Scribd Logo
Upload

Welcome to Scribd!

  • 667 views

    Berkenkotter V Cu Unjieng

    Uploaded by

    Mir Solaiman
    The Mabalacat Sugar Co. took out a loan secured by a mortgage on its land and buildings, including machinery. It later bought additional machinery to increase capacity. BH Berkenkotter loaned money for the new machinery. The court held that [1] the original mortgage included future improvements and the new machinery, as they were essential to operating the sugar mill; [2] installing machinery permanently converted it to real property; and [3] an agreement not to further encumber the machinery did not change its character as part of the permanent structures.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Berkenkotter V Cu Unjieng

    Uploaded by

    Mir Solaiman
    667 views1 page
    The Mabalacat Sugar Co. took out a loan secured by a mortgage on its land and buildings, including machinery. It later bought additional machinery to increase capacity. BH Berkenkotter loaned money for the new machinery. The court held that [1] the original mortgage included future improvements and the new machinery, as they were essential to operating the sugar mill; [2] installing machinery permanently converted it to real property; and [3] an agreement not to further encumber the machinery did not change its character as part of the permanent structures.

    Original Description:

    Property Law Case Digest

    Original Title

    6. Berkenkotter v Cu Unjieng

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The Mabalacat Sugar Co. took out a loan secured by a mortgage on its land and buildings, including machinery. It later bought additional machinery to increase capacity. BH Berkenkotter loaned money for the new machinery. The court held that [1] the original mortgage included future improvements and the new machinery, as they were essential to operating the sugar mill; [2] installing machinery permanently converted it to real property; and [3] an agreement not to further encumber the machinery did not change its character as part of the permanent structures.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    667 views1 page

    Berkenkotter V Cu Unjieng

    Uploaded by

    Mir Solaiman
    The Mabalacat Sugar Co. took out a loan secured by a mortgage on its land and buildings, including machinery. It later bought additional machinery to increase capacity. BH Berkenkotter loaned money for the new machinery. The court held that [1] the original mortgage included future improvements and the new machinery, as they were essential to operating the sugar mill; [2] installing machinery permanently converted it to real property; and [3] an agreement not to further encumber the machinery did not change its character as part of the permanent structures.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 1

    B.H. Berkenkotter v. Cu Unjieng 61 Phil.

    663

    Facts:

    Mabalacat Sugar Co., Inc., owner of the sugar central in Mabalacat,


    Pampanga, obtained from Cu Unjieng e Hijos, a loan secured by a first
    mortgage constituted on two parcels and land "with all its buildings,
    improvements, sugar-cane mill, steel railway, telephone line, apparatus,
    utensils and whatever forms part or is necessary complement of said sugar-
    cane mill, steel railway, telephone line, now existing or that may in the future
    exist is said lots." Shortly after said mortgage had been constituted, the
    Mabalacat Sugar Co., Inc., bought additional machinery and equipment to
    increase the capacity

    B.A. Green, its president, proposed to B.H. Berkenkotter, to advance the


    necessary amount for the purchase of said machinery and equipment,
    promising to reimburse him as soon as he could obtain an additional loan from
    the Cu Unjieng e Hijos. B.A. Green applied to Cu Unjieng e Hijos for an
    additional loan of P75,000 offering as security the additional machinery and
    equipment acquired.

    BH Berkenkotter claims the machinery and equipment was not


    permanent in character, and that it would become security in case B.A. Green
    fails to obtain an additional loan from Cu Unjieng e Hijos. That B.A. Green
    bound himself not to mortgage nor encumber them to anybody.

    Issue: Are the additional machines also included in the first mortgage?

    Held:

    Yes. The mortgage of a parcel of land generally includes all future


    improvements that may be found on said parcel. These improvements include
    real properties, like the additional machines and sugar mill purchased. Said
    additional machinery are real properties because they are essential and
    principal elements of the sugar central. Without them, the sugar central would
    be unable to carry out its industrial purpose.

    If the installation of the machinery and equipment in question in the


    central of the Mabalacat Sugar Co., Inc., in lieu of the other of less capacity
    existing therein, for its sugar industry, converted them into real property by
    reason of their purpose, it cannot be said that their incorporation therewith
    was not permanent in character. Inasmuch as the central is permanent in
    character, the necessary machinery and equipment installed for carrying on
    the sugar industry for which it has been established must necessarily be
    permanent.

    Moreover, that BA Green bound himself to BH Berkenkotter to hold them


    as security for the payment of the latter's credit, and to refrain from mortgaging
    or otherwise encumbering them does not alter the permanent character of the
    said machinery and equipment with the central. The sale of the machinery and
    equipment does not vest BH Berkenkotter with ownership of said machinery
    and equipment but simply with the right of redemption.

    You might also like