Leung Yee v. Strong Machinery (37 P 644)
- Compania Agricola Filipina purchased rice cleaning machines from Strong Machinery and executed a CM on the machines and building. Agricola failed to pay, so Strong Machinery foreclosed and recorded it in the Chattel Mortgage Registry. Leung Yee, another creditor of Agricola, purchased the same bldg and recorded it in Registry. Leung knew of Strong’s claim though.
H: bldg is real prop BUT Strong has better right since Leung is a buyer in bad faith
The building is a real property, therefore, its sale as annotated in the Chattel Mortgage Registry cannot be given the legal effect of registration in the Registry of Real Property. The mere fact that the parties decided to deal with the building as personal property does not change its character as real property. Thus, neither the original registry in the chattel mortgage registry, nor the annotation in said registry of the sale of the mortgaged property had any effect on the building. (void as to 3rd persons)
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