1.) Leung Yee v. F.L. Strong Machinery Co. and WilliamsonG.R. No. 11658, February 15, 1918Carson, J.

FACTS:1.) The "Compañia Agricola Filipina" (Agricola) bought from "Strong Machinery Co." rice-cleaning machinery which was installed in one of CAF's buildings.2.) CAF issued a chattel mortgage on the MACHINES and the BUILDING on which they had been installed to secure payment of the purchase price.3.) Upon the buyer's failure to pay, the registered mortgage was foreclosed and was sold by the sheriff.4.) "Strong Machinery Co." bought the mortgaged property. Such sale was annotated in the Chattel Mortgage Registry. (December 29, 1913)5.) January 14, 1914: Agricola also sold to "Strong Machinery" the lot on which the building was constructed. The deed of sale, although executed in a public document, was not registered. Strong Machinery took possession of the building and lot. This deed would appear to have been executed to cure any defects which might be found to exist in Strong Machinery's title to the building under the sheriff's certificate of sale.6.) At or about the time the chattel mortgage was executed for Strong Machinery, the mortgagor (Agricola), executed another mortgage to Leung Yee upon the building, separate and apart from the land on which it stood, to secure payment for a previous indebtedness. Since the mortgagor failed to pay, Leung Yee secured judgment for the amount, levied execution upon the building, bought it at the sheriff's sale on December 18, 1914. This was registered in the land registry.Summary: Previously however, Leung Yee, a creditor of “Agricola,” had purchased the same building at a sheriff’s sale despite his knowledge of the prior sale in favor of Strong Machinery. This sale in favor of Yee was recorded in the Registry.7.) Leung Yee now sues to recover the property from "Strong Machinery."RTC: Relying upon the terms of Art. 1473 of the Civil Code, gave judgment in favor of Strong Machinery, on the ground that the company had its title to the building registered prior to the date of registry of the plaintiff's certificate.

ISSUES:

1.) Was the property's nature changed by its registration in the Chattel Mortgage Registry?2.) Who has a better right to the property?HELD:1.) The building is a REAL PROPERTY, therefore, its sale as annotated in the Chattel Mortgage Registry CANNOT be given the legal effect of registration in the Registry of Real Property.2.) Following the rule on possessory rights provided in Art. 1472, STRONG MACHINERY has a better right to the property since it first purchased the same ahead of Leung Yee, the latter not being a purchaser in good faith.

RATIO:1.) Chattel Mortgage refers to the mortgage of Personal Property executed in the manner and form prescribed in the stature.

Since the building is REAL PROPERTY, its sale as annotated in the Chattel Mortgage Registry cannot be given the legal effect of registration in the Registry of Real Property.

The mere fact that the parties decided to deal with the building as a personal property does not change its character as real property.

Neither the original registry in the Chattel Mortgage Registry, not the annotation in said registry of the sale of the mortgaged property had any effect on the building.

Article. 1473 of the New Civil Code provides the following rules on determining ownership of property which has been sold to different vendees:If Personal Property – grant ownership to person who 1st possessed it in good faith.If Real Property – grant ownership to person who 1st recorded it in the Registry.If no entry – grant to person who 1st possessed in good faith.If no proof of possession – grant to person who presents oldest title.

Since Leung Yee purchased the property despite knowledge of the previous purchase of the same by Strong Machinery Co., it follows that Leung Yee was not a purchaser in good faith.

2.) Prudential Bank v. Panis, G.R. No. L-50008; 31 Aug. 1987Paras, J.

FACTS: 1.) Plaintiff-spouses Magcale secured a loan in the sum of P70k from the defendant Prudential Bank. To secure the payment of the loan, spouses Magcale executed a deed of Real Estate Mortgage over a 2-story semi-concrete residential building with warehouse spaces declared and assessed in the name of Fernando Magcale with the right to occupy the lot where the building was erected. The real estate mortgage also included information about the Sales Patent applied for by the spouses for the lot which the building stood. (sales patent= only a specific person or entity has the right to sell a product)2.) The spouses got another loan, which was secured by another Real Estate Mortgage over the same properties.3.) Then, the Secretary of Agriculture issued a Miscellaneous Sales Patent over the lot which was then mortgaged to the bank in favor of Magcale.4.) The spouses defaulted on both loans and so the Real Estate Mortgage was extrajudicially foreclosed, and sold to public auction.5.) The RTC held that the mortgage was null and void.

