execution on October 16, 1969
was contrary to law, the judgment sought to be executed not being
final and executory;" and2) "the sale was made without the notice
required by Sec. 18, Rule 39, of the New Rules of Court," i.e.,
notice by publication in case of execution sale of real property,
the pump and its accessories being immovable because attached to
the ground with character of permanency (Art. 415, Civil Code).And
with respect to thealiaswrit, he argued that it should not have
issued because 1) "the judgment sought to be executed is null and
void" as "it deprived the defendant of his day in court" and "of
due process;"2) "said judgment is incomplete and vague" because
there is no starting point for computation of the interest imposed,
or a specification of the "other expenses incurred in prosecuting
this case" which Yap had also been ordered to pay;3) "said judgment
is defective because it contains no statement of facts but a mere
recital of the evidence; and4) "there has been a change in the
situation of the parties which makes execution unjust and
inequitable" because Yap suffered damages by reason of the illegal
execution.Goulds filed an opposition on July 6, 1970. Yap's motion
was thereafter denied by Order dated September 16, 1970. Judge
Taada pointed out that the motion had "become moot and academic"
since the decision of August 29, 1969, "received by the defendant
on September 1, 1969 had long become final when the Order for the
Issuance of a Writ of Execution was promulgated on October 15,
1969." His Honor also stressed that The defendant's Motion for
Reconsideration of the Courts decision was in reality one for new
trial. Regarded as motion for new trial it should allege the
grounds for new trial, provided for in the Rules of Court, to be
supported by affidavit of merits; and this the defendant failed to
do. If the defendant sincerely desired for an opportunity to submit
to an amicable settlement, which he failed to do extra judicially
despite the ample time before him, he should have appeared in the
pre- trial to achieve the same purpose.Judge Taada thereafter
promulgated another Order dated September 21, 1970 granting a
motion of Goulds for completion of execution of the judgment of
August 29, 1969 to be undertaken by the City Sheriff of Cebu. Once
more, Yap sought reconsideration. He submitted a "Motion for
Reconsideration of Two Orders" dated October 13, 1970,28seeking the
setting aside not only of this Order of September 21, 1970 but also
that dated September 16, 1970, denying his motion to set aside
execution dated June 23, 1970. He contended that the Order of
September 21, 1970 (authorizing execution by the City Sheriff) was
premature,since the 30-day period to appeal from the earlier order
of September 16, 1970 (denying his motion to set aside) had not yet
expired.He also reiterated his view that his motion for
reconsideration dated September 15, 1969 did not require that it be
accompanied by an affidavit of merits. This last motion was also
denied for "lack of merits," by Order dated November 21, 1970.29On
December 3, 1970, Yap filed a "Notice of Appeal" manifesting his
intention to appeal to the Supreme Court on certiorari only on
questions of law, "from the Order ... of September 16, 1970 ... and
from the Order ... of November 21, 1970, ... pursuant to sections 2
and 3 of Republic Act No. 5440." He filed his petition for review
with this Court on January 5, 1971, after obtaining an extension
therefor.30The errors of law he attributes to the Courta quoare the
following:311) refusing to invalidate the execution pursuant to its
Order of October 16, 1969 although the judgment had not then become
final and executory and despite its being incomplete and vague;2)
ignoring the fact that the execution sale was carried out although
it (the Court) had itself ordered suspension of execution on
November 6, 1969;3) declining to annul the execution sale of the
pump and accessories subject of the action although made without
the requisite notice prescribed for the sale of immovables; and4)
refusing to allow the petitioner to prove irregularities in the
process of execution which had resulted in damages to him.Notice of
the Trial Court's judgment was served on Yap on September 1, 1969.
