PROPERTY ATTY.

CERTEZA

MIDTERM REVIEWER (ART. 414-475)

TITLE I: CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS
Definition of Property Under the Civil Code, property, considered as an object, is that which is, or may be, appropriated. Concept of Appropriation Although not defined by the Code, it has been considered as equivalent to occupation, which is the willful apprehension of a corporeal object which has no owner, with intent to acquire its ownership. However, note that property involves not only material objects but also intangible things, like rights or credits. Things as distinguished from Property Paras: Thing is broader in scope for it includes both appropriable and nonappropriable object. Tolentino: By things are meant all objects that exist and can be of some use to man. Classification of Things 1. RES NULLIUS (belonging to no one) These things belong to no one since they have not yet been appropriated. Examples: fish still swimming in the sea. Note: Until they are caught and safely deposited in a boat, a fisherman may not be considered the owner thereof (Alvarado vs. Basa) 2. RES COMMUNES (belonging to everyone) Things owned by everybody in that their use and enjoyment are given to all of mankind. Examples: air we breathe, the wind, sunlight, and starlight. 3. RES ALICUJUS (belong to someone) These are objects, tangible or intangible which are owned privately, either in collective or individual capacity. Examples: your book, your shares of stock, your parcel of land. Note: Since they can be owned, they should be considered property. Characteristics of Property 1. Utility for the satisfaction of moral or economic wants 2. Susceptibility of appropriation 3. Individuality or substantivity (i.e. it can exist by itself and not merely as part of a whole).

ARTICLE 414
Art. 414. All things which are or may be the object of appropriation are considered either: (a) Immovable or real property; or (b) Movable or personal property.

Importance The classification of property into immovables or movables assumes its importance from the fact that different provisions of the law govern the acquisition, possession, disposition, loss, and registration of immovables and movables. Query: Is the Human Body real or personal property? Paras: The human body, whether alive or dead, is neither real nor personal property, for it is not even property at all, in that it generally cannot be appropriated. While a human being is alive, he cannot, as such, be the object of a contract, for he is considered outside the commerce of man. He may of course offer to another the use of various parts of his body, even the entire body itself in obligations requiring demonstrations of strength or posing. He may donate part of his blood, may even sell part of his hair, but he cannot sell his body. Tolentino: In general, the living human body is not considered as a thing, although some parts of it are considered as things when separated from it; such as, the hair and the teeth. Upon death, the corpse becomes a thing, although it is not susceptible of appropriation by reason of public morality. An onerous contract disposing ones own corpse even for scientific purposes is void, although a gratuitous disposition of the same for such purpose is considered valid.

CHAPTER 1 IMMOVABLE PROPERTY ARTICLE 415

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Art. 415. The following are immovable property: (1) Land, building, roads, and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) 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; (6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast; (10) Contracts for public works, and servitudes and other real rights over immovable property

Machinery, receptacles, instruments intended by owner for an industry or

works to be carried on in a building or on a piece of land, and which Is essential to the industry or works. Mines and quarries while the matter therefrom forms part of the bed Fertilizer used on a piece of land Attached to an immovable in a fixed manner which cannot be separated therefrom without breaking the material. Docks and floating structures intended to remain at a fixed place of an a river, lake or coast. Contracts of public works and other real rights over immovable property Land, buildings, roads and constructions of all kinds adhered to the soil Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable.

Classes of immovables IMMOVABLES BY NATURE those which cannot be moved from place to place. IMMOVABLES BY INCORPORATION those which are essentially movables but are attached to an immovable in such manner as to be an integral part thereof. IMMOVABLES BY DESTINATION OR PURPOSE those which are essentially movables, but by the purpose of which they have been placed in an immovable, partake of the nature of the latter because of the added utility derive therefrom. IMMOVABLES BY ANALOGY OR BY LAW such as those mentioned in para. 10. Note: However, the enumeration given in Art. 415 does NOT give an absolute criterion as to which properties are real and which are personal (Standard Oil Co. vs. Jaranillo, 44 Phil. 630). Comments on Article 415 Para. 1: land is immovable by nature. Buildings are considered immovable provided they are more or less of a permanent structure, substantially adhering to the land. The inclusion of building separate and distinct from land means that a bulding by itself is an immovable property.

Memory Aid: Immovable properties under Article 415

SAM2 FAD CLT

Statues, reliefs, paintings placed in buildings or lands with intent to attach

them permanently Animal houses, pigeon-houses, beehives, fish ponds with intent to have them permanently attached to the land

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Para. 2: Trees and plants are real property by nature if they are spontaneous products of the soil and by incorporation if they were planted thru labor. But the moment they are detached or uprooted from the land, they become personal property. Growing crops, express codal provisions, are considered real property by incorporation. However, under the chattel mortgage law, growing crops may be considered as personal property and may thus be the subject of a chattel mortgage (Sibal vs. Valdez, 50 Phil 512). Para 3: For incorporated thing to be considered real property, the injury or breakage or deterioration in case of separation must be substantial. Para 9: A floating house tied to a shore used as residence is considered real property. Vessels are considered personal property. Para 10: Properties referred to here are not material things but rights which are necessarily intangible.

QUERY: Can we properly consider a building to be immovable by incorporation since it is attached to the land? There are two views. According to Tolentino, a building is immovable by nature. Buildings are always immovable. It cannot be moved from place to place. An immovable by incorporation, on the other hand, presupposes that a movable was attached to an immovable so as to be an integral part of. That, however, applies only to constructions of all kinds adhered to the soil but not to buildings, land and roads. On the other hand, Paras posits that a building is an immovable by incorporation. A building is considered immovable provided that it is more or less a permanent structure, substantially adhered to the land, and not mere superimpositions and provided there is the intent of permanent annexation. Hence, Paras views a building as essentially a movable which, when, attached to the land with an intent of permanence, becomes an immovable. There is no distinction with constructions of all kinds adhered to the soil because they are to be understood as attachments that are more or less permanents. CASES

Para. 3 distinguished from Para. 2 PARA. 3 (1) Cannot separate from immovable without breaking or deterioration (2) Need not be placed by the owner (3) Real property by incoporation PARA. 2 (1) Can be separated from immovables without breaking or deterioration (2) Must be placed by the owner or by his agent express or implied (3) Real property by incorporation and destination

Para 5: The essential requisites are: 1. The placing must be made by the owner of the tenement, his agent or duly authorized legal representative 2. The industry or works must be carried on in the building or on the land 3. The machines must tend directly to meet the needs of said industry or works (also called ADAPTABILITY) 4. The machines must be essential and principal elements in the industry and not merely incidental Para. 5 refers to real property by destination or purpose.

Leung Yee vs. Frank Strong Machinery Company

FACTS: The Compania Agricola Filipina purchased from Strong Machienery Co. rice-cleaning machines which the former installed in one of its buildings. As security for the purchase price, the buyer executed a chattel mortgage on the machines and the building on which they had been installed. Upon buyers failure to pay, the registered mortgage was foreclosed, and the building was purchased by the seller, the Strong Machinery Co. This sale was annotated in the Chattel Mortgage Registry. Later, the Agricola also sold to Strong Machinery the lot on which the building had been constructed. This sale was not registered in the Registry of Property but the Machinery Co. took possession of the building and the lot. Previously however, the same building had been purchased at a sheriffs sale by Leung Yee, a creditor of Agricola, although Leung Yee knew all the time of the prior sale in favor of Strong Machinery. This sale in favor of Leung Yee was recorded in the Registry. Leung Yee now sues to recover the property fr om Strong Machinery.

Para 6: The houses referred to here maybe already be deemed included in para. 1 (Manresa) Para 7: If fertilizer is still in the barn or on the ground wrapped in newspapers, they are considered personal property for they have not yet been actually used over the lands. Para 8: Mines, including the minierals still attached thereto, are real properties, but when the minerals have been extracted, the latter become chattels

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where the property or any part thereof lies. ISSUE: Who has a better right to the property? HELD: The building is 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 annotation in said registry of the sale of the mortgaged property had any effect on the building. If Leung Yee was in good faith, Art. 1473 would have applied which says: If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be personal property.

Prudential Bank vs. Panis

FACTS: Spouses Magcale executed a deed of Real Estate Mortgage with Prudential Bank over a building which includes a right of occupancy (lot was not theirs yet, subject to an application of a miscellaneous sales patent) on the lot. Subsequently, Spouses Magcale entered into an additional loan from said bank over the same properties. However, prior to the additional loan, a Miscellaneous Sales Patent was issued over the parcel of land. ISSUE: Whether or not a valid real estate mortgage can be constituted on the building erected on the land belonging to another? HELD: Yes, in the enumeration of properties under Article 415 of the Civil Code of the Philippines, this Court ruled that, "it is obvious that the inclusion of "building" separate and distinct from the land, in said provision of law can only mean that a building is by itself an immovable property." Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would be still a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land. In the same manner, this Court has also established that possessory rights over said properties before title is vested on the grantee, may be validly transferred or conveyed as in a deed of mortgage. NOTE: 2nd Mortgage was held not valid. Since the mortgaged was entered into after the issuance of the Miscellaneous Sales Patent, it fell squarely under the prohibitions stated in the Public Land Act covering property under a Sales patent.

Punsalan vs. Vda De Lacsamana

FACTS: Punsalan was said to have been an owner of a parcel of land. He mortgaged said land to PNB. Punsalan defaulted in his payments. PNB forclosed the property and was the highest bidder. Before acquiring title thereto, Punsalan who was still in possession of the land built a warehouse on said property. The warehouse was then leased for a period of 10 years. During the period of the lease, PNB acquired title to the parcel of land and then soon after was able to sell the land including the building and improvements on the land to Lacasama. Punsalan filed suit before the Court of First Instance asking for the annulment on said sale of the building plus damages. ISSUE: Whether or not the CFI is the proper venue to file such action? HELD: The warehouse claimed to be owned by petitioner is an immovable or real property as provided in article 415(1) of the Civil Code. Buildings are always immovable under the Code. A building treated separately from the land on which it stood is immovable property and the mere fact that the parties to a contract seem to have dealt with it separate and apart from the land on which it stood in no wise changed its character as immovable property. The action of the plaintiff is a real action affecting title to real property which, under Section 2, Rule 4 of the New Rules of Court, must be tried in the province

Bicerna vs. Teneza

FACTS: A complaint was filed int eh Court of First Instance (RTC) alleging that the defendants had forcibly demolished the house of the plaintiffs worth P200. The plaintiffs asked for damages or for a declaration that the materials belong to them. ISSUE Does the CFI (RTC) have jurisdiction? HELD: No, because no real property is being sued upon, the house having ceased to exist, and the amount of damages sought does not exceed the jurisdictional

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amount in inferior courts. HELD: They are personal (not real) properties. Be it noted that: a) they do not come under Par. 1 of Art. 415 because they are neither buildings or constructions adhered to the soil. b) they do not come under Par. 3 because they are not attached to an immovable in a fixed manner, that is, they can be separated without breaking the material or causing deterioration of the object to which they are attached; c) they do not come under Par. 5 because they are not machineries, receptacles, or instruments, but even if they are, they are not intended for an industry to be carried on in the premises.