ISSUE: 1.) WON a valid real estate mortgage can be constituted on the building erected on the land belonging to anotherHELD: 1.) YES, under Art. 415 of the CC, it is obvious that the inclusion of “building” separate and distinct from the land can only mean that a building is by itself an immovable property

RATIO: *a.) While it is true that a mortgage of land necessarily includes, in the absence of stipulation of improvements, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would still be a real estate mortgage because a building is an immovable property even if dealt with separately and apart from the land. Thus, the possessory rights over said properties is vested on the grantee, may be validly transferred or conveyed as in a deed of mortgageb.) The first mortgage executed by Magcale on his own building which was erected on the land belonging to the government is a valid mortgage since it was executed before the issuance of the sales patent and before the government divested of title to the land. d.) It is a different matter with regard to the 2nd mortgage executed over the same properties on May 2, 1973 for the additional loan of

P20k which was registered with the Registry of Deeds of Olongapo City. It is evident that such mortgage executed after the issuance of the sales patent and of the OCT falls squarely under the prohibitions of the PLA and RA 730 and is therefore null and void

3.) Standard Oil Co. of New York v. JaramilloG.R. No. 20329, March 16, 1923Street, J.

FACTS:1.) Gervasia de la Rosa was the lessee of a parcel of land (Manila) and owner of the house of strong materials built thereon, upon which she executed a chattel mortgage purporting to convey to the petitioner by way of mortgage both the leasehold interest in said lot and the building which stands thereon.2.) When the mortgagee (Standard Oil) was presenting the deed to the Register of Deeds of Manila for registration in the Chattel Mortgage Registry, the Registrar, Joaquin Jaramillo, refused to allow the registration on the ground that the building was a real property, not personal property, and therefore could not be the subject of a valid chattel mortgage.

ISSUE: Whether or not the deed may be registered in the chattel mortgage registry.HELD: Yes, because the Registrar's duty in MINISTERIAL in character.

RATIO:No provision of law can be cited which confers upon him any

judicial or quasi-judicial power to determine the nature of any document of which registration is sought as a chattel mortgage.

He should therefore accept the legal fees being tendered, and place the document on record.

Of course, if the mortgaged property is real instead of personal, the chattel mortgage would no doubt be held ineffective as against third parties, but this is a question to be determined by the courts of justice and not by the register of deeds.

4.) Toledo-Banaga v. CAG.R. No. 127941, 28 Jan. 1999Martinez, J.

FACTS: 1.) Banaga filed an action for redemption in the trial court which declared that she had lost her right to redeem her property earlier foreclosed and which was subsequently sold at a public auction to Damalerio. Certificates of Title covering the said property were issued to Demalerio which petitioner Banaga annotated on March 3, 1983 a notice of lis pendens. On appeal by petitioner Banaga, the CA reversed the decision of the trial court and allowed him to redeem the property within a certain period. Damalerio petitioned to the CA but was dismissed so the decision became final.2.) On June 11, 1992, petitioner Banaga tried to redeem the property by depositing with the trial court the amount of redemption which was financed by her co-petitoner Tan. However, Damalerio opposed the redemption arguing that it was made beyond the time given by the court in the earlier case. Despite this, the lower court issued an order on August 7, 1992 upholding the redemption and ordered the Registry of Deeds to cancel the Certificates of Title and issue new titles in the name of petitioner Banaga.4.) Damalerio moved for reconsideration but was denied on January 4, 1993 so he filed a petition for certiorari with the CA. This caused the annotation of said petition as another notice of lis pendens on the Certificates of Title. 3 days later, the CA issued a TRO to enjoin the execution of the August 7 and January 4 orders.5.) On Jan 7, petitioner Banaga sold the subject property to Tan with the deed of absolute sale mentioning private respondents’ (Damalerio) certificate of title which was not yet cancelled.6.) Despite the notice of lis pendens, petitioner Tan subdivided the property under a subdivision plan which she made not in her name but under Damalerio. There being no preliminary injunction with the expiration of TRO, petitioner Tan asked the Register of Deeds to issue new titles in her name. Such titles were issued to petitioner Tan but still carried annotations of two notices of lis pendens.7.) Upon learning of the new title, Damalerio impleaded Tan in his previous petition in the CA.8.) On October 28, 1993, CA set aside the Aug and Jan orders of the trial court and declared Damalerio the absolute owner of the property.9.) With this, Banaga filed a petition for review but was dismissed by the CA for lack of merit. Then, the trial court issued a writ of execution ordering the Register of Deeds to name the titles under Damalerio.

