Evangelista vs. Alto Surety & Ins. Co., Inc.

A house constructed by a lessee on leased land is considered immovable or real property for the purposes of attachment and execution, and must be levied upon in accordance with the procedural rules governing real property.

he dispute arose from two separate collection suits against the same debtor, Ricardo Rivera, where both creditors (Evangelista and Alto Surety) subsequently levied upon and purchased the exact same house owned by Rivera but situated on land he merely leased from another party.

• Filed in the Court of First Instance (CFI) of Manila by Evangelista for recovery of title and possession.
• CFI rendered judgment in favor of Evangelista.
• Appealed to the Court of Appeals (CA) by Alto Surety.
• CA reversed the CFI decision and absolved Alto Surety.
• Appealed to the Supreme Court via petition for review on certiorari by Evangelista.

• On June 4, 1949, Santos Evangelista sued Ricardo Rivera for a sum of money and obtained a writ of attachment on a house built by Rivera on leased land in Manila.
• On June 8, 1949, Evangelista levied upon the house by filing a copy of the writ and notice of attachment with the Register of Deeds of Manila.
• Evangelista won his case, bought the house at a public auction on October 8, 1951, and received a definite deed of sale on October 22, 1952.
• When Evangelista sought possession, Rivera refused, claiming Alto Surety & Insurance Co., Inc. was the true owner.
• Alto Surety had purchased the same house at an auction sale on September 29, 1950, pursuant to a writ of execution in a separate civil case, and received a definite deed of sale on May 10, 1952.
• Evangelista filed the present action to establish his title and secure possession, arguing his earlier attachment gave him a preferential right.
• The Court of Appeals ruled against Evangelista, stating the house was personal property and should have been attached by actual custody or by leaving a copy with the possessor, not by filing with the Register of Deeds.

• Evangelista argued that his writ of attachment, which was issued and registered with the Register of Deeds prior to the execution sale to Alto Surety, gave him a better right and a preferential lien over the house.
• Evangelista contended that the house is real property, making his method of attachment via the Register of Deeds legally proper and valid.

• Alto Surety argued that it had a better right to the house because its auction sale (September 1950) and definite deed of sale (May 1952) preceded Evangelista's auction sale (October 1951) and deed of sale (October 1952).
• Alto Surety maintained that the house is personal property, meaning Evangelista's attachment via the Register of Deeds was invalid and ineffective for failing to take actual or constructive possession.
• Alto Surety claimed preference under the rules of double sale of unregistered property, asserting it was a buyer in good faith who first took possession.

• Procedural Issues: Did the Court of Appeals commit grave abuse of discretion by ruling that Evangelista's attachment was invalid due to an alleged failure to serve copies of the writ to Rivera, even though this factual issue was never raised in the pleadings?
• Substantive Issues: Is a house constructed by a lessee on leased land considered real property or personal property for the purpose of attachment and execution?

• Procedural: The Supreme Court ruled that the Court of Appeals committed grave abuse of discretion by invalidating the attachment based on the alleged lack of service to Rivera, because this factual issue was never raised in the pleadings or briefs, and Rivera and Alto Surety had actually impliedly admitted the validity of the attachment process during the trial.
• Substantive: The Supreme Court ruled that the house is immovable or real property, meaning Evangelista's attachment by filing with the Register of Deeds was valid and created a preferential lien that predated Alto Surety's purchase, thereby giving Evangelista the superior right to the property.

• Immovability of Buildings — A true building (not merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by a usufructuary or lessee; it is a permanent fixture of the land.
• Public Nature of Execution Rules — The rules on execution and attachment affect the public and third persons, meaning the form of proceedings prescribed for each kind of property is suited to its objective legal character, not to the character which private parties may have given it in a contract (such as treating a house as personal property in a chattel mortgage).

• "The form of proceedings prescribed for each kind of property is suited to its character, not to the character, which the parties have given to it or desire to give it."
• "A true building (not merely superimposed on the soil) is immovable or real property, whether it is erected by the owner of the land or by usufructuary or lessee."

• Ladera vs. Hodges — Cited to establish the doctrine that a true building is immovable property regardless of whether it is built by the landowner or a lessee.
• Leung Yee vs. Strong Machinery Company — Cited as the foundational Supreme Court precedent affirming that buildings are real property.
• Luna vs. Encarnacion, Standard Oil Co. vs. Jaramillo, De Jesus vs. Juan Dee Co. — Cited to acknowledge, but distinguish, the rule that parties to a deed of chattel mortgage may agree to consider a house as personal property, clarifying that this estoppel only binds the contracting parties and not strangers or public officials.
• Manarang vs. Ofilada — Cited as controlling precedent to explain that private agreements treating a house as personal property do not bind the sheriff or alter the statutory rules on execution and attachment, which must follow the property's true legal nature.

• Rule 59, Section 7(a) of the Rules of Court (Old Rules) — Applied to validate Evangelista's attachment, as it dictates the procedure for attaching real property by filing a copy of the order with the registrar of deeds.
• Rule 59, Section 7(c) and (e) of the Rules of Court (Old Rules) — Discussed and rejected by the Court as inapplicable, as these govern the attachment of personal property.
• Rule 39, Section 16 of the Rules of Court (Old Rules) — Cited to affirm that a house of mixed materials levied upon on execution is real property within the purview of execution rules.
• Article 1544 of the Civil Code — Mentioned as the basis for Alto Surety's defense regarding double sales, though ultimately overcome by Evangelista's valid prior attachment.