Sibal vs. Valdez

FACTS: In a case brought by plaintiff against defendant, the latter won. For the purpose of satisfying the judgment won by the defendant, the sheriff attached the sugar cane that was then growing on the lots of the plaintiff. Said lots incidentally had already been previously attached by another judgment creditor of the plaintiff. Within one-year period given by law for redemption, the plaintiff wanted to redeem the lots from one creditor, and the sugar cane from the other creditor. The lots were redeemed, the redemption of the sugar cane was however refused by the defendant, who contended that the sugar cane was personal property, and therefor could not be the subject of the legal redemption sought to be enforced. The plaintiff upon the other hand claimed that the sugar cane was real property for same could be considered as growing fruits under par. 2 of Art. 415. ISSUE: How should the sugar can be regarded -- as real property or as personal property? HELD: The sugar cane, although considered as growing fruits and therefore ordinarily real property under Par. 2 of Art. 415 of the Civil Code, must be regarded as personal property for purposes of the Chattel Mortgage Law, and also for purposes of attachment, because as ruled by the Louisiana Supreme Court, the right to the growing crops mobilizes (makes personal, as contradistinguised from immobilization) the crops by anticipation. More specifically, it said that the existence of a right on the growing crop is a mobilization by anticipation, a gathering as it were, in advance, rendering the crop movable.

Tsai vs. CA
FACTS: EVERTEX executed a deed of Real and Chattel Mortgage with PBCom for a loan of P3,000,000 appended to the mortgage was a list of certain machineries and equipment. Subsequently, EVERTEX entered into a second loan for an amount P3,356,000 secured by a Chattel Mortgage over personal Properties attached with this load was a list of said properties. EVERTEX, due to business reverses, filed insolvency. All its assets were taken into the custody of the Insolvency Court, including the collateral, real and personal, securing the two mortgages. In result thereto, EVERTEX failed to meet its obligations to PBCom, the latter then commenced extrajudicial foreclosure proceedings. PBCom emerge as the highest bidder in both foreclosure proceedings. PBCon upon consolidation of its ownership over the lot and all the properties in it, leased the property to Tsai for P50,000 a month. Soon after sold the factory, lock, stock and barrel to Tsai for P9,000,000. EVERTEX contested the sale and aver that PBCom did not have any legal basis or factual basis to appropriate certain properties (contested properties), because they were not included in the Real and Chattel Mortgage nor in the Chattel Mortgage and neither were those properties included in the Notice of Sheriffs Sale and Certificate of Sale resulting from the foreclosure proceedings. ISSUES: 1. Whether or not the inclusion of the questioned properties in the foreclosed properties is proper? HELD: No. The subject mortgages were intended by the parties to involve chattels, insofar as equipment and machinery were concerned, the Chattel Mortgage Law applies, which provides in Section 7 thereof that: "a chattel mortgage shall be

Board of Assessment Appeals vs. Manila Electric Co.

FACTS: Charles Swift was awarded the franchise to construct, maintain and operate an electric street railway and electric light, heat and power system in the City of Manila. The company was later on called Meralco. In lieu of this, the company constructed 40 Steel Towers within Quezon City, on the land belonging to it. Three of said towers were then declared by the City Assessor of Quezon City liable for real property tax. ISSUE: Are the steel towers or poles of the Meralco considered real or personal properties?

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deemed to cover only the property described therein and not like or substituted property thereafter acquired by the mortgagor and placed in the same depository as the property originally mortgaged, anything in the mortgage to the contrary notwithstanding." And, since the disputed machineries were acquired after the said chattel mortgages, it was consequently an error on the part of the Sheriff to include the contested machineries with the properties enumerated in said chattel mortgages. FACTS: J. Sanchez owned land with a sugar house named Central Altagracia (CA or corporation). He leased this to S. Castello and a brother who may install equipment which after lease will belong to Sanchez. The lease ended but it was extended. This was not recorded in a public registry. The Castello brothers transferred rights acquired in the lease to F. Cornwell. The corporation retained its name. Under Cornwell, CA borrowed money from Nevers & Callaghan (N&C) to install new machinery. The corporation then sold its rights on the land to R. Valdez including all machinery. Valdez was to assume the obligation of the lease transferred by the Castellos to CA. Through all this, the plant operation continued. The sale of rights was made before a notary but not put on public records. Valdez then resold his rights to the company (this transaction was not again reflected in public records) with a condition that he holds title until he be fully paid. Meanwhile, the corporation defaulted on its loan from N&C. A judgment was rendered and N&C was to recover and levy on the machinery in the sugar house. Subsequent to N&Cs suit for recovery, the following occurred: (1) the heirs of Sanchez filed a case: either to recover property because Castello has no right to transfer or seek payment from lease; (2) one of both the Castellos sued the company on the theory that there was default in obligations assumed by the latter; and (3) discord broke out in Central Altagracia. CA sued Valdez on the ground that the sale was fictitious because when the company needed money, Valdez agreed to advance the amount if made president. When Valdez was made president, he did not pay the debt to N&C. A judge appointed a temporary receiver. Other creditors of the corporation joined and prayed for a receiver. The previous judgment in favor of N&C was retained pending appeal. The operation of the plant by the receiver was unsuccessful. There was no means of paying the debt except by way of the property of CA. The continued receivership was opposed by the heirs of Sanchez and N&C. N&C now wants to enforce the judgment of levy on the machinery. ISSUE: Whether or not N&C has the right to levy on the machinery. HELD: Yes. The machinery can be levied by N&C although the machines are immovable (by destination; although placed by a tenant, it is now immovable based on the lease agreement with Sanchez) because N&C was not given legal notice of the lease. This came about because the contracts between Sanchez and CA and Valdes and CA were not recorded in public instruments. As such, it cannot be prejudicial to third persons. To N&C, the machinery is movable, thus can be levied upon.

Berkenkotter vs. Cu Unjieng

FACTS: The Mabalacat Sugar Company borrowed from the defendant a sum of money, mortgaging as security two lots together with all its buildings and improvements. Later, to increase its productive capacity, the Company purchased additional machines a new sugar mill which were needed for the sugar industry. ISSUE: Are the additional machines also considered mortgaged? HELD: 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 machienry 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. 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.

Sergs Products vs. PCI Leasing

FACTS: In 1998, judge issued writ to seize Sergs machineries to satisfy PCI Leasings complaint for a sum of money. Sergs contends that under Art. 415, the machineries were immovable and cannot be the subject of seizure. ISSUE: May the machineries be seized? HELD: Yes. Although the machineries qualify as immovable property in Art. 415 par. 5, the parties stipulated in their contract that subject machineries are personal and not considered as real. They are estopped from claiming otherwise.

Valdez vs. Central Altagracia

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Alternative doctrine: The machinery would be considered as real property. Machinery placed on property by a tenant does not become immobilized: when however, a tenant places it there pursuant to a contract that it shall belong to the owner, it becomes immobilized as to that tenant and his assigns having notice, although it does not become so as to the creditors not having legal notice of the lease. Machinery which is movable in its nature becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or a person having only temporary right, unless such person acted as the agent of the owner. its rights over the mortgaged property would no longer be known and respected by third parties. The nullification of the TCT adversely affected its property rights, considering that a real mortgage is a real right and a real property by itself. In relation to Article 415: The bank as a mortgagee has a real right over the immovable property. This case gives an example of immovable property under Art. 415 (10).

CHAPTER 2 MOVABLE PROPERTY

ARTICLE 416-418
Art. 416. The following things are deemed to be personal property: (1) Those movables susceptible of appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personal property; (3) Forces of nature which are brought under control by science; and (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed. The following are also considered as personal property: (1) Obligations and actions which have for their object movables or demandable sums; and (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate Movable property is either consumable or nonconsumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others

Mindanao Bus vs. City Assessor

FACTS: City Assessor of Cagayan de Oro assessed tax on Mindanao Bus Cos equipment for bus repairs as they are immovable. Petitioner contends they are not principal equipments for the industry. ISSUE: Can the equipment be taxed? HELD: No. They are not immovable under Art. 415 par. 5. The tools and equipments in question in this instant case are, by their nature, not essential and principle municipal elements of petitioner's business of transporting passengers and cargoes by motor trucks.

Metropolitan Bank vs. Alejo

FACTS: Spouses Acampado obtained loans from the bank. They executed a real estate mortgage over a parcel of land registered in their names. Sy Tan Se filed a Complaint for Declaration of Nullity of the TCT against the spouses. The bank was not made a party thereto. The spouses defaulted and the bank acquired the lot through a winning bid. It executed an Affidavit for Consolidation of Ownership for the RD to issue a new TCT. Meanwhile, the RTC annulled the title of the spouses. The bank filed for annulment of the RTC decision. The CA dismissed. ISSUE: Whether or not the judgment on the civil case should be annulled. HELD: Yes. The property was mortgaged to the petitioner and such mortgage was annotated on the TCT before institution of the civil case. The nullification of the TCT carried with it the nullification and cancellation of the mortgage annotation. Although a mortgage affects the land and not merely its TCT, the cancellation of the TCT and the mortgage annotation exposed the bank to real prejudice because

Art. 417.

Art. 418.

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Memory Aid: Movable Properties under Article 416-417

LTO SNN
Those real property considered by Law as personal property All things which can Transported from place to place without impairment of the real property to which they are fixed. Obligations which have for their object movables Shares of stock Those movables suspeceptible of appropriation Not included in Article 415. Forces of Nature which are brought under control by science

A classification of things into fungibles and non-fungibles is a classification according to purpose, depending on whether they can be substituted by other things of the same kind, quality or quantity. The classification into consumable or non-consumable is according to the nature of the building. CASES

Sibal vs. Valdez

See case above under Article 415

Laurel vs. Abrogar

FACTS: Baynet Co. offered ISR (International Simple Resale) which is a method of re-routing PLDTs call lines abroad to avoid expenses. PLDT accuses Baynet of theft. ISSUE: Are telephone calls personal property? HELD: Yes. It was conceded that in making the international phone calls, the human voice is converted into electrical impulses or electric current which are transmitted to the party called. A telephone call, therefore, is electrical energy. Intangible property such as electrical energy is capable of appropriation because it may be taken and carried away. Electricity is personal property under Article 416 (3) of the Civil Code, which enumerates "forces of nature which are brought under control by science."