10.) However, the Registry of Deeds refused to comply alleging that the Certificate issued to Tan must first be surrendered11.) The CA rendered a decision granting the petition of Damalerio.12.) Upon denial by the CA of their MR, petitioners filed the instant petition for certiorari and mandamus. However, the CA still found that it was without merit. The petitioners contend that petitioner Tan is a buyer in good faith; and (2) that the remedy of private respondent to secure the titles in his name is by consulta to the Land Registration Commissioner and not through contempt

ISSUES: 1.) WON the registry of deeds may refuse to name the titles under Damalerio2.) WON Tan is a buyer in good faithHELD: 1.) NO2.) NO

RATIO: (a.) It is a ministerial function of the Register of Deeds to comply with the decision of the court to issue a title and register a property in the name of a certain person, especially when the decision had attained finality. This is despite the “formality” that the registered owner shall first surrender the duplicate Certificate of Title for cancellation. The order of the court is sufficient.(b.) A party dealing with a registered land does not have to go beyond the Certificate of Title to determine the true owner thereof so as to guard or protect her interest. The entries in the Certificate of Title is enough. – When the property was sold to Tan, he was aware of the interest of Damalerio over it. It was Tan who financed the attempted redemption of Banaga. One who redeems in vain a property of another acquires notice that there could be a controversy. Moreover, when Tan was buying the property, it was not in its seller’s(Banaga) name. This is clear even from the deed of absolute sale which mentioned that the title is in Damalerio’s name.(c.) Knowing that there is a flaw in the title, Tan cannot claim that he acquired it in good faith.

*to stop execution, preliminary injunction shall be filed.

5.) Davao Sawmill Co. v. CastilloG.R. No. L-40411, August 7, 1935Malcolm, J.

THE CASE: Involves the determination of the nature of the properties described. Trial judge found that those properties were personal in nature, and as a consequence, absolved the defendants from the complaint.

FACTS:1.) Davao Sawmill Co. is the holder of a lumber concession from the Philippines. It has a sawmill in Davao.2.) The land upon which the business was conducted belonged to another person.3.) On the land, Davao Sawmill erected a building which housed the machinery used by it.4.) Some of the implements were clearly personal property but were mounted and placed on foundations of cement.5.) In the contract of lease, Davao Sawmill agreed to turn over, free of charge, all improvements and the building erected by it on the premises with the exception of machineries, which shall remain with the Davao Sawmill.6.) In another action brought by the Davao Light and Power Co., judgment was rendered against Davao Sawmill. A writ of execution was issued and the machineries placed on the sawmill were levied upon by the sheriff.7.) Davao Light and Power Co. proceeded to purchase the machinery and other properties auctioned by the sheriff.

ISSUE: Are the machineries real or personal property?HELD: The machinery must be classified as personal property.

RATIO: As a rule, the machinery should be considered as personal,

since it was not placed on the land by the owner of said land. Immobilization by destination or purpose cannot generally be

made by a person whose possession of the property is only TEMPORARY, otherwise we will be forced to presume that he intended to give the property permanently away in favor of the owner of the premises.

If the objects are placed by a mere tenant, the objects must remain chattels or for the purposes of the Chattel Mortgage Law.

IMPORTANT TO NOTE:Appellant should have registered its protest before or at the

time of the sale of the property. While not conclusive, the appellant's characterization of the property as chattels is indicative of intention and impresses upon the property the character determined by the parties.