His motion for reconsideration thereof was filed 15 days
thereafter, on September 16, 1969. Notice of the Order denying the
motion was received by him on October 14, 1969. The question is
whether or not the motion for reconsideration which was not
verified, or accompanied by an affidavit of merits (setting forth
facts constituting his meritorious defenses to the suit) or other
sworn statement (stating facts excusing his failure to appear at
the pre-trial waspro formaand consequently had not interrupted the
running of the period of appeal. It is Yap's contention that his
motion was notpro formafor lack of an affidavit of merits, such a
document not being required by Section 1 (a) of Rule 37 of the
Rules of Court upon which his motion was based. This is
incorrect.Section 2, Rule 37 precisely requires that when the
motion for new trial is founded on Section 1 (a), it should be
accompanied by an affidavit of merit.xxx xxx xxxWhen the motion is
made for the causes mentioned in subdivisions (a) and (b) of the
preceding section, it shall be proved in the manner provided for
proof of motions.Affidavit or affidavits of merits shall also be
attached to a motion for the cause mentioned in subdivision
(a)which may be rebutted by counter-affidavits.xxx xxx xxx32Since
Yap himself asserts that his motion for reconsideration is grounded
on Section 1 (a) of Rule 37,33i.e., fraud, accident, mistake or
excusable negligence which ordinary prudence could not have guarded
against and by reason of which ... (the) aggrieved party has
probably been impaired in his rights" this being in any event clear
from a perusal of the motion which theorizes that he had "been
impaired in his rights" because he was denied the right to present
evidence of his defenses (discrepancy as to price and breach of
warranty) it was a fatal omission to fail to attach to his motion
an affidavit of merits, i.e., an affidavit "showing the facts (not
conclusions) constituting the valid x x defense which the movant
may prove in case a new trial is granted."34The requirement of such
an affidavit is essential because obviously "a new trial would be a
waste of the court's time if the complaint turns out to be
groundless or the defense ineffective."35In his motion for
reconsideration, Yap also contended that since he had expressed a
desire to explore the possibility of an amicable settlement, the
Court should have given him time to do so, instead of declaring him
in default and thereafter rendering judgment by default on
Gould'sex parteevidence.Thebona fidesof this desire to compromise
is however put in doubt by the attendant circumstances. It was
manifested in an eleventh-hour motion for postponement of the
pre-trial which had been scheduled with intransferable character
since it had already been earlier postponed at Yap's instance; it
had never been mentioned at any prior time since commencement of
the litigation; such a possible compromise (at least in general or
preliminary terms) was certainly most appropriate for consideration
at the pre-trial; in fact Yap was aware that the matter was indeed
a proper subject of a pre-trial agenda, yet he sought to avoid
appearance at said pre-trial which he knew to be intransferable in
character. These considerations and the dilatory tactics thus far
attributable to him-seeking postponements of hearings, or failing
to appear therefor despite notice, not only in the Court of First
Instance but also in the City Court proscribe belief in the
sincerity of his avowed desire to negotiate a compromise. Moreover,
the disregard by Yap of the general requirement that "(n)otice of a
motion shall be served by the applicant to all parties concerned at
least three (3) days before the hearing thereof, together with a
copy of the motion, and of any affidavits and other papers
accompanying it,"36for which no justification whatever has been
offered, also militates against thebona fidesof Yap's expressed
wish for an amicable settlement. The relevant circumstances do not
therefore justify condemnation, as a grave abuse of discretion, or
a serious mistake, of the refusal of the Trial Judge to grant
postponement upon this proferred ground.The motion for
reconsideration did not therefore interrupt the running of the
period of appeal. The time during which it was pending before the
court from September 16, 1969 when it was filed with the respondent
Court until October 14, 1969 when notice of the order denying the
motion was received by the movant could not be deducted from the
30-day period of appeal.37This is the inescapable conclusion from a
consideration of Section 3 of Rule 41 which in part declares that,
"The "time during which a motion to set aside the judgment or order
or for a new trial has been pending shall be deducted, unlesssuch
motion fails to satisfy the requirements of Rule 37.38Notice of the
judgment having been received by Yap on September 1, 1969, and the
period of appeal therefrom not having been interrupted by his
motion for reconsideration filed on September 16, 1969, the
reglementary period of appeal expired thirty (30) days after
September 1, 1969, or on October 1, 1969, without an appeal being
taken by Yap. The judgment then became final and executory; Yap
could no longer take an appeal therefrom or from any other
subsequent orders; and execution of judgment correctly issued on
October 15, 1969, "as a matter of right."39The next point discussed
by Yap, that the judgment is incomplete and vague, is not well
taken. It is true that the decision does not fix the starting time
of the computation of interest on the judgment debt, but this is
inconsequential since that time is easily determinable from the
opinion, i.e., from the day the buyer (Yap) defaulted in the
payment of his obligation,40on May 31, 1968.41The absence of any
disposition regarding his counterclaim is also immaterial and does
not render the judgment incomplete. Yap's failure to appear at the
pre-trial without justification and despite notice, which caused
the declaration of his default, was a waiver of his right to
controvert the plaintiff s proofs and of his right to prove the
averments of his answer, inclusive of the counterclaim therein
pleaded. Moreover, the conclusion in the judgment of the merit of
the plaintiff s cause of action was necessarily and at the same
time a determination of the absence of merit of the defendant's
claim of untenability of the complaint and of malicious
prosecution.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."42The 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 P 2,000.00, as well as moral damages in the sum of P
10,000.00 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.WHEREFORE, the petition
is DENIED and the appeal DISMISSED, and the Orders of September 16,
1970 and November 21, 1970 subject thereof, AFFIRMEDin toto.Costs
against petitioner.BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR and
CITY TREASURER OF QUEZON CITY,petitioners,vs.MANILA ELECTRIC
COMPANY,respondent.Assistant City Attorney Jaime R. Agloro for
petitioners.Ross, Selph and Carrascoso for
respondent.PAREDES,J.:From the stipulation of facts and evidence
adduced during the hearing, the following appear:On October 20,
1902, the Philippine Commission enacted Act No. 484 which
authorized the Municipal Board of Manila to grant a franchise to
construct, maintain and operate an electric street railway and
electric light, heat and power system in the City of Manila and its
suburbs to the person or persons making the most favorable bid.
