Standard Oil Co. vs Jaranillo


44 PHIL 631
GR No. L-20329
March 16, 1923

FACTS
Gervasia de la Rosa, Vda. de Vera, who was renting a parcel of land in Manila, constructed a building of strong materials thereon, which she conveyed to Standard Oil Company of New York by way of chattel mortgage.
When the mortgagee presented the deed to the Register of Deeds of Manila for registration in the Chattel Mortgage Registry, Joaquin Jaranillo, the Registrar refused to allow the registration on the ground that the building was a real property, and therefore could not be the subject of a valid chattel mortgage.

ISSUES
1. May the deed be registered in the chattel mortgage registry?
2. Whether the interests conveyed in the instrument are real or personal.

HELD
1. Yes. The Registrar's duty is MINISTERIAL in character.
There is no legal provision conferring upon him any judicial or quasi-judicial power to determine or qualify the nature of the document presented before him.
The determination of the nature of the property lies with the courts of justice, and not by the Register of Deeds.
Moreover, the act of recording a chattel mortgage operates as constructive notice of the existence of the contract, and the legal effects of the contract must be discovered in the instrument itself in relation with the fact of notice. Registration adds nothing to the instrument and affects nobody's rights except as a speciefies of notice.
As such, the Registrar should therefore accept the legal fees being tendered, and place the document on record.

2. Art.334 and 335 of the Civil Code do not supply an absolute criterion for discriminating between real and personal property for the purpose of applying the Chattel Mortgage Law.

It should also be noted that under given conditions property may have character different from that imputed in said articles. Parties to a contract may, by agreement, treat as personal property that which by nature would be real property.

It is undeniable that the parties to a contract may by agreement treat aspersonal property that which by nature would be a real property, as long as no interest of third parties would be prejudiced thereby.

However, it should be reiterated that the determination of the nature of the property, with reference to the placing of the document on record, is neither a function or an authority granted to the Registrar of the Registry of Deeds.

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