Three tests to Determine whether Property is movable or Immovable 1. If the property is capable of being carried from place to place (DESCRIPTION TEST) 2. If such change in location can be made without injuring the real property to which it may in the meantime be attached (DESCRIPTION TEST) 3. If finally, the object is not one of those enumerated of included in Article 415 (EXCLUSION TEST) Note: Exclusion test is SUPERIOR to description test. Consumabes and Non-Consumables Consumables things are those whose use according to their nature destroys the substance of the thing or causes their loss to the owner. Food is an example of a consumable thing; money in coin is a non-consumable. Fungibles and Non-Fungibles The quality of being fungible depends upon their possibility, because of their nature or the will of the parties, of being substituted by others of the same kind, not having a distinct individuality. These are generally the things whose individuality can be determined by counting, weighing or measuring. Ten heads of cattle or 100 copies of newspaper are examples of fungible things. On the other hand, non-fungibles are those which have their own individuality and do not admit of substitution. Example: ten bottles of wine which I have in my room. Distinction between Consumable and Fungibles

Sonny Lo vs. KJS Eco-Framework Systems

FACTS: Lo bought from KJS steel scaffoldings and made down payment. He was unable to pay subsequent installments so they signed a deed of assignment assigning Los receivables from Jomero Realty as payment. Jomero thereafter refused payment upon KJSdemand. ISSUE: Was Los obligation extinguished upon signing deed of assignment? HELD: No. Lo breached his obligation under the Deed of Assignment because he did not execute and do all such further acts and deeds as shall be reasonably necessary to effectually enable KJS to recover whatever collectibles KJS has, that is, he did not ensure that he had no unpaid obligation from Jomero so the it may not set-off what Lo owed it.

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CHAPTER 3 PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS
ARTICLE 419-424
Art. 419. Property is either of public dominion or of private ownership. Other of similar character under Paragraph 1 of Article 420 1. Public streams 2. Natural beds of river 3. River channels 4. Waters of rivers 5. Creeks 6. Lands thrown up by the sea and formed by accretion upon the shore by the action of the water, together with the adjacent shore 7. Lands reclaimed from the sea by government 8. The Manila Bay area or costal area 9. Private lands which have been invaded by the waters or waves of the sea and converted into portions of the shore or beach 10. Streets even when planted by persons with coconut trees Characteristics of Properties of Public Dominion 1. They are outside the commerce of man and cannot be leased, donated, sold, or be the object of any contract. 2. They cannot be acquired by prescription; no matter how long the possession of the properties has been. 3. They are not subject to attachment and execution 4. They cannot be burdened by any voluntary easement. 5. They cannot be registered under the Land Registration Law and be the subject of a Torrens Title; if erroneously included in a Torrens Title, the land involved remains property of the public domain. 6. In general, they can be used by everybody. 7. They may either be real or personal property as the law does not distinguish. Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

Properties are owned either in a public capacity (dominio publico) or in a private capacity (propiedad privado). The State may own properties both in public and in private capacity.

Definition of Public Dominion Public Dominion means ownership by the State in that the State has control and administration. In another sense, it means ownership by the public in general, in that not even the State or subdivisions thereof may make them the object of commerce as long as they remain properties for public use. Public dominion does not carry the idea of ownership; property of public dominion is not owned by the State, but pertains to the State, which as territorial sovereign exercises certain juridical prerogatives over such property. Their purpose is not to serve the State as a juridical person, but the citizens; they are intended for the common and public welfare, and so they cannot be the object of appropriation, either by the State or private persons. Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

Three kinds of Property of Public Domain 1. FOR PUBLIC USE like roads 2. FOR PUBLIC SERVICE like national government buildings 3. FOR THE DEVELOPMENT OF NATIONAL WEALTH like our natural resources

Definition of Patrimonial property Patrimonial property of the State is the property it owns but which is not devoted to public use, public service or the development of the national wealth. It is wealth owned by the State in its private capacity, as distinguished from its public capacity. Patrimonial properties may be acquired thru prescription.

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Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. Propwrty of public domain ceases to be such and becomes private property of the State only upon a declaration by the government, through the executive or legislative departments, to the effect that it is no longer needed for public use or service. It matters not whether the property is actually devoted to public use or public service. If the property has been intended for such use or service, and the government has not devoted it to other uses, or adopted any measure which amounted to a withdrawal thereof from public use or service, the same remains property for public use or service notwithstanding the fact that it is not actually devoted for public use or service. Mere possession of land does not itself automatically divest it of its public character. The National Government may donate its patrimonial property to a municipality and latter may own the same. A municipality is a juridical person capable of acquiring properties. When thus donated, the property becomes either property for public use or patrimonial property, depending on the use given to the property. When, for example, a municipality allows private persons to build on a land donated by the National Government and collects rentals, the property is patrimonial in character

Conversion of Properties of Political Subdivision for Public use to Patrimonial Apply Article 422 by analogy When a municipalitys properties for public use are no longer intended for such use, the properties become patrimonial. Art. 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. Property for public use by provinces and towns are governed by the same principles as property of public dominion of the same character. They are outside of the commerce of man, and therefore they cannot be the subject matter of private contracts, they cannot be acquired by prescription, and they are not subject to attachment and execution. They become private property of the province or town when no longer for public use, applying Article 422 by analogy. Art 424 enumerates the various kinds of properties of political subdivisions: 1. Property for public use 2. Patrimonial property Basis of Classification Under Art. 424, the basis of the classification would be the use. However, the National Government still controls the disposition of prprties of

Different rule for abandoned river beds Although, as a rule, property of public dominion when no longer used for public service shall form part of the patrimonial property of the State, Article 461 provides that an abandoned river bed belongs not to the State ut to the private land owner whose land is now occupied by the changed course, in proportion to the area lost. Art. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property.

Properties of Political Subdivisions Property for public use Patrimonial property Alienation of the Properties Properties of a political subdivision for public use cannot be alienated and may not be acquired by prescription. Properties of a political subdivision which are patrimonial in character may be alienated and may be acquired by others thru prescription. Donation by the National Government to a Political Subdivision

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political subdivisions regardless of the use to which they are devoted provided that the properties came from the State. The properties of provinces, cities and municipalities may also be classified into: 1. Those acquired with their own funds in their private or corporate capacity 2. Those held by the political subdivision in trust for the State for the benefit of the inhabitants. (Reason: the political subdivision owes its creation to the State. It is the States agent for the purpose of local administration). of the water at which it is completely dry, the latter should be considered as the "highest ordinary depth" of Laguna de Bay. Therefore, the land sought to be registered is not part of the bed or basin of Laguna de Bay. Neither can it be considered as foreshore land. The land sought to be registered not being part of the bed or basin of Laguna de Bay, nor a foreshore land as claimed by the Director of Lands, it is not a public land and therefore capable of registration as private property provided that the applicant proves that he has a registerable title.

Macasiano vs. Diokno

FACTS: An ordinance authorized the closure of certain streets in Paranaque and the establishment of flea markets thereon. Metropolitan Manila Authority approved such ordinance subject to the condition that the said streets are not used for vehicular traffic and that majority of the residents do not oppose the establishment of the flea market. Flea markets materialized but Brig. Gen Macasiano ordered the destruction of the stalls. ISSUE: WON the ordinance authorizing the lease and use of public streets or thoroughfares as sites for flea markets are valid? NO! HELD: Streets herein involved are local roads devoted for public service and are considered public properties of the municipality pursuant to Art. 424 of the Civil Code. The local government has no authority to control or regulate the use of public properties unless specific authority is vested upon them by Congress. Properties of public dominion devoted to public use and made available to the public in general are outside the commerce of men and cannot be disposed / leased to private persons. The closure should be for the purpose of withdrawing the road from public use when such property is no longer intended or necessary for public use/ service. When it is already withdrawn from public use, the property becomes patrimonial property of the LGU.

CASES

Laurel vs. Garcia

FACTS: Roponggi is a property of the Phils. In Japan. Pres. Aquino wanted to dispose of Roponggi through a sale. Prohibitions were filed against this action. ISSUE: Can Roponggi property be subject of bidding? HELD: No. The Roppongi property is for public service as dictated by the Reparations Agreement. It is of public dominion and is outside of the commerce of man. It cannot be alienated. The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State and intended for some public service. Its ownership is a special collective ownership for general use and enjoyment and thus, it serves the citizens.

Republic vs. Court of Appeals

FACTS: Del Rio purchased a land in Laguna de Bay and so he filed to register the land. Private oppositors who obtained permission from Del Rio to construct duck houses in the land opposed registration. Director of Land also refused registration on the ground that part of the land is foreshore land of Laguna de Bay. ISSUE: Can del Rio register land? HELD: Yes. The phrase "highest ordinary depth" has been interpreted to be the highest depth of the waters of Laguna de Bay during the dry season, such depth being the "regular, common, natural, which occurs always or most of the time during the year." Since the rise in the water level which causes the submersion of the land occurs during a shorter period (four to five months a year) than the level

City of Manila vs. IAC

FACTS: Vivencio is buried in a lot leased for 50 years in the North Cemetery. Said lot was certified pursuant to an Admin Order and believing that the lease was only for 5 years, authorities of the cemetery removed from said lot the remains of Vivencio as the said lot was rented out to another lessee. ISSUE: WON the operations and functions of a public cemetery are proprietary function of the City of Manila? YES!

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HELD: North Cemetery is a patrimonial property of the City of Manila. With the acts of dominion (administration and government of the cemetery; prescribing procedure and guidelines for the use / disposition of burial lots), it is within the class of property which Manila owns in its proprietary or private character. alienable. According to the SC, granting such is the case, the private corporation cannot alienate that land because it will violate the Constitution. Amari can only lease. (b) On the future reclaimed lands: According to the SC, they are not reclaimed as of yet and the land is of public domain. It cannot be subject of a sale or a contract. The JVA is null and void. PEA still owns the property.