Charles M. Swift was awarded the said franchise on March 1903, the
terms and conditions of which were embodied in Ordinance No. 44
approved on March 24, 1903. Respondent Manila Electric Co. (Meralco
for short), became the transferee and owner of the
franchise.Meralco's electric power is generated by its
hydro-electric plant located at Botocan Falls, Laguna and is
transmitted to the City of Manila by means of electric transmission
wires, running from the province of Laguna to the said City. These
electric transmission wires which carry high voltage current, are
fastened to insulators attached on steel towers constructed by
respondent at intervals, from its hydro-electric plant in the
province of Laguna to the City of Manila. The respondent Meralco
has constructed 40 of these steel towers within Quezon City, on
land belonging to it. A photograph of one of these steel towers is
attached to the petition for review, marked Annex A. Three steel
towers were inspected by the lower court and parties and the
following were the descriptions given there of by said court:The
first steel tower is located in South Tatalon, Espaa Extension,
Quezon City. The findings were as follows: the ground around one of
the four posts was excavated to a depth of about eight (8) feet,
with an opening of about one (1) meter in diameter, decreased to
about a quarter of a meter as it we deeper until it reached the
bottom of the post; at the bottom of the post were two parallel
steel bars attached to the leg means of bolts; the tower proper was
attached to the leg three bolts; with two cross metals to prevent
mobility; there was no concrete foundation but there was adobe
stone underneath; as the bottom of the excavation was covered with
water about three inches high, it could not be determined with
certainty to whether said adobe stone was placed purposely or not,
as the place abounds with this kind of stone; and the tower carried
five high voltage wires without cover or any insulating
materials.The second tower inspected was located in Kamuning Road,
K-F, Quezon City, on land owned by the petitioner approximate more
than one kilometer from the first tower. As in the first tower, the
ground around one of the four legs was excavate from seven to eight
(8) feet deep and one and a half (1-) meters wide. There being very
little water at the bottom, it was seen that there was no concrete
foundation, but there soft adobe beneath. The leg was likewise
provided with two parallel steel bars bolted to a square metal
frame also bolted to each corner. Like the first one, the second
tower is made up of metal rods joined together by means of bolts,
so that by unscrewing the bolts, the tower could be dismantled and
reassembled.The third tower examined is located along Kamias Road,
Quezon City. As in the first two towers given above, the ground
around the two legs of the third tower was excavated to a depth
about two or three inches beyond the outside level of the steel bar
foundation. It was found that there was no concrete foundation.
Like the two previous ones, the bottom arrangement of the legs
thereof were found to be resting on soft adobe, which, probably due
to high humidity, looks like mud or clay. It was also found that
the square metal frame supporting the legs were not attached to any
material or foundation.On November 15, 1955, petitioner City
Assessor of Quezon City declared the aforesaid steel towers for
real property tax under Tax declaration Nos. 31992 and 15549. After
denying respondent's petition to cancel these declarations, an
appeal was taken by respondent to the Board of Assessment Appeals
of Quezon City, which required respondent to pay the amount of
P11,651.86 as real property tax on the said steel towers for the
years 1952 to 1956. Respondent paid the amount under protest, and
filed a petition for review in the Court of Tax Appeals (CTA for
short) which rendered a decision on December 29, 1958, ordering the
cancellation of the said tax declarations and the petitioner City
Treasurer of Quezon City to refund to the respondent the sum of
P11,651.86. The motion for reconsideration having been denied, on
April 22, 1959, the instant petition for review was filed.In
upholding the cause of respondents, the CTA held that: (1) the
steel towers come within the term "poles" which are declared exempt
from taxes under part II paragraph 9 of respondent's franchise; (2)
the steel towers are personal properties and are not subject to
real property tax; and (3) the City Treasurer of Quezon City is
held responsible for the refund of the amount paid. These are
assigned as errors by the petitioner in the brief.The tax exemption
privilege of the petitioner is quoted hereunder:PAR 9. The grantee
shall be liable to pay the same taxes upon its real estate,
buildings, plant (not including poles, wires, transformers, and
insulators), machinery and personal property as other persons are
or may be hereafter required by law to pay ... Said percentage
shall be due and payable at the time stated in paragraph nineteen
of Part One hereof, ...and shall be in lieu of all taxes and
assessments of whatsoever nature and by whatsoever authority upon
the privileges, earnings, income, franchise, and poles, wires,
transformers, and insulators of the grantee from which taxes and
assessments the granteeis hereby expressly exempted. (Par. 9, Part
Two, Act No. 484 Respondent's Franchise; emphasis supplied.)The
word "pole" means "a long, comparatively slender usually
cylindrical piece of wood or timber, as typically the stem of a
