FACTS:

1. Lopez was engaged in business under the name Lopez-Castelo Sawmill.

2. Orosa, who lived in the same province as Lopez, one dayapproached Lopez and invited the latter to make an investment inthe theatre business.

3. Orosa, his family and close friends apparently were forming acorporation named Plaza Theatre.

4. Lopez expressed his unwillingness to invest. Nonetheless, therewas an oral agreement between Lopez and Orosa that Lopezwould be supplying the lumber for the construction of the theatre.The terms were the following: one, Orosa would be personallyliable for any account that the said construction would incur; two,payment would be by demand and not by cash on delivery.

5. Pursuant to the agreement, Lopez delivered the lumber for theconstruction. Lopez was only paid one-third of the total cost.

6. The land on which the building has been erected was previously owned by Orosa, which was later on purchased by the corporation.

7. Due to the incessant demands of Lopez, the corporation mortgaged its properties.

8. On an earlier relevant date, the corporation obtained a loan with Luzon Surety Company as surety and in turn, the corporation executed a mortgage over the land and building. In the registration of the land under Act 496, such mortgage wasn’t revealed.

9. Also due to the demands of Lopez, Orosa issued a deed of assignment over his shares of stock in the corporation.

10. As there was still an unpaid balance, Lopez filed a case against Orosa and Plaza theatre. He asked that Orosa and Plaza theatre be held liable solidarily for the unpaid balance; and in case defendants failed to pay, the land and building should be sold in public auction with the proceeds to be applied to the balance; or
that the shares of stock be sold in public auction. Lopez also had lis pendens be annotated in the OCT.

11. The trial court decided that there was joint liability between defendants and that the materialman’s lien was only confined tothe building.

ISSUES:

W/N the materialmen’s lien for the value of the materials used in the construction of the building attaches to said structure alone and doesn’t extend to the land on which the building is adhered to?

HELD:

The contention that the lien executed in favor of the furnisher of materials used for the construction and repair of a building is also extended to land on which the building was constructed is without merit. For while it is true that generally, real estate connotes the land and the building constructed thereon, it is obvious that the inclusion of the building in the enumeration of what may constitute real properties could only mean one thing—that a building is by itself an immovable property. Moreover, in the absence of
any specific provision to the contrary, a building is an immovable property irrespective of whether or not said structure and the land on which it is adhered to belong to the same owner.

Appelant invoked Article 1923 of the Spanish Civil Code, which provides—“With respect to determinate real property and real rights of the debtor, the following are preferred: xxx Credits for reflection, not entered or recorded, and only with respect to other credits different from those mentioned in four next preceding paragraphs.” Close examination of the abovementioned provision reveals that the law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refectionary or work was made. This being so, the inevitable conclusion must be that the lien so created attaches merely to the immovable property for the construction or repair of which the obligation was incurred. Therefore, the lien in favor of appellant for the unpaid value of the lumber used in the construction of the building attaches only to said structure and to no other property of the obligors.