Reclaimed Lands
Chavez vs. PEA
FACTS: The government entered into a contract to reclaim certain areas in Manila Bay for the construction of the Manila-Cavite road. Pres. Marcos created PEA and it was tasked to oversee the reclamation project. Pres. Cory granted the lands involved in the project to PEA and TCTs were issued to it covering the lands called Freedom Islands. PEA entered into a Joint Venture Agreement (JVA) with AMARI to develop the Freedom Islands. This agreement was approved by PEAs board of directors and Pres. Ramos. Senate Pres. Maceda claimed that the JVA was the grandmother of all scams. The Senate investigated the matter and concluded that the lands under the JVA were inalienable. As such, it cannot be sold to AMARI which is a private corporation. The TCTs covering the lands were void and the JVA illegal. The Legal Task Force created by Pres. Ramos investigated the matter and upheld the validity of the JVA. News reports mentioned that there were renegotiations between PEA and AMARI. Zulueta filed a case but it was dismissed. Chavez also filed a case seeking the disclosure of the terms of the renegotiations as well as assailing the validity of the sale of the lands. PEA and AMARI signed an amended JVA which was approved by Pres. Estrada. Chavez now prays that this be declared null and void. ALTERNATIVE FACTS: Amari, a private corporation, was tasked by PEA to reclaim the land in the Manila Bay. Whatever is reclaimed will be shared by PEA and Amari in a 70-30 division respectively. The Freedom Islands have already been reclaimed and subject to development. More areas along the Bay are to be reclaimed. ISSUE: What is the nature of (a) the Freedom Islands and (b) the lands to be reclaimed in the future? HELD: (a) On the Freedom Islands: They are reclaimed lands and as such, are a part of public domain and property of the government. Unless classified as alienable, it cannot be sold. There was no legislation from Congress declaring the islands as alienable. Pres. Cory issued a sales patent to PEA as a declaration that the land is

Phil. Fisheries Development Authority vs. CA

FACTS: Mun. of Navotas assessed the real estate taxes allegedly due from Phil Fisheries Devt Authority on properties under its management and operation located in Navotas Fishing Port Complex (NFPC). Taxes remained unpaid and the Municipality wanted NFPC to be sold at public auction. PFDA claims that NFPC was owned by Rep. of the Phils and is not a taxable entity. ISSUE: WON PFDAis liable to pay the real property tax? NO! HELD: PFDA, being an instrumentality of the national government, is exempt from real property tax, but the exemption does not extend to the portions of the NFPC leased to taxable or private persons and entities for their beneficial use. Art. 420 provides that property for public use such as ports constructed by the State are properties of the public dominion. The NFPC is one such property. The land in which NFPC sits is a reclaimed land, which belongs to the state. Reclaimed lands are lands of the public domain and cannot, without Congressional fiat, be the subject of a sale may it be public or private.

Others
Manila Lodge 761 vs. Court of Appeals
FACTS: The City of Manila was authorized to reclaim a portion of Manila Bay. Eventually, the City conveyed a portion of the reclaimed area to Manila Lodge No 761, Benevolent and Protective Order of Elks of the USA (BPOE, for short) with a right to repurchase. BPOE sold the same land to The Elks Club, Inc. A TCT was issued to The Elks Club, Inc. but the same was changed to the BPOE. The latter filed to cancel the Citys right to repurchase. This was granted by the court. Meanwhile, BPOE sold the land to Tarlac Development Corporation (TDC). The City filed to have the right of repurchase reannotated after 50 years from the execution of the sale. TDC filed a complaint. The trial court reaffirmed the order of reannotation but reserved the right to TDC to bring action to clarify its rights. The trial court

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eventually ruled that the land is public and that the sale is null and void. It also held that TDC is a purchaser in good faith and that BPOE is entitled to recover from the City of Manila. ISSUE: Whether or not the land is of public dominion. HELD: Yes. Article 344 (now Article 424) describes what properties are for public use. The reclaimed area is an extension of the old Luneta, a public park and for public use. As such, it has the same quality as Lunetapublic. The area was formerly a part of Manila Bay. It is a part of the national domain open to public use. Also, in order to be a property of public domain an intention to devote it to public use is sufficient. It is not necessary that a plaza be constructed or laid out in order that it is considered property for public use. Intention is sufficient. Although the government could convert it into a patrimonial property, such was not done in this case. It remained part of public dominion. The sale is null and void. stood from Nazareno. Lessees failed to pay and so they were ejected. Before Nazareno dies, he wanted to perfect his title over the accretion area subject of the controversy. He claims the area as his and a survey plan was approved by the Bureau of Lands. However, said plan was never released because respondents protested before the Bureau. ISSUE: WON the subject land is a public land? YES! HELD: Accretion as a mode of acquiring property under Art. 457 has the ff. requisites: (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the action of the waters of the river (or sea); and (3) that the land where the accretion takes place is adjacent to the banks or rivers (or the sea coast). These are called the rules on alluvion. Claimants have not met the first and second requirements because the accretion was formed by dumping of boulders and sawdust so the deposition of soil is not gradual and imperceptible and not a result of the action of water. Alluvion must be the exclusive work of nature and the requirement that the deposit should be to the effect of the current of the river is indispensable. Where the land is not formed by water current but is also a consequence of mans intervention, it is a man-made accretion and such is part of public domain.

Hilario v. City of Manila

FACTS: The Hilario estate is beside the San Mateo river. A flood destroyed the ditch and the river meandered into the estate creating a strip of land segregating it from the rest. The eastern part of this strip is the disputed land which stands between the old riverbed and the new course of the river. The City of Manila claims it can make extractions on the riverbed because this is of public domain. Issue: When a river, leaving its old bed, changes its original course and opens a new one through a private property, would the new riverbanks lining said course be of public ownership as well? HELD: Yes. All riverbanks are of public ownershipincluding those formed when a river leaves its old bed and opens a new course through a private estate. Art. 339 of the old Civil Code is very clear. It included riverbanks as property of public ownership. Riverbank is part of riverbed. The lower court is correct that banks of the river are part of its bed. All beds of rivers are public ownership, it follows that the banks which form part of them, are also of public ownership.

Government vs. Cabangis

FACTS: In 1896, A owned a parcel of land, but because of the action of the waves of Manila Bay, part of said land was gradually submerged in the sea,. It remained submerged until 1912 when the government decided to make the necessary dredging to reclaim the land from the sea. As soon as the land had been recovered A took possession of it. ISSUE: The ownership of the reclaimed land HELD: The government owns the reclaimed land in the sense that it has become property of the public domainion because in letting it remain submerged, A may be said to have abandoned the same. Having become part of the sea or the seashore, it became property for public use. When the government took steps to make it land again, its status as public dominion remained unchanged; therefore, A is not entitled to the land.

Vda. De Nazareno v. Court of Appeals

FACTS: A parcel of land was formed as a result of sawdust dumped into the driedup Balacanas Creek and along the banks of the Cagayan river and is herein the subject of controversy. Respondents leased the subject lots on which their houses

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Meneses vs. CA
FACTS: Darum, the District Land Officer of Los Baos, Laguna, issued to Pablito Meneses Free Patents and Certificates of Title covering the subject land. Meneses acquired said property from Bautista through a Deed of Waiver and Transfer of Rights in consideration of Bautista's "love and affection" for and "some monetary obligations" in favor of Pablito. After the execution of said document, Pablito took possession of the land, introduced improvements thereon, declared the land as his own for tax purposes and paid the corresponding realty taxes. Quisumbings filed a petition for the nullification of the free patents and titles issued to Pablito Meneses. They alleged that Lorenzo Meneses, then the Mayor of Los Baos, using his brother Pablito as a "tool and dummy," illegally occupied their "private accretion land", and, confederating with District Land Officer Darum and Land Inspector Almendral, obtained free patents and original certificates of title to the land. The CFI ruled in favor of the Quisimbings, finding that the lands registered by the Meneses brothers are accretion lands to which the Quisumbings have a valid right as owners of the riparian land to which nature had gradually deposited the disputed lots. ISSUE: W/N the lands were public domain, NOT accretion lands. HELD: NO. The land sought to be registered not being part of the bed or basin of Laguna de Bay, nor a foreshore land as claimed by the Director of Lands, it is not a public land and therefore capable of registration as private property provided that the applicant proves that he has a registerable title. Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the concurrence of these requisites: (1) that the deposition of soil or sediment be gradual and imperceptible; (2) that it be the result of the action of the waters of the river (or sea); and (3) that the land where accretion takes place is adjacent to the banks of rivers (or the sea coast). of petitioners is a creek constituting a tributary of the Agno River; therefore public in nature and not subject to private appropriation. The lower court likewise held that Resolution No. 38, ordering an ocular inspection of the Creek and Resolution No. 95 authorizing public bidding for the lease of all municipal ferries and fisheries, including the fishpond under consideration, were passed by respondents as members of the Municipal Council in the exercise of their legislative powers. Petitioners appealed but was denied. Hence, this petition for review on certiorari.

ISSUE: W/N the Compromise Agreement is null and void. HELD: YES. the parties desire to amicably settle the case by submitting to the Court a Compromise Agreement praying that judgment be rendered recognizing the ownership of petitioners over the land the body of water found within their titled properties. The stipulations contained in the Compromise Agreement partake of the nature of an adjudication of ownership in favor of herein petitioners of the fishpond in dispute, which, as clearly found by the lower and appellate courts, was originally a creek forming a tributary of the Agno River. A creek is a recess or arm extending from a river and participating in the ebb and flow of the sea, a property belonging to the public domain which is not susceptible to private appropriation and acquisitive prescription, and as a public water, it cannot be registered under the Torrens System in the name of any individual. Neither the mere construction of irrigation dikes by the National Irrigation Administration which prevented the water from flowing in and out of the subject fishpond, nor its conversion into a fishpond, alter or change the nature of the creek as a property of the public domain, the Court finds the Compromise Agreement null and void and of no legal effect, the same being contrary to law and public policy.

