Tuesday, October 10, 2017

Serg’s Products, Inc. v. PCI Leasing and Finance Inc.

PROPERTY LAW

Serg’s Products, Inc. v. PCI Leasing and Finance Inc.
G.R. No. 137705,  August 22, 2000

Facts:
PCI Leasing and Finance Inc. filed a case for collection of a sum of money as well as a writ of replevin for the seizure of machineries subjected for a chattel mortgage executed by the petitioner Serg’s Products, Inc in favor of the former.
Petitioner filed a motion for special protective order. It asserts that machineries were real property and could not be subject of chattel mortgage.

Issue:
Whether or not the subject machineries are real property and could not be subject of a chattel mortgage.

Ruling:
The machineries in question have become immobilized by destination because they are essential and principal elements in the industry and, thus, have become immovable in nature. Nonetheless, they are still proper subjects for a chattel mortgage.

Contracting parties may validly stipulate that a real property be considered as personal. After such agreement, they are consequently estopped from claiming otherwise.

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