The lessee placed the machinery in the building erected on land belonging to another, with the understanding that the machinery was not included in the improvements which would pass to the lessor on the expiration of the lease agreement.

6.) People’s Bank & Trust Co. v. Dahican LumberG.R. No. L-17500, 16 May 1967Dizon, J.

FACTS: 1.) DAMCO (American Lumber) obtained several loans amounting to P200k from People’s Bank and, together with DALCO (Dahican Lumber), another loan amounting to $250k from Export-Import bank secured by 5 promissory notes through People’s Bank. In both loans, DAMCO executed and registered respective mortgages with inclusion of “after acquired properties”. DAMCO and DALCO failed to satisfy the fifth promissory note in favor of Export bank so People’s Bank paid it and subsequently filed an action for the foreclosure of mortgaged properties of DAMCO including the after acquired machinery, equipment and spare parts upon the latter’s failure to fulfill its obligation2.) People’s Bank asserted that the “after acquired” machinery and equipment of DAMCO are subject to the deed of mortgage executed by DAMCO. So, these can be included in the foreclosure proceedings.3.) DALCO argued that the mortgages were void as regards the “after acquired” properties because they were not registered in accordance with the chattel mortgage law. Moreover, provision of the fourth paragraph of said mortgages did not automatically make subject to such mortgages the “after acquired properties”, the only meaning thereof being that the mortgagor was willing to constitute a lien over such properties.

ISSUE: WON the “after acquired” machinery and equipment of DAMCO are included as subject of the REM, thus can be foreclosedHELD: YES, the judgment is rendered in favor of People’s Bank because the “after acquired” machinery and equipment are included in the executed mortgages

RATIO: a.) The “after acquired properties” were purchased by DALCO in connection with, and for use in the development of its lumber concession and that they were purchased in addition to, or in replacement of those already existing in the premises on July 13, 1950. In Law, therefore, they must be deemed to have been immobilized with the result that the real estate mortgages involve herein did not have to be registered a second time as chattel mortgages in order to bind the “after acquired properties” and affect third parties.

b.) It is also clear that all property of every nature and description taken in exchange or replacement, as well as all buildings, machineries, fixtures, tools, equipments, and other property that the mortgagor may acquire, construct, install, attach; or use in, to upon, or in connection with the premises – that is, its lumber concession- “shall immediately be and become subject to the lien” of both mortgages in the same manner and to the same extent as if already included therein at the time of their execution. As the language thus used leaves no room for doubt as to the intention of the parties. We see no useful purpose in discussing the matter extensively. c.) In all cases where the properties given as collateral are perishable or subject to inevitable wear and tear or were intended to be sold, or to be used but with the understanding, express or implied, that they shall be replaced with others to be thereafter acquired by the mortgagor. Such stipulation is neither unlawful nor immoral, its obvious purpose being to maintain, to extent allowed by circumstances, the original value of the properties given as security. Indeed, if such properties were of the nature already referred to, it would be poor judgment on the part of the creditor who does not see to it that a similar provision is included in the contract.

7.) Berkenkotter v. Cu UnjiengG.R. No. 41643, July 31, 1935Villa-Real, J.

FACTS:1.) On 26 April 1926, the Mabalacat Sugar Company obtained from Cu Unjieng e Hijos, a loan secured by a first mortgage constituted on 2 parcels of land "with all its buildings, improvements, sugar-cane mill, steel railway, telephone line, apparatus, utensils and whatever forms part or is a necessary complement of said sugar-cane mill, steel railway, telephone line, now existing or that may in the future exist in said lots.”2.) On 5 October 1926, the Mabalacat Sugar Company decided to increase the capacity of its sugar central by buying additional machinery and equipment. Green (president of the corporation) proposed to the Berkenkotter, to advance the necessary amount for the purchase of said machinery and equipment, promising to reimburse him as soon as he could obtain an additional loan from the mortgagees, Cu Unjieng e Hijos.3.) Having agreed to said proposition made in a letter dated 5 October 1926, Berkenkotter, on 9 October 1926, delivered the sum of P1,710 to Green, the total amount supplied by him to Green having been P25,750. 4.) Furthermore, Berkenkotter had a credit of P22,000 against said corporation for unpaid salary. With the loan of P25,750 and said credit of P22,000, the Mabalacat Sugar Co., Inc., purchased the additional machinery and equipment.5.) On 10 June 1927, Green applied to Cu Unjieng e Hijos for an additional loan of P75,000 offering as security the additional machinery and equipment acquired by said Green and installed in the sugar central after the execution of the original mortgage deed, on 27 April 1927, together with whatever additional equipment acquired with said loan. Green failed to obtain said loan. Hence, above mentioned mortgage was in effect.