Dacanay vs. Asistio

FACTS: MMC Ordinance indicated that the authorizing and regulating of the use of certain city/municipality streets, roads and open spaces within Metro Manila for flea market and/or vending areas shall be subject to the approval of the Metropolitan Manila Commission. The trial court found that the mentioned streets are of public dominion, thus, outside the commerce of men. It disallowed the use of the streets as flea market and/or vending areas as it held based on different cases that properties for public use may not be leased to private individuals. The City has been allowing the stalls to proliferate on the streets and it must desist. Invoking the trial courts decision, Dacanay, a concerned citizen, residing in Heroes

Maneclang vs. Intermediate Appellate Court

FACTS: Petitioner Maneclang, et. al. filed a complaint for quieting of title over a certain fishpond located within the four 4 parcels of land belonging to them and the annulment of Municipal Resolutions Nos. 38 and 95. The trial court dismissed the complaint upon a finding that the body of water traversing the titled properties

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del 96 street, one of the affected streets, wrote a letter to the public officials concerned but his concerns were left unanswered. Dacanay then filed a complaint against the mayor and city engineer in the Ombudsman for dereliction of public duties through manifest partiality. The public officials insist that it would be harsh and inhuman to eject the stallowners and their dependents from the area in question as it would be hard to relocate them. The Ombudsman found that the public officials were purely motivated by their perceived moral and social responsibility toward their constituents, but found that there was an omission of an act to be performed. The Ombudsman then recommended the filing of the information in court. ISSUE: W/N public streets or thoroughfares can be leased or licensed to market stallholders by a city ordinance or resolution of the Metro Manila Commission. HELD: No, public streets or thoroughfares cannot be leased or licensed. The petition is meritorious. A public street is a property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it may not be the subject of lease or other contract. As stallholders pay fees to the City Government for the right to occupy portions of the public street, the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or licenses are null and void for being contrary to law. The right to use the city streets may not be bargained away through contract. The interests of a few should not prevail over the good of the greater number in the community whose health, peace, safety, good order and general welfare, the city officials are under legal obligation to protect. The order authorizing the use of the streets as vending areas contravenes the general law that reserves city streets and roads for public use. has already been withdrawn from public use and accordingly has become patrimonial propery. The lots sale was therefore valid

ARTICLE 425
Art. 425. Property of private ownership, besides the patrimonial property of the State, provinces, cities, and municipalities, consists of all property belonging to private persons, either individually or collectively.

By virtue of Art. 425, the Code recognizes the rights to private property. Collectively here refers to ownership by private individuals as co -owners, or by corporations, partnerships or other juridical persons allowed by the Civil Code to possess and acquire properties. Roads may be either public or private property. Aliens have no right to acquire any public or private agricultureal, commercial, or residential lands. The same rule applies to foreign corporations, even if it be a religious or non-stock foreign corporation. The constitutional provision against the acquisition of land by aliens is ABSOLUTE.

PROVISIONS COMMON TO THE THREE PRECEDING CHAPTERS ARTICLE 426

Art. 426. Whenever by provision of the law, or an individual declaration, the expression "immovable things or property," or "movable things or property," is used, it shall be deemed to include, respectively, the things enumerated in Chapter 1 and Chapter 2. Whenever the word "muebles," or "furniture," is used alone, it shall not be deemed to include money, credits, commercial securities, stocks and bonds, jewelry, scientific or artistic collections, books, medals, arms, clothing, horses or carriages and their accessories, grains, liquids and merchandise, or other things which do not have as their principal object the furnishing or

Cebu Oxygen & Acetylene vs. Bercilles

FACTS: The City Council of Cebu, in 1968, considered as an abandoned road, the terminal portion of one of its streets. Later it authorized the sale thru public bidding of the property. The Cebu Oxygen and Cetylene Co was able to purchase the same. It then petitioned the RTC of Cebu for the registration of the land. The petition was opposed by the Provincial Fiscal (Prosecutor) who argued that the lot is still part of the public domain, and cannot therefore be registered. ISSUE: May the lot be registered in the name of the buyer? HELD: Yes, the land can be registed in the name of the buyer, because the street

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ornamenting of a building, except where from the context of the law, or the individual declaration, the contrary clearly appears. Questions relating to ownership or even to the validity or discharge of a mortgage should generally be ventilated in an ORDINARY CIVIL ACTION OR PROCEEDING. Art. 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. The ownership has also a right of action against the holder and possessor of the thing in order to recover it.

TITLE II: OWNERSHIP CHAPTER I OWNERSHIP IN GENERAL ARTICLE 427 to 439

Art. 427. Ownership may be exercised over things or rights.

Codal Map for Rights of an Owner under Art. 428 in relation to other provisions

Ownership The independent and general right of a person to control a thing particularly in his possession, enjoyment, disposition, and recovery, subject to no restrictions except those imposed by the state or private persons, without prejudice to the provisions of the law. Kinds of Ownership: According to Paras: 1. 2. Full Ownership This includes all the rights of an owner. Naked Ownership This is ownership where the right to the use and the fruits has been denied. a. NOTE: Naked Ownership + Usufruct = FULL OWNERSHIP Sole Ownership Where the ownership is vested in only one person. Co-Ownership When ownership is vested to two or more owners.

3. 4.

According to Certeza: 1. 2. 3. Beneficial ownership right of its enjoyment is in one person where the legal title is in another. Full ownership includes all the rights of an owner. Naked ownership ownership where the right to use and to the fruits are denied. Rights of an Owner under the Civil Code 1. The Right to ENJOY a. Which includes: i. The Right to Possess ii. The Right to Use iii. The Right to the Fruits

Where Questions of Ownership should be decided

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2. The Right to DISPOSE a. Which includes: i. The Right to Consume or Destroy or Abuse ii. The Right to Encumber or Alienate The Right to RECOVER or VINDICATE It is a summary action to recover material or physical possession of real property when a person originally in possession was deprived thereof by force, intimidation, strategy, threat, or stealth. It prescribes within one (1) year. Unlawful Detainer (Desahucio) It is the action that must be brought when possession by a landlord, vendor, vendee, or other person of any land or building is being unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express, or implied. In short, to make out a case of unlawful detainer, the complaint must show that the withholding of possession or refusal to vacate is UNLAWFUL. The action must be brought within one (1) year from the time possession becomes unlawful. The issue is POSSESSION DE FACTO (material possession), not possession de jure nor ownership. Accion Publiciana It is intended for the recovery of the better right to possess, and is a plenary action in an ordinary civil proceeding before the Regional Trial Court. It must be brought within a period of ten (10) years. The issue is POSSESSION DE JURE, not possession de facto. Two kinds of accion publiciana 1. Where the entry was not obtained through Fraud, Intimidation, Stealth, Treat, or Strategy. 2. Where the one (1) year period for bringing forcible entry or unlawful detainer has already expired.

3.

Rights of an Owner under Roman Law 1. Jus Possidendi The Right to POSSESS a. The right to hold a thing or enjoy a right. 2. Jus Utendi The Right to USE a. This right includes the right to exclude any person. 3. Jus Fruendi The Right to the FRUITS a. The right to three kinds of fruits (Natural, Industrial, and Civil Fruits) 4. Jus Abutendi The Right to CONSUME (includes to TRANSFORM or ABUSE) 5. Jus Disponend The Right to DISPOSE 6. Jus Vindicandi The Right to RECOVER Actions to Recover Personal Property Replevin An action or provisional remedy where the complaint prays for the recovery of the possession of personal property. NOTE: Property already placed under legal custody may not be a proper subject of replevin. Actions to Recover Real Property 1. Forcible Entry or Unlawful Detainer Accion Interdictal 2. Accion Publiciana Plenary action to recover the better right of possession. 3. Accion Reivindicatoria Reivindicatory Action Additional Actions to Recover Real Property 1. Writ of Preliminary Mandatory Injunction 2. Writ of Possession Forcible Entry (Detentacion)

Accion Reivindicatoria It is the action to recover ownership over real property. It must be brought within ten (10) or thirty (30) years as the case may be, depending on whether the other party seeks to obtain ownership by ordinary or extraordinary prescription. The issue involved is OWNERSHIP, and for this purpose, evidence of title or mode may be introduced. Writ of Injunction Ordinarily, a person deprived of his possession of real or personal property, is not allowed to avail himself of this remedy, the reason is that the defendant in actual possession is presumed disputable to have the better right. However, under certain conditions, and in view of frequent delays in cases of this nature, this remedy may

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be availed of in the original case of forcible entry, and during appeal, in the case of unlawful detainer. Art. 431 The owner of a thing cannot make use thereof in such manner as to injure the rights of a third person.

Writ of Possession It is an order directing the sheriff to place a successful registrant under the Torrens system in possession of the property covered by a decree of the Court. This is used in connection with the Land Registration Law. The Limitations on Ownership 1. Those given by the State. a. I.e. Police Power, Power of Taxation, Power of Eminent Domain. 2. Those given by the Law. a. I.e. the legal easement of waters, the legal easement of right of way. 3. Those given by the owner (or grantee) himself. a. I.e. owner leases his property; owner cannot use the property while lease is still at force. 4. Those given by the person (grantor) who gave the ting to its present owner. a. I.e. donor may prohibit the donees from partitioning the property for a period not exceeding twenty (20) years. Art. 429 The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.

No Injury to Rights of Third Persons This is one of the fundamental bases of police power, and constitutes a just restriction on the right of ownership. Example: 1. Blowing your saxophone in the middle of the night. 2. Burning your house in the city. Art. 432 The owner of a thing has no right to prohibit the interference of another with the same, if the interference is necessary to avert an imminent danger and the threatened damage, compared to the damage arising to the owner from the interference, is much greater. The owner may demand from the person benefited indemnity for the damage to him.

State of Necessity This Article refers to a state of necessity as distinguished from the principle of selfhelp in Art. 429. Under the RPC, the state of necessity is a justifying circumstance. Example: 1. Driving over a cow in order to save your person from colliding in parallel walls. Art. 433 Actual possession under claim of ownership raises a disputable presumption of ownership. The true owner must resort to judicial process for the recovery of the property.

Doctrine of Self-Help It is the right to counter, in certain cases, force with force. Relate this with Article 11 of the Revised Penal Code on Self Defense, which includes defense to a persons property rights. Art. 430 Every owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted therein.

Disputable Presumption of Ownership Two requirements to raise a disputable (rebuttable) presumption of ownership: 1. Actual possession; and 2. Claim of Ownership NOTE: This Article applies to both immovable and movable property.

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Art. 434 In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendants claim. 1. 2. 3. 4. Taking by COMPETENT AUTHORITY Observation of DUE PROCESS OF LAW Taking for PUBLIC USE Payment of JUST COMPENSATION

Requisites in Action to Recover 1. Property must be identified a. Boundaries of the land sought must be proved. b. In case of doubt, the court may require each party to present plans prepared by a competent person. 2. Strength of the Plaintiffs Title a. Evidence of Ownership could be: i. Torrens Certificate ii. Spanish Title iii. Long and actual possession Art. 435 No person shall be deprived of his property except by competent authority and for public use and always upon payment of just compensation. Should this requirement be not first complied with, the courts shall protect and, in a proper case, restore the ownership in his possession. Eminent Domain This is a limitation on the right of ownership which may be exercised even over private properties of cities and municipalities, and even over lands registered with a Torrens title. According to Cooley, it is the right of the State to acquire private property for public use upon payment of just compensation. This is inherently possessed by the Legislature, but it may be validly delegated to local governments, other public entities, and public utilities. Eminent Domain Distinguished from Expropriation While eminent domain refers to the RIGHT, expropriation usually refers to the PROCEDURE, thru which the right is exercised. Essential Requirements of Eminent Domain

Competent Authority Authority as of Right The State Authority by virtue of grant Persons or Corporations offering Public Services Examples: 1. National Government (thru President) 2. City of Manila (thru the Municipal Board with the Mayors approval) 3. Provinces (thru the Provincial Board with the approval of the Executive Secretary of the President) 4. Municipalities (thru the municipal councils, with the approval of the Executive Secretary of the President) 5. Other public corporations (thru the Board of Directors, provided there is prior government approval) 6. The Manila Railroad Co. Due Process of Law There must be proper expropriation proceedings. It must include: 1. A notice to the owner of the property. 2. A full opportunity to present his side on whether or not the purpose of the taking is public; or whether the government reasonably needs the property. 3. Such other procedural requisites provided by law. Strict Construction Whenever an entity is granted the right to expropriate, the grant must be strictly construed. Public Use The question as to whether or not any specific or particular use is a public one is ultimately a judicial question. HOWEVER: If the Congress has specifically allowed expropriation of realty for a designated or specified public purpose, the courts of justice are not allowed to inquire into the necessity of such purpose.

