Davao Saw Mill vs Castillo

G.R. No. L-40411 August 7, 1935

Facts:

Davao Saw Mill Co., Inc., a holder of a lumber concession, has operated sawmill in a land which
it does not own. The company erected a building therein which housed the machinery used by it. In the
lease contract between the sawmill company and the owner of the land, it has been agreed that after
the lease period or in case the company should leave or abandon the land leased before the said period,
ownership of all the improvements and buildings except machineries and accessories, made by the
company shall pass to the owner of the land without any obligation on its part to pay any amount for
said improvements and buildings. In another action, A writ of execution was issued against the
company and the properties in question were levied upon. The company assailed the said writ
contending that the machineries and accessories were personal in nature, hence, not subject to writ of
execution. The trial judge ruled in favor of the company.

Issue: Whether or not the subject properties are personal in nature.

Ruling:

The subject properties are personal in nature. Article 334, paragraph 5, of the [Old] Civil Code
provides that real property consists of (5) Machinery, liquid containers, instruments or implements
intended by the owner of any building or land for use in connection with any industry or trade being
carried on therein and which are expressly adapted to meet the requirements of such trade of industry.
Machinery which is movable in nature only becomes immovable when placed in a land by the owner of
the property or land but not when so placed by a tenant or any person having only a temporary right,
unless such person acted as the agent of the owner. In the case at bar, the machinery is intended not by
the owner of the land but by the saw mill company for use in connection with its trade. In this sense, the
machinery is not a real property.