ISSUE: Whether or not the additional machines are also considered mortgaged.

HELD/RATIO:The mortgage of a parcel of land generally includes all future

improvements that may be found on said parcel. These improvements include real properties, like the additional machines and sugar mill purchased. Said additional machineries are real properties because they are essential and principal elements of the sugar central. Without them, the sugar central would be unable to carry out its industrial purpose.

The installation of the machinery and equipment in the central of the Mabalacat Sugar Company for use in connection with the industry carried by that company, converted the said machinery and equipment into real estate by reason of their purpose.

8.) Makati Leasing & Finance Corp. v. Wearever Textile MillsG.R. No. L-58469, 16 May 1983De Castro, J.

FACTS: 1.) Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor of Makati Leasing Finance Corporation covering certain raw materials and machinery. Upon default, Makati Leasing filed a petition for judicial foreclosure of the properties mortgaged. Acting on Makati Leasing’s application for replevin, the lower court issued a writ of seizure. Pursuant thereto, the sherff enforcing the seizure order and removed the main motor of the subject machinery.2.) In a petition for certiorari and prohibition, the CA ordered the return of the machinery on the ground that the same cannot be the subject of replevin because it is a real property pursuant to Article 415 of the new CC, the same being attached to the ground by means of bolts and the only way to remove it from Wearever textile’s plant would be to drill out or destroy the concrete floor. When the motion for reconsideration of Makati Leasing was denied by the Court of Appeals, Makati Leasing elevated the matter to the Supreme Court.ISSUE: WON the machinery in suit is real or personal property from the point of view of the partiesHELD: The machinery is a personal property.

RATIO: Like what was involved in the Tumalad case, if a house of strong materials, 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 the denying the existence of the chattel mortgage. The decision of the Court of Appeals was set aside and the order of the lower court was reinstated.

9.) Board of Assessment Appeals QC v. Manila Electric Co.G.R. No. L-15334, January 31, 1964Paredes, J.

SHORT DIGEST:FACTS:1.) On November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to real property tax. After the denial of MERALCO's petition to cancel these declarations, an appeal was taken to the QC Board of Assessment Appeals, which required respondent to pay P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956. 2.) MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals (CTA) which rendered a decision ordering the cancellation of the said tax declarations and the refunding to MERALCO by the QC City Treasurer of P11,651.86.

DETAILED FACTS:1.) On 20 October 1902, the Philippine Commission enacted Act 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 Manila and its suburbs to the person or persons making the most favorable bid. 2.) Charles M. Swift was awarded the said franchise on March 1903, the terms and conditions of which were embodied in Ordinance 44 approved on 24 March 1903. 3.) Meralco became the transferee and owner of the franchise. Meralco’s electric power is generated by its hydro-electric plant located at 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. 4.) These electric transmission wires which carry high voltage current, are fastened to insulators attached on steel towers constructed by respondent at intervals, from its hydroelectric plant in the province of Laguna to the City of Manila. Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it.5.) On 15 November 1955, City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax Declaration 31992 and 15549. 6.) After denying Meralco’s petition to cancel these declarations an appeal was taken by Meralco to the Board of Assessment Appeals of

Quezon City, which required Meralco to pay the amount of P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956. 7.) Meralco paid the amount under protest, and filed a petition for review in the Court of Tax Appeals which rendered a decision on 29 December 1958, ordering the cancellation of the said tax declarations and the City Treasurer of Quezon City to refund to Meralco the sum of P11,651.86. The motion for reconsideration having been denied, on 22 April 1959, the petition for review was filed.