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If the grant is merely a general one, courts have jurisdiction to decide whether the taking is indeed for a public use. In such case, the issue is a question of fact, and the Court should inquire into and hear proof upon the question. Difference between Sale and Expropriation A sale is voluntary while expropriation is involuntary. Thus, an owner who is willing to sell his property to the government, with a price mutually agreed upon, the transaction is a sale, and it is not essential to institute condemnation proceedings. Art. 436 When any property is condemned or seized by competent authority in the interest of health, safety or security, the owner thereof shall not be entitled to compensation, unless he can show that such condemnation or seizure is unjustified.

Doctrine of Reasonable Necessity Absolute necessity for expropriation is not required; all that is needed is a reasonable necessity for the public use intended. (Manila Railroad Co. vs. Michell). Payment of Just Compensation Just Compensation means a fair and full equivalent value of the loss sustained. Computation: Just Compensation = Market Value + (Consequential damages Consequential benefits) Market Value the price that the property will bring when it is offered for sale by one who desires, but is not obliged to sell it, and is bought by one who is under no necessity of having it. NOTE: Incidental or consequential benefits may be set off only against the consequential damages, and not against the basic value of the property taken. Effects of Expropriation on the Ownership of the Property Expropriated Ownership is transferred only when payment of just compensation with proper interest is made. (Jacinto vs. Director of Lands) The government shall restore the owner in his possession of the property if the owner will not be paid just compensation. If the property expropriated is no longer needed for the public use it was originally intended: o If the judgment gave full ownership to the plaintiff, he remains the owner even after the need has disappeared. o If the grant had been conditional, that is, that ownership would revert to the original owner, said condition is a valid one. Expropriation transfers ownership over all kinds of properties whether real or personal, tangible or intangible. (Metropolitan Water District vs. Director of Lands) Extraordinary Expropriation It is for the purpose of championing the cause of social justice to the end that public welfare will be enhanced.

Seizure as an Exercise of Police Power This article is based on the maxim that the welfare of the people is the supreme law of the land. Unlike eminent domain, police power needs no giving of just and financial compensation before it can be exercised. Police power can refer to condemnation, seizure, total destruction provided that the public interest is served and the means used are not unduly harsh, abusive or oppressive. A State in the exercise of police power may abate nuisances: Public nuisances that which affects a community or a considerable number of persons Private nuisances not public Nuisance per se nuisance under ALL circumstances Nuisance per accidens nuisance only under certain circumstances like a factory in a residential area Due Process When the government exercises police power and issues police regulations, the person concerned is not deprived of property without due process of law provided that the requisites of law were followed. Art 437 The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper without detriment to servitudes and subject to special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation.

Surface Right of a land owner

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This article deals with the extent of ownership which a person has over a parcel of land. He also owns its surface up to the boundaries, with the right to make thereon allowable constructions, plantings and excavations subject to servitudes or easements, special laws (ex. Mining Law), ordinances, reasonable requirements of aerial navigation and principles of human relations. It may also be further restricted by reasonable requirements of underground shelters and depots with proper State permission provided that the surface right is not substantially disturbed. The idea is if the ownership does not extend indefinitely upwards, it shouldnt extend indefinitely downwards. Regalian Doctrine Observed The State owns the mines and natural resources. If mines are discovered underneath the land of the owner, the mines belong to the State for the development of national wealth. This doctrine is for the benefit of the State and not of private persons. Art 438. Hidden treasure belongs to the owner of the land, building, or other property on which it is found. Nevertheless, when the discovery is made on the property of another or of the State or any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is a trespasser, he shall not be entitled to any share of the treasure. If things found be of interest to science or the arts, the State may acquire them at their just price, which shall be divided in conformity with the rule stated. Where hidden treasure may be found: on land, building or other property. Treasure found on ones own property If X finds hidden treasure on his house, he owns it and if he is married, it belongs to the conjugal partnership. Treasure found on anothers property For the finder to be entitled to the share, he must have found the hidden treasure by chance on the property of another. There must be no intent to look. BUT Paras believes the words by chance means by good luck whether there is a deliberate search or not because it would be extremely difficult to find hidden treasure without deliberately looking. If A asked B, land owner if he could look for treasure on his land and B allowed and subsequently A found treasure, how much of the treasure would go to A? It is believed that the treasure should be divided equally between finder and landowner even if there is deliberate search. Equity demands equal sharing because if the landowner did not give permission, the treasure would not be found and conversely, if the finder did not exert effort, the same would not have been found. Hidden treasure found on the land a usufruct is using will not benefit the usufruct. (Art 566 CC) If he finds it, he gets half as finder. If finder is a paid laborer If he really discovered the property by chance, he gets half. If he is employed precisely to look for treasure, he gets nothing but he is entitled to salary. Also, treasure hunts where the owner hires a group to find treasure will not entitle them to half. The contract of service will be followed. Expropriation If treasure is scientifically or artistically valuable, the state may acquire it at just price. This is a practice of eminent domain. Trespasser He is not entitled to half even if he finds treasure. Art. 439 By treasure is understood, for legal purposes, any hidden and unknown deposit of money, jewelry and other precious objects, the lawful ownership of which does not appear.

Requisites: a. Hidden and unknown deposit b. Consists of money, jewelry or other precious objects c. Lawful ownership does not appear Precious objects, following the doctrine of ejusdem generis, refer of the same class as money, jewelry and not embedded in soil like minerals.

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Hidden by owner If the owner hid the treasure, it cannot be considered hidden treasure as long as ownership can be proved. If he forgot about it and gave up all hope of recovering it, the same may be considered as hidden treasure as it is already abandoned. Death of lawful owner If the ownership of treasure is known but the owner died, the same will not be hidden treasure and must go to heirs. o o Not mentioned as a mode of acquiring ownership under Art. 712. Accession presupposes a previously existing ownership and therefore a derivative of ownership In accession discrete - it is merely a realization of the natural end of ownership. In accession continua - ownership of what was built, planted or sown is acquired as a consequence of the ownership of the thing to which it is attached.

CHAPTER 2 RIGHT OF ACCESSION ARTICLE 440

Art. 440. The ownership of property gives the right by accession to everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially.

Note: Art. 461 provides that when the river changes course, the abandoned riverbed ipso facto belongs to the owner of the land occupied by the new course of the river. The right to accession is ipso jure, requiring no prior act on the part of the owner of the principal.

CODAL MAP OF THE RIGHT TO ACCESSION

Definition of Accession Accession is the right of a property owner to everything which is (a) Produced thereby (accession discreta) (b) Or which is incorporated or attached thereto, either naturally or artificially (accession continua), which in turn is divided into 1) Natural accession (accession natural) 2) Artificial accession (accession industrial) Manresa: Accession is an extension or consequence of ownership. It is ownership in action.

Legal Basis The ownership of property gives the right by accession to everything that is produced thereby, or is incorporated or attached thereto, either naturally or artificially. (Art. 440) Nature of Accession Not a mode of acquiring ownership but merely an extension or consequence of ownership. Reason:

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SECTION 1 RIGHT OF ACCESSION WITH RESPECT TO WHAT IS PRODUCED BY PROPERTY (ACCESSION DISCRETA) ARTICLE 441 to 444
Art. 441. To the owner belongs: (1) The natural fruits; (2) The industrial fruits; (3) The civil fruits. QUERY: Are cultivated trees in themselves to be considered fruits? Paras submits that they are not fruits in the juridical sense for they are really immovables as long as they are still attached to the land, which may themselves produce fruits. However, there is no doubt we may consider said trees as fruits when they are expressly cultivated or exploited to carry on an industry. QUERY: To whom does the offspring of animals belong when the male and female belong to different owners? Under the Partidas, the owner of the femal was considered also the owner of the young, unless there is a contrary custom or speculation. In US vs Caballero, it was held that the legal presumption, in the absence of proof to the contrary, is that the calf, as well as its mother belong to the owner of the latter, by right of accretion. This is in accord with the maxim pratus sequitor ventrem (the offspring follows the dam or mother). Civil Fruits Civil fruits consist of (a) Rent of buildings (b) Price of leases (rentals) of lands and other property (c) The amount of perpetual or life annuities or other similar income. CASES Three kinds of fruits

This article refers to accession discrete which is defined as the right to the ownership of fruits produced by our property Natural fruits are the spontaneous products of the soil, and the young and other products of animals. Industrial fruits are those produced by lands of any kind through cultivation or labor. Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. The term natural, industrial, and civil fruits as defined by the Code are highly technical. There can be no doubt as to their meaning.

Art. 442.

