LEUNG YEE V. F.L STRONG MACHINERY CO. AND WILLIAMSON
37 SCRA 644
1. First mortgage: Compania Agricola Filipina bought rice-cleaning machinery from the machinery company and this was secured by a chattel mortgage on the machinery and the building to which it
was installed. Upon failure to pay, the chattel mortgage was foreclosed, the building and machinery sold in public auction and bought by the machinery company.
2. Days after, the Compania Agricola Filipina executed a deed of sale over the land to which the building stood in favor of the machinery company. This was done to cure any defects that may arise in the
machinery company’s ownership of the building.
3. Second mortgage: on or about the date to which the chattel mortgage was excecuted, Compania executed a real estate mortgage over the building in favor of Leung Yee, distinct and
separate from the land. This is to secure payment for its indebtedness for the construction of the building. Upon failure to pay, the mortgage was foreclosed.
4. The machinery company then filed a case, demanding that it be declared the rightful owner of the building. The trial court held that it was the machinery company which was the rightful owner
as it had its title before the building was registered prior to the date of registry of Leung Yee’s certificate.
The building in which the machinery was installed was real property, and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed the character as real property.
It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in the registry of the sale of the mortgaged property, had any effect whatever so far as the building is concerned. *LANDMARK CASE