Primary Holding

Standing sugar cane, when produced by annual crops and yearly labor, is considered personal property and is therefore not subject to redemption as real property under the provisions of the Civil Code regarding redemption of real estate.

Background

This case arose from a dispute over sugar cane and palay (rice) crops planted on land previously owned by the plaintiff, Leon Sibal, but later involved in execution sales. Sibal attempted to redeem sugar cane sold to the defendant, Emiliano Valdez, and sought to prevent Valdez from harvesting palay on the same land. The core issue revolves around the classification of standing crops as either personal or real property under Philippine law.

Facts

• 1. Leon Sibal planted sugar cane on seven parcels of land.
• 2. Deputy Sheriff Mamawal, under a writ of execution, attached and sold the sugar cane to Emiliano Valdez.
• 3. Sibal attempted to redeem the sugar cane within a year, tendering payment, but Valdez refused.
• 4. Valdez was also attempting to harvest palay on some of the parcels, which Sibal claimed belonged to him.
• 5. Sibal sought a preliminary injunction to prevent Valdez from disturbing his possession of the land and harvesting the crops.
• 6. Valdez counterclaimed, alleging losses due to the injunction preventing him from harvesting sugar cane and palay, and sought damages.
• 7. The lower court ruled in favor of Valdez, classifying sugar cane as personal property and awarding damages.

Arguments of the Petitioners

• 1. Sugar cane is considered real property as "ungathered products" under Article 334 of the Civil Code.
• 2. As real property, it is subject to redemption within one year from the date of sale.
• 3. Valdez should be compelled to accept the redemption money and return the sugar cane.
• 4. Valdez should pay for the value of palay harvested by Valdez which belonged to Sibal.

Arguments of the Respondents

• 1. Sugar cane is personal property and therefore not subject to redemption.
• 2. Valdez was the owner of parcels 1, 2, and 7 and the palay planted therein.
• 3. Valdez never attempted to harvest palay in parcels 4 and 5.
• 4. Valdez suffered losses and damages due to the preliminary injunction preventing him from harvesting sugar cane and palay.

Issues

• 1. Is standing sugar cane considered personal property or real property for purposes of attachment and redemption?
• 2. Was the lower court correct in holding that sugar cane is personal property and not subject to redemption?
• 3. Did the lower court err in awarding the amount of damages to the defendant Valdez?
• 4. Who owns parcels 1, 2, and 7 and the palay planted therein?

Ruling

• 1. The Supreme Court affirmed the lower court's ruling that sugar cane is personal property. The Court reasoned that Article 334 of the Civil Code, classifying "ungathered products" as real property, has been modified by Section 450 of the Code of Civil Procedure and Act No. 1508 (Chattel Mortgage Law).
• 2. Jurisprudence from Spain, Louisiana, California, and other US states supports the view that annually cultivated crops are considered personal property.
• 3. The Court found that for purposes of attachment, execution, and chattel mortgage, "ungathered products" like sugar cane should be treated as personal property.
• 4. The Court modified the damages awarded by the lower court, reducing the amounts for palay and sugar cane shoots, based on the evidence presented.
• 5. The Court upheld Valdez's ownership of parcels 1, 2 and 7 and the crops thereon based on the evidence presented at trial, which Sibal did not effectively rebut due to his absence during the presentation of Valdez's evidence.

Doctrines

• 1. Personal Property vs. Real Property for Crops: Annually cultivated crops, fruits of industry, are treated as personal property, especially for purposes of execution, attachment, and chattel mortgage, despite being technically "ungathered products" under a literal reading of the Civil Code. This is a modification of the Civil Code’s classification for practical legal purposes.
• 2. Mobilization by Anticipation: The concept, derived from Louisiana jurisprudence, that growing crops can be considered movable (personal property) “quoad the right acquired therein,” especially when rights are asserted over them separate from the land itself, such as in sales or chattel mortgages. This recognizes that for commercial and legal transactions, the practical reality of crops as separable from the land is acknowledged.

Key Excerpts

• 1. "We may, therefore, conclude that paragraph 2 of article 334 of the Civil Code has been modified by section 450 of the Code of Civil Procedure and] by Act No. 1508, in the sense that, for the purposes of attachment and execution, and for the purposes of the Chattel Mortgage Law, 'ungathered products' have the nature of personal property."
• 2. "At common law, and generally in the United States, all annual crops which are raised by yearly manurance and labor, and essentially owe their annual existence to cultivation by man, * * * may be levied on as personal property."

Precedents Cited

• 1. Decision of March 18, 1904, vol. 97, Civil Jurisprudence of Spain: Used to show Spanish jurisprudence interpreting similar Civil Code provisions as allowing growing crops to be treated as personal property.
• 2. Lumber Co. vs. Sheriff and Tax Collector (106 La., 418): Illustrates Louisiana jurisprudence on "standing crops" being treated as personal property under certain conditions.
• 3. Porche vs. Bodin (28 La. Ann., 761); Citizens' Bank vs. Wiltz (31 La. Ann., 244); Sandel vs. Douglass (27 La. Ann., 629); Lewis vs. Klotz (39 La. Ann., 267): Louisiana cases cited to support the doctrine of "mobilization by anticipation."
• 4. Raventas vs. Green, 57 Cal., 254; Norris vs. Watson, 55 Am. Dec, 161; Whipple vs. Foot, 3 Am. Dec, 442; McKenzie vs. Lampley, 31 Ala., 526; Crine vs. Tifts and Co., 65 Ga., 644; Gillitt vs. Truax, 27 Minn., 528; Preston vs. Ryan, 45 Mich., 174: American cases from various states cited to demonstrate the general doctrine in the United States treating annually cultivated crops as personal property.
• 5. Emerson vs. European Railway Co., 67 Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep., 63; Hull vs. Hull, 48 Conn., 250 [40 Am. Rep., 165]: Cases cited to support the idea of selling things with "potential existence," further reinforcing the concept of crops as personal property that can be transacted as such before harvest.

Statutory and Constitutional Provisions

• 1. Article 334, paragraph 2 of the Civil Code: Defines real property, including "trees, plants, and ungathered products."
• 2. Section 450 of the Code of Civil Procedure: Defines property liable to execution as "All goods, chattels, moneys, and other property, both real and personal."
• 3. Act No. 1508 (Chattel Mortgage Law), Section 2 and Section 7: Defines personal property subject to chattel mortgage, explicitly including growing crops.
• 4. Article 465 of the Civil Code of Louisiana (and Napoleon Code, 520): Cited as similar provisions regarding standing crops, demonstrating the broader legal context of considering crops attached to land but movable for certain purposes.