LOPEZ V. OROSA AND PLAZA THEATREG.R. Nos. L-10817-18 February 28, 1958
FACTS:
-Petitioner Lopez was engaged in doing business under the trade name Lopez-Castelo Sawmill.
Orosa, a resident of the same province as Lopez, invited the latter to make an investment in the theatre business. Lopez declined to invest but agreed to supply the lumber necessary for the construction of the proposed theatre. They had an oral agreement that Orosa would be personally liable for any account that the said construction might incur and that payment would be on demand and not cash on delivery basis.
Lopez delivered the which was used for construction amounting to P62,255.85. He was paid only P20,848.50, leaving a balance of P41,771.35.
The land on which the building was erected previously owned by Orosa, was later on acquired by the corporation.
. As Lopez was pressing Orosa for payment, the latter and president of the corporation promised to obtain a bank loan by mortgaging the properties of the Plaza Theatre., out of which the unpaid balance would be satisfied. But unknown to Lopez, the corporation already obtained a loan with Luzon Surety Company as surety, and the corporation in turn executed a mortgage on the land and building in favor of the said company as counter-security.
Due to the persistent demands of Lopez, Orosa executed a “deed of assignment” over his shares of stock in the corporation.
As it remained unsettled, Lopez filed a case against Orosa and Plaza theatre praying that they be sentenced to pay him jointly and severally of the unpaid balance; and in case defendants fail to pay, the land and building owned by the corporation be sold in public auction with the proceeds be applied to the balance; or the shares of stock be sold in public auction.
The lower court held that defendants were jointly liable for the unpaid balance and Lopez thus acquired the material man’s lien over the construction. The lien was merely confined to the building and did not extend to the on which the construction was made.
Lopez tried to secure a modification of the decision, but was denied.
ISSUES:
Whether the material man’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.
Whether the lower court and CA erred in not providing that the material mans liens is superior to the mortgage executed in favor of surety company not only on the building but also on the land.
HELD:
-The material man’s lien could be charged only to the building for which the credit was made or which received the benefit of refection, the lower court was right in, holding at the interest of the mortgagee over the land is superior and cannot be made subject to the material man's lien.
-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.
-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.
-The law gives preference to unregistered refectionary credits only with respect to the real estate upon which the refectionary or work was made.
- 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.