Lex Rex Ph

Ago vs. CA Digest

“When Machines Become Real Property”

GR 17898; Oct. 31, 1962

PARTIES:
Pastor D. Ago, petitioner vs. Hon. CA, Hon. Ortiza Judge of CFI Agusan, Provincial Sheriff of Surigao, and Grace Park Engineering

MY NAME FOR THIS CASE
When machines become real estate.

Facts

  • In 1957, Pastor Ago bought sawmill machineries and equipments from (R) Grace Park Engineering and executed a chattel mortgage over said machineries to secure the balance of P32,000.
  • The machineries were taken to Lianga, Surigao and installed in the building of Golden Pacific.
  • (P) Pastor Ago agreed to pay on installment basis but later on defaulted twice.
  • Grace park filed for execution of the machineries. Court granted. Writ of execution followed.
  • Sheriff of Surigao levied the sawmill machineries in question in public auction but his levy did not have notice of sale.
  • Ago filed petition for certiorari and prohibition with prelim. inj. with respondent CA, alleging that respondent Surigao sheriff acted illegally by acting on a void writ of execution.
  • CA issued writ of prelim inj. but (R) sheriff already sold the machineries at public auction. Grace Park was the only bidder at P15,000. CA instructed to suspend the issuance of cert. of sale until final decision.
  • CA ruled in favor of lower court. No grave abuse of discretion in ordering the execution of judgment.
  • Hence, the instant case.

When sheriff sold the sawmill machineries and equipments at public auction without notice of sale, was it valid? No.

Real property requires notice of sale of property on execution (Sec 16 Rule 39 ROC) Are the machines real property? Yes

  • When ago purchased the machineries, he assigned them to Golden Pacific as payment for his stock subscription.
  • They were installed in a building and permanently attached to the ground. Basis: Article 415(5) of Civil Code

Decision

The writ of execution in this case against the sawmill machinery and equipment purchased by petitioner Pastor D. Ago from the Grace Park Engineering, Inc., as well as the sale of the same by the Sheriff of Surigao, are null and void.

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