small tree stripped of its branches; also by extension, a similar
typically cylindrical piece or object of metal or the like". The
term also refers to "anupright standard to the top of which
something is affixed or by which something is supported; as a
dovecote set on a pole; telegraph poles; a tent pole; sometimes,
specifically a vessel's master (Webster's New International
Dictionary 2nd Ed., p. 1907.) Along the streets, in the City of
Manila, may be seen cylindrical metal poles, cubical concrete
poles, and poles of the PLDT Co. which are made of two steel bars
joined together by an interlacing metal rod. They are called
"poles" notwithstanding the fact that they are no made of wood. It
must be noted from paragraph 9, above quoted, that the concept of
the "poles" for which exemption is granted, is not determined by
their place or location, nor by the character of the electric
current it carries, nor the material or form of which it is made,
but the use to which they are dedicated. In accordance with the
definitions, pole is not restricted to a long cylindrical piece of
wood or metal, but includes "upright standards to the top of which
something is affixed or by which something is supported. As
heretofore described, respondent's steel supports consists of a
framework of four steel bars or strips which are bound by steel
cross-arms atop of which are cross-arms supporting five high
voltage transmission wires (See Annex A) and their sole function is
to support or carry such wires.The conclusion of the CTA that the
steel supports in question are embraced in the term "poles" is not
a novelty. Several courts of last resort in the United States have
called these steel supports "steel towers", and they denominated
these supports or towers, as electric poles. In their decisions the
words "towers" and "poles" were used interchangeably, and it is
well understood in that jurisdiction that a transmission tower or
pole means the same thing.In a proceeding to condemn land for the
use of electric power wires, in which the law provided that wires
shall be constructed upon suitablepoles, this term was construed to
mean either wood or metal poles and in view of the land being
subject to overflow, and the necessary carrying of numerous wires
and the distance between poles, the statute was interpreted to
includetowersorpoles. (Stemmons and Dallas Light Co. (Tex) 212 S.W.
222, 224; 32-A Words and Phrases, p. 365.)The term "poles" was also
used to denominate the steel supports or towers used by an
association used to convey its electric power furnished to
subscribers and members, constructed for the purpose of fastening
high voltage and dangerous electric wires alongside public
highways. The steel supports or towers were made of iron or other
metals consisting of two pieces running from the ground up some
thirty feet high, being wider at the bottom than at the top, the
said two metal pieces being connected with criss-cross iron running
from the bottom to the top, constructed like ladders and loaded
with high voltage electricity. In form and structure, they are like
the steel towers in question. (Salt River Valley Users' Ass'n v.
Compton, 8 P. 2nd, 249-250.)The term "poles" was used to denote the
steel towers of an electric company engaged in the generation of
hydro-electric power generated from its plant to the Tower of
Oxford and City of Waterbury. These steel towers are about 15 feet
square at the base and extended to a height of about 35 feet to a
point, and are embedded in the cement foundations sunk in the
earth, the top of which extends above the surface of the soil in
the tower of Oxford, and to the towers are attached insulators,
arms, and other equipment capable of carrying wires for the
transmission of electric power (Connecticut Light and Power Co. v.
Oxford, 101 Conn. 383, 126 Atl. p. 1).In a case, the defendant
admitted that the structure on which a certain person met his death
was built for the purpose of supporting a transmission wire used
for carrying high-tension electric power, but claimed that the
steel towers on which it is carried were so large that their wire
took their structure out of the definition of a pole line. It was
held that in defining the word pole, one should not be governed by
the wire or material of the support used, but was considering the
danger from any elevated wire carrying electric current, and that
regardless of the size or material wire of its individual members,
any continuous series of structures intended and used solely or
primarily for the purpose of supporting wires carrying electric
currents is a pole line (Inspiration Consolidation Cooper Co. v.
Bryan 252 P. 1016).It is evident, therefore, that the word "poles",
as used in Act No. 484 and incorporated in the petitioner's
franchise, should not be given a restrictive and narrow
interpretation, as to defeat the very object for which the
franchise was granted. The poles as contemplated thereon, should be
understood and taken as a part of the electric power system of the
respondent Meralco, for the conveyance of electric current from the
source thereof to its consumers. If the respondent would be
required to employ "wooden poles", or "rounded poles" as it used to
do fifty years back, then one should admit that the Philippines is
one century behind the age of space. It should also be conceded by
now that steel towers, like the ones in question, for obvious
reasons, can better effectuate the purpose for which the
respondent's franchise was granted.Granting for the purpose of
argument that the steel supports or towers in question are no