US vs. Caballero
FACTS: Pellire accused, then municipal president, Caballero. Stolen cow worth P35The criminal acts charged against the accused consists in that, when Pellire passed in front of the house of Caballero, leading a cow by the halter, the accused came down out of the house, offered him P4.50 for the animal and tendered him the money, and, because Pellire would not accept it, "took the rope out of his hand and kept the cow, saying besides that he would send policemen to arrest him." ISSUE: W/N defendant was the owner of the cow. HELD: No, Pellire is owner. It is impossible for the co-owner to call himself the exclusive owner of the thing held in common, without proof of a partition or

Natural Fruits There are two kinds of natural fruits: (a) The spontaneous products of the soil (Note: no human intervention) Examples common grass, herbs (b) The young and other products of animals Examples chicken and chicken eggs Industrial Fruits They are those produced by lands of any kind thru cultivation or labor Examples all kinds of cultivated vegetables, palay and corn

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division thereof, and thereby such thing would have ceased to be property of joint ownership. This proof was not given, nor even offered. It is evident that Paulino Caballero did not act as a creditor toward a debtor and seize a thing belonging to the latter in order therewith to satisfy the debt, but, at the worst, his conduct was that of a co-owner who, under his own authority (if the charges are true, which is not admitted) wished to exercise the right of redemption with which unquestionably he was civilly vested, a right not comprised within the said article 498. The present status of the case is that of a title of transfer upon which, rightly or wrongly, the defendant relies, a title which, neither civilly nor criminally, has been assailed as false and cannot be passed by without the proper judicial pronouncement thereon, inasmuch as it is in form a legal title authorized by a public officer designated by the law, such as was the municipal treasurer of Badian who issued it as the certificate of ownership now required and which constitutes, pursuant to Act No. 1147, a presumption juris tantum that the animal in question belongs to the person designated in the said certificate. industrial, and civil fruits of the property in usufruct. Art. 474 Civ. Code Civil fruits accrue day by day, and belong to the usufructuary in proportion to the time the usufruct may last. c) Art. 475 Civ. Code When a usufruct is created on the right to receive an income or periodical revenue, either in money or fruits xxx each matured payment shall be considered as the proceeds or fruits of such right. xxx In either case they (profits) shall be distributed as civil fruits, and shall be applied in accordance with the rules prescribed in the next preceding article. The shares of stock are part of the property of the usufruct. They represent profits, and delivery of the stock certificate is equivalent to payment of said profits. Said shares may be sold independently of the original shares, like the offspring of animals may be sold independently of their mother. b)

Bachrach Motors vs. Talisay-Silay Milling Bachrach vs. Seifert

FACTS: Bachrach bequeathed to his wife for life all the fruits and usufruct of the remainder of all his estate after payment of the legacies, bequests, and gifts provided in his will, and she may enjoy said usufruct and use or spend such fruits in any manner she wished. Bachrach owned 108,000 shares of stock in the Atok-Big Wedge Mining Co., and his estate received 5o% or 54,000 shares of the stock dividend. Mary (wife) as usufruct petitioned the lower courts to transfer to her the 54,000 shares of stock by delivering to her the corresponding stock certificate, claiming that said dividend is fruit or income which belonged to her being usufruct. Seifert and Elianoff (legal heirs) opposed said petition claiming that the dividends were not fruit but formed part of the capital which thus belonged to the remainderman not the usufruct. Massachusetts rule (cash dividends are income, but stock dividends are capital) vs Pennsylvania rule (all dividends are income) ISSUE: W/N a stock dividend is a fruit. HELD: YES.. The SC adopts the Pennsylvania rule which is more accord with our laws. Under Sec. 16 of the Corporation Law no corporation may make or decide any, dividend except from the surplus profits arising from its business. THEREFORE, any dividend, whether cash or stock, represents surplus profits. a) Art. 471, Civ. Code the usufructuary is entitled to receive all the natural, FACTS: The complaint was filed by petitioner Bachrach Motor against Talisay-Silay Milling Corporation (a sugar central) for the delivery of the amount of the bonus that was due/payable to Ledesma (one of the sugar centrals planters). It was also prayed that the sugar central render an accounting of the amounts it owed to Mariano Lacson Ledesma by way of bonus, dividends or otherwise. The PNB filed a third party claim (intervenor) alleging a preferential right to receive the bonus that Ledesma was due to receive from sugar central. It alleges that it is entitled to the bonus as the bonus is to be considered as civil fruits of the land mortgaged to the bank by Ledesma. ISSUE: W/N Ledesmas bonus is civil fruit. HELD: NO, Bachrach should be given preference to the bonus. It is neither rent of a building or of land as contemplated in Art. 355 of the Civil Code nor is it income from the mortgaged land. As the bonus in question is not rent of a building, or of land, the only meaning of civil fruits left to be examined is that of income. It should be inquired whether it is derived from the land mortgaged by Ledesma or not; if it is not, then, it is not a civil fruit of the land. The bonus bears only a remote and accidental relation to the land mentioned, having been granted as compensation for the risk of having subjected ones land to a lien in favor of the bank, for the benefit of the central. Hence, the amount of the bonus is not based on the value, importance or any other circumstance of the mortgaged property, but upon the total value of the debt thereby secured, according to the annual

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balance, which is distinct from and independent of the property referred to. Art. 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering, and preservation. The recipient of the fruits has a duty to reimburse necessary expenses. Art. 442 does not apply when the planter is in good faith because in this case, he is entitled to the fruits already received, hence, there is no necessity of reimbursing him The expenses referred to in Art. 433 must have been used for production, gathering or preservation, NOT for the improvement of the property.

RIGHT OF ACCESSION WITH RESPECT TO IMMOVABLE PROPERTY ARTICLE 445-446

Art. 445. Whatever is built, planted or sown on the land of another and the improvements or repairs made thereon, belong to the owner of the land, subject to the provisions of the following articles.

QUERY: Suppose the expenses exceed the value of the fruits. Must there still be a reimbursement for the expenses? Paras answers in the affirmative. This is because: (a) The law makes no distinction (b) The same thing would have happened had the owner been also the planter (c) He who gets expected advantage must be prepared to shoulder losses. Art. 444. Only such as are manifest or born are considered as natural or industrial fruits. With respect to animals, it is sufficient that they are in the womb of the mother, although unborn. Two kinds of crops 1. Annual Crops (like cereals, grains, rice, corn, sugar) are deemed manifest the moment their seedlings appear from the ground. 2. Perennial Crops (like oranges, apples, mangoes) are deemed to exist only when they actually appear. The young of animals are already considered existing even if still in the material womb.

Art. 455 deals with accession continua or more specifically ACCESSION INDUSTRIAL (aka BUILDING, PLANTING, SOWING). Basic Principles of Accession Continua To the owner of the principal must belong also the accessions. The accessory follows the principal (accesio cedit principali). The union or incorporation must, with certain exceptions, be effected in such a manner that to separate the principal from the accessory would result in substantial injury to either. He who is in good faith may be held responsible but he should not be penalized. He who is bad faith may be penalized. No one should enrich himself unjustly at the expense of another. Bad faith of one party neutralizes the bad for the other so both should be considered in bad faith. NOTE: Article 120 of the Family Code, which provides that ownership of improvements, made on the separate property of the spouses at the expense of the partnership or through the acts or efforts of either or both spouses shall pertain to the conjugal partnership or to the original owner-spouse is an EXCEPTION to General Rule that Owner of the Land is also the Owner of whatever is built, planted or sown thereon. Art. 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the contrary is proved.

The two juris tantum (disputable) presumptions under this Article are: (a) The works, sowing, and planting were made by the owner. (b) They were made at the owners expense. CASES

SECTION 2

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Building, planting or sowing on ones own land with own materials

PROVISION MAP FOR ART. 447

Gaboya vs. Cui

FACTS: In the deed of sale vendor CUI retained for himself the usufruct of the property he sold to his 2 children. Subsequently, a building was erected on a portion of this mass facing Calderon street and was occupied by a Chinese businessman for which he paid Don Mariano P600 a month as rental. Sometime after the sale to the children, the two applied to the RFC for a loan of P130,000 with which to construct a 12-door commercial building presumably on a portion of the entire parcel corresponding to their share. In order to facilitate the granting of the loan and inasmuch as only two of the three co-owners applied for the loan, Don Mariano executed an authority to mortgage the property authorizing his two children co-owners to mortgage his share, the pertinent portion of said authority reading thus: " I hereby agree and authorize my said co-owners to mortgage, pledge my share so that they may be able to construct a house or building in the said property, provided however, that the rents of the said land shall not be impaired and will always be received by me." ISSUE: W/N the usufructuary has the right to receive the rentals of the building. HELD: NO. The reserved usufruct in favor of Cui was limited to the rentals of the land alone. Under the articles of the Civil Code on industrial accession by modification on the principal land (Articles 445 to 456 of the Civil Code) such accession is limited either to buildings erected on the land of another, or buildings constructed by the owner of the land with materials owned by someone else. Important points in Article 447 The landowner cannot choose to return the materials in lieu of reimbursement. (Manresa)

ARTICLE 447
Art. 447. The owner of the land who makes thereon, personally or through another, plantings, constructions or works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of the materials shall have the right to remove them only in case he can do so without injury to the work constructed, or without the plantings, constructions or works being destroyed. However, if the landowner acted in bad faith, the owner of the materials may remove them in any event, with a right to be indemnified for damages.

Reasons: o This is not provided by the Code. o The material is already transformed. EXCEPTION: If the material is not transformed, it can be returned at the expense of the landowner.

CASES

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If the landowner acted in good faith

Pacific Farms vs. Esguerra

FACTS: Carried Lumber Company sold & delivered lumber and construction materials to Insular Farms Inc., w/c the latter used for the construction of its 6 buildings in Bolinao, Pangasinan. The procurement price is 15K but the sum of P4,710 was not yet paid by Insular Farms, hence, the Lumber company sued the former in the CFI of Pangasinan for the unpaid balance. The CFI ruled in favor the Lumber Company and a writ of execution was issued whereby the sheriff levied rd upon the 6 buildings. Pacific Farms instituted a 3 party complaint claiming ownership to the 6 buildings by virtue of a deed of absolute sale executed by Insular Farms 7 months before the Lumber Company filed the civil case. ISSUE: W/N Article 447 is applicable. HELD: YES. The application by analogy of the rules of accession would suffice for a just adjudication. Applying article 447 by analogy, the buildings are considered as the principal and the lumber and construction materials that went into their construction as the accessory. Thus the appellee, if it does own the six buildings, must bear the obligation to pay for the value of the said materials; the appellant which apparently has no desire to remove the materials, and even if it were minded to do so, cannot remove them without necessarily damaging the buildings has the corresponding right to recover the value of the unpaid lumber and construction materials.

When applied: Intended to apply only to a case where one builds, plants, or sows on land which he believes himself to have a claim of title. (Tolentino) Consequently, it does not apply: o If BPS is a lessee because the lessee knows that he is a mere holder who does not have title. o If BPS is a co-owner because then, his rights as co-owner is determined by the rules on co-ownership. EXCEPTION: Del Ocampo vs. Abesia where the property co-owned has already been partitioned.

Rationale It presents a solution to the conflict of rights which arises between two owners: the BPS and the owner of the land upon which the thing is BPS, in good faith. The article avoids the existence of a state of forced co-ownership, which is not conducive to public order. Options of the Landowner when anything has been built, planted or sown in good faith 1. To appropriate what has been built, planted, or sown by paying after payment of indemnity as well as necessary expenses and useful expenses 2. Require builder to pay price of the land or the sower proper rent. Notes:

ARTICLE 448 TO 454

Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

The builder cannot be obliged to buy the land if its value is considerably more than that of the building. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. ALSO, the landowner cannot refuse to exercise his option.