ISSUE: Are the steel towers or poles of the MER- ALCO considered real or personal properties? HELD: They are personal properties.

RATIO:They do not come under Par. 1 of Art. 415 because they are

neither buildings or constructions adhered to the soil.They do not come under Par. 3 because they are not attached

to an immovable in a fixed manner, that is, they can be separated without breaking the material or causing deterioration of the object to which they are attached.

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

NOTE:Pole – long, comparatively slender, usually cylindrical piece of

wood, timber, object of metal or the like; an upright standard to the top of which something is affixed or by which something is supported.

It is evident 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 should be taken and understood as part of MERALCO's electric power system for the conveyance of electric current to its consumers.

10.) Manila Electric Co. v. BAA BatangasG.R. No. L-47943, 31 May 1982Aquino, J.

FACTS: 1.) This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric Company on a lot in San Pascual, Batangas which it leased in 1968 from Caltex2.) The storage tanks are made of steel plates welded and assembled on the spot. Their bottoms rest on a foundation consisting of compacted earth as the outermost layer. The tank is not attached to its foundation. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws, or similar devices. The tank merely sits on its foundation. Pipelines were installed on the sides of each tank and are connected to the pipelines of the Manila Enterprises Industrial Corporation.3.) The board concludes that while the tanks itself and the walls, dikes, and steps, which are integral parts of the tanks are affixed to the land while pipelines are attached to the tanks and required Meralco to pay realty taxes on the two tanks.

ISSUE: WON the 2 oil tanks installed by Meralco in Batangas is subject to a realty taxHELD: YES, although the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry.

RATIO: (a) It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil need by Meralco for its operations.( b) The two tanks should be held subject to realty tax because they were considered real property

The petiton is dismissed. The Board’s questioned decision and resolution are affirmed.

* immovables by destination

11.) Manila Securities Industrial Corporation v. Central Board of Assessment AppealsG.R. No. L-46245, May 31, 1982Aquino, J.

FACTS:1.) Pursuant to a pipeline concession issued under the Petroleum Act of 1949, Republic Act No. 387, Meralco Securities installed from Batangas to Manila a pipeline system consisting of cylindrical steel pipes joined together and buried not less than one meter below the surface along the shoulder of the public highway. 2.) The pipes are embedded in the soil and are firmly and solidly welded together so as to preclude breakage or damage thereto and prevent leakage or seepage of the oil. The valves are welded to the pipes so as to make the pipeline system one single piece of property from end to end.3.) In order to repair, replace, remove or transfer segments of the pipeline, the pipes have to be cold-cut by means of a rotary hard-metal pipe-cutter after digging or excavating them out of the ground where they are buried. In points where the pipeline traversed rivers or creeks, the pipes were laid beneath the bed thereof. Hence, the pipes are permanently attached to the land.4.) Pursuant to the Assessment Law, Commonwealth Act No. 470, the provincial assessor of Laguna treated the pipeline as real property and issued tax declarations, containing the assessed values of portions of the pipeline.5.) Meralco appealed the assessments to the defendants, but the latter ruled that pipeline is subject to realty tax. The defendants argued that the pipeline is subject to realty tax because they are contemplated in Assessment Law and Real Property Tax Code; that they do not fall within the category of property exempt from realty tax under those laws; that Articles 415 & 416 of the Civil Code, defining real and personal property have no applications to this case because these pipes are constructions adhered to soil and things attached to the land in a fixed manner, and that Meralco Securities is not exempt from realty tax under petroleum law.6.) Meralco insists that its pipeline is not subject to realty tax because it is not real property within the meaning of Art. 415.

ISSUE: Whether or not the pipelines are real properties.

HELD: Yes, and as such, the pipelines are subject to realty tax.

RATIO:Article 415[l] and [3] provides that real property may consist of

constructions of all kinds adhered to the soil and everything 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.

The pipeline system in question is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline.

Insofar as the pipeline uses valves, pumps and control devices to maintain the flow of oil, it is in a sense machinery within the meaning of the Real Property Tax Code.It should be borne in mind that what are being characterized as real property are not the steel pipes but the pipeline system as a whole.