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Serg's Products, Inc. vs. PCI Leasing G.R. No. 137705 - August 22, 2000 Facts

Petitioner Serg's Products filed a motion to defer enforcement of a writ of replevin granted to PCI Leasing for the seizure of machinery and equipment used in Serg's factory. Serg's claimed the machines had become real property due to immobilization, while PCI argued they remained personal property under the terms of the lease agreement. The court ruled that while the machines had become immobilized by destination and real property under Article 415(5) of the Civil Code, the lease contract validly stipulated they remain personal property, so PCI was entitled to seize them through the writ of replevin.

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115 views2 pages

Serg's Products, Inc. vs. PCI Leasing G.R. No. 137705 - August 22, 2000 Facts

Petitioner Serg's Products filed a motion to defer enforcement of a writ of replevin granted to PCI Leasing for the seizure of machinery and equipment used in Serg's factory. Serg's claimed the machines had become real property due to immobilization, while PCI argued they remained personal property under the terms of the lease agreement. The court ruled that while the machines had become immobilized by destination and real property under Article 415(5) of the Civil Code, the lease contract validly stipulated they remain personal property, so PCI was entitled to seize them through the writ of replevin.

Uploaded by

carl dianne
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Serg’s Products, Inc. vs.

PCI Leasing
G.R. No. 137705 | August 22, 2000

FACTS:
Respondent PCI Leasing and Finance filed a complaint for sum of money, with an
application for a writ of replevin against petitioner. The Judge then issued a writ of
replevin directing its sheriff to seize and deliver the machineries and equipment to PCI
Leasing after 5 days and upon the payment of the necessary expenses. Thereafter, the
sheriff proceeded to petitioner's factory, seized one machinery, with word that he would
return for other machineries.

Subsequently, Petitioner filed a motion for special protective order to defer enforcement
of the writ of replevin on the ground that the subject machines used in their factory were
not proper subjects of the Writ issued by the RTC, because they were in fact real
property as defined in Article 415 of the Civil Code. Respondent opposed the motion on
the ground that the properties were still personal and therefore can still be subjected to
seizure and writ of replevin. Section 12.1 of the Agreement between the parties
provides “The PROPERTY is, and shall at all times be and remain, personal property
notwithstanding that the PROPERTY or any part thereof may now be, or hereafter
become, in any manner affixed or attached to or embedded in, or permanently resting
upon, real property or any building thereon, or attached in any manner to what is
permanent.”

On appeal, the appellate court held that the subject machines were personal property,
and that they had only been leased, not owned, by petitioners.

ISSUE:
Whether or not the machineries became real property by virtue of immobilization.

RULING:

No. The machines are personal property and they are proper subjects of the Writ of
Replevin. Article 415 (5) of the Civil Code provides that machinery, receptacles,
instruments or implements intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works

In the present case, the machines that were the subjects of the Writ of Seizure were
placed by petitioners in the factory built on their own land. They were essential and
principal elements of their chocolate-making industry. Hence, although each of them
was movable or personal property on its own, all of them have become “immobilized by
destination because they are essential and principal elements in the industry.”

However, contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.

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