Samuel Bischoff v. Juan D. Pomar

Summary

This case involved a dispute over machinery and equipment at Hacienda San Jose between Samuel Bischoff, who purchased the items through a sale a retro from Romana Ganzon, and Compañia General de Tabacos, which held a mortgage on the hacienda. The Supreme Court En Banc affirmed that under Philippine Mortgage Law and Civil Code provisions, mortgages automatically extend to improvements and machinery permanently affixed to mortgaged property unless expressly excluded. Since the machinery was already installed when the original mortgage was executed and no exclusion was stipulated, it remained subject to the mortgage despite Bischoff's subsequent purchase. The decision established important precedent regarding the scope of real property mortgages and the rights of subsequent purchasers versus prior mortgagees, emphasizing that mortgage encumbrances follow the property regardless of later transfers unless properly extinguished.