Please see codal map for Art 448 to 454

Indemnities to be Given (a) Necessary Expenses (Art. 546, para. 1) (b) Useful Expense (Art. 546, para. 2) (c) Luxurious Expenses if he desires to appropriate them for himself (Art. 548).

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1. Why option is given to the landowner and not to the builder His right is older By the principle of accession, he is entitled to the ownership of the accessory thing Right of the landowner before he makes the choice Before the landowner exercises the option, he is not yet the owner of whatever has been built, planted, or sown, for his only right in the meantime is to exercise the option. Neither the builder nor landowner may oust each other, for until indemnity is paid, the builder has the right of retention. Note: This applies if both are in good faith. Art. 449. He who builds, plants, or sows in bad faith on the land of another loses what is built, planted or sown without right to indemnity. The owner of the land on which anything has been built, planted or sown in bad faith may demand demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition Art. 452. To appropriate what has been built, planted, or sown, without any obligation to pay indemnity therefore but with obligation to pay under Art. 452 necessary expenses for the preservation not of the improvement bit of the land PLUS damages To ask the builder, planter or sower to remove what he has built, planted, or sown (The right or remotion), at the builders expense, PLUS damages To compel the builder or planter to pay the value of the land, whether or not the value of the land is considerably more than the value of the house, or the sower the proper rent PLUS damages.

2. 3.

NOTE: See Codal map for Art 448 to 454 Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land.

Art. 450.

Necessary expenses are those made for the preservation of the thing or those without which the thing would deteriorate or be lost. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith. It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part.

Art. 453.

When in Bad Faith? Landowner There is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. (Art. 453) Builder, Planter, Sower The BPS acts in bad faith when he builds, plants, or sows, knowing that the land does not belong to him and he has no right to build, plant, or sow thereon.

The bad faith of one neutralizes the bad faith of the other, so both will be considered in good faith. When the landowner acted in bad faith and the builder, planter or sower proceeded in good faith, the provisions of Article 447 shall apply.

Three alternative rights of the owner of the land on which anything has been built, planted or sown in bad faith:

Art. 454.

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If landowner is in bad faith but the builder, planter or sower is in good faith, we apply Art. 447.

CODAL MAP ART 448 TO 454

Manotok Realty vs. Tecson

FACTS: A complaint filed by the MANOTOK REALTY for recovery of possession and damages against MADLANGAWA, the then CFI rendered judgment declaring Madlangawa as a builder or possessor in good faith; ordering the plaintiff to recognize the right of said defendant to remain in Lot No. 345, Block 1, of the Clara Tambunting Subdivision until after he shall have been reimbursed by the plaintiff the sum of P7,500. ISSUES: W/N MADLANGAWA was a BUILDER in GF. YES. W/N MADLANGAWAs GF ceased after the filing of the complaint. YES. W/N the repairs and improvements introduced after the complaint was filed were NOT BUILT in GF. YES. HELD: Under Article 448, the right to appropriate the works or improvements or to oblige the one who built or planted to pay the price of the land' belongs to the owner of the land. The only right given to the builder in good faith is the right to reimbursement for the improvements; the builder, cannot compel the owner of the land to sell such land to the former. To be deemed a builder in good faith, it is essential that a person assert title to the land on which he builds; i.e., that he be a possessor in concept of owner and that he be unaware 'that there exists in his title or mode of acquisition any flaw which invalidates it. It is such a builder in good faith who is given the 1ight to retain the thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful expenses. Furthermore, the private respondent's good faith ceased after the filing of the complaint below by the petitioner. Although the bad faith of one party neutralizes that of the other and hence as between themselves their rights would be as if both of them had acted in good faith at the time of the transaction, this legal fiction of good faith ceased when the complaint against him was filed, and consequently the court's declaration of liability for the rents thereafter is correct and proper. A possessor in good faith is entitled to the fruits only so long as his possession is not legally interrupted, and such interruption takes place upon

CASES IF BOTH THE LANDOWNER AND THE BUILDER, PLANTER OR SOWER (WHO IS AT THE SAME TIME THE OWNER OF THE MATERIALS) ACTED IN GOOD FAITH. Concept of Good Faith o Good faith of the builder, planter or sower

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service of judicial summons (Arts. 544 and 1123, Civil Code). property. A Deed of Sale to Pombuena (her husband) was executed with the consideration P50.00 that was never paid for it was only a simulated price, in favor of the said couple. Through fraud, error and/or mistake Pombuena obtained title in his name. She leased portion of her inherited land to the defendant, Tan Queto. During the existence of the lease contract Tan Queto had shown unusual interest in the property by sending different persons persuading the plaintiff to sell or barter the property to him. In spite of the firm refusal of the plaintiff not to sell the property, without her knowledge and consent, through deceit and misrepresentation, Tan Queto, finally succeeded in unduly influencing the Pombuena, into signing a barter contract. After she knew of the barter contract, the she immediately protested against this deceitful act. ISSUE: W/N TAN QUETO be regarded as a BUILDER in GF. HELD: YES. Even assuming that despite registration of the lot as conjugal, Tan Queto nursed the belief that the lot was actually Guangco's (making him in bad faith), still Guangco failed to prohibit him from building despite her knowledge that construction was actually being done, makes her also in bad faith. The net resultant of mutual bad faith would entitle Tan Queto to the rights of a builder in good faith (Art. 448, Civil Code), ergo, reimbursement should be given him if Guangco decides to appropriate the building for herself (Art. 448, Civil Code). However, Tan Queto bartered his own lot and small house with the questioned lot with Pombuena (who has been adverted to by a court decision and by the OCT a conjugal owner) may be said to be the OWNER-POSSESSOR of the lot. Certainly he is a builder-possessor jus possidendi because he is the OWNER himself. The difference between a builder (or possessor) in good faith and one in bad faith is that the former is NOT AWARE of the defect or flaw in his title or mode of acquisition while the latter is AWARE of such defect or flaw (Art. 526, Civil Code). In this case there is no such flaw or defect because it is he himself (not somebody else) who is the owner of the property.

Mercado vs. Court of Appeals

FACTS: the Bulaong Group were individual lessees of stalls in a public market. The Market was destroyed by fire. The Bulaong Group thereafter constructed new stalls at their own expense. Members of the group subleased their individual stalls to the Mercado Group. After some months, the Municipal Officials cancelled the long standing lease of the Bulaong Group and declared the Mercado Group as the rightful lessees of the stalls in question, in substitution of the Bulaong Group. This was based on a violation of Municipal Ordinance No. 14 which prohibits the subleasing of stalls by the lessees and a directive from the Office of the Executive Secretary requiring enforcement of said ordinance. The Bulaong Group sued to recover the stalls as well as for damages. They argued that they were the owners of the stalls and as such, could sublease it and recover it from any person in possession thereof. ISSUE: W/N the Bulaong group were BUILDERS in GF. HELD: NO. THERE IS A LESSOR-LESSEE RELATIONSHIP. To be deemed a builder in good faith, it is essential that a person assert title to the land on w/c he builds . He must be a possessor in the concept of an owner. He must also be unaware that there exists in his title or mode of acquisition any flaw which invalidates it. It is such a builder in good faith who is given the right to retain the thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful expenses. REMEDY AVAILABLE TO THE BULAONG GROUP: A lessee who makes in good faith useful improvements which are suitable to the use for which the lease is intended, w/o altering the form or substance of the property leased, can only claim payment of of the value of the improvements or should the lessor refuse to reimburse said amount, remove the improvements even though the principal thing may suffer damages thereby.

Pleasantville Development vs. Court of Appeals

FACTS: Robillo purchased from Pleasantville a parcel of land designated as Lot 9. JARDINICO bought the rights to the lot from Robillo. At that time, Lot 9 was vacant. Jardinico secured a TCT in his name. It was then he discovered that improvements have been introduced by KEE, who had taken possession thereof. It appears that Kee bought on installment Lot 8 of the same subdivision from CTTEI, the exclusive real estate agent of Pleasantville. Under the contract, Kee could possess the lot even before the completion of all installment ppayments. Kee paid CTTEI for

Tan Queto vs Court of Appeals

FACTS: Restituta Guangcos mother wished and instructed that after her (mother) death, 1/2 portion of the aforementioned lot be given to Buenaventura Guangco and the other half be given to Restituta. Thus, became her only paraphernal

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preparation of the lot plan. These amounts were paid prior to Kees taking actual possession of Lot 8. After the preparation of lot plan and a copy thereof was given to Kee, CTTEI, through its employee, OCTAVIANO accompanied Kee and his wife to inspect Lot 8. Unfortunately, the parcel of land that Octaviano pointed was Lot 9 which was owned by Jardinico. After discovery that Lot 9 was occupied by Kee, Jardinico confronted him. The parties failed to reach an amicable settlement . ISSUE: W/N Kee was a BUILDER in GF. HELD: YES. Kee had acted in the manner of a prudent man in ascertaining the identity of his property. Under the Torrens System, Kee is presumed to have knowledge of the metes and bounds of the property with which he is dealing. But as Kee is a layman not versed in the technical description of his property, he has to find a way to ascertain that what was described in the TCT matched Lot 8. Thus, he went to the subdivision developers agent (CTTEI) and applied for a lot plan. Upon Kees receipt of the plan, he and his wife went to the subdivision site where Octaviano authoritatively declared that the land she was point to was indeed Lot 8 (which turned out to be Lot 9). Doctrine: Good faith consists in the belief of the builder that the land he is building on is his and his ignorance of any defect or flaw in his title. Good faith is presumed. Thus, Pleasantville and CTTEI have the burden of proving bad faith on the part of Kee. They failed to do so. their old house with new and bigger ones cannot enervate the rights of the registered owners. Otherwise, the rights of the latter to enjoy full possession of their registered property could be indefinitely defeated by an unsuccessful opponent through the simple subterfuge of replacing his old house with a new one from time to time.

A lessee is not a builder in good faith

Balucanag vs. Francisco

FACTS: Charvet leased a lot Stohner for a period of five years at the monthly rental of P40. The lease contract provided, among others, that Stohner may erect buildings and make improvements on the land as he sees fit. But he has to remove it within a period of two months after the expiration of the contract. Mrs. Charvet may also remove the buildings and improvements or cause them to be removed at the expense of Mr. Stohner. Stohner made fillings on the land and constructed a house. His expense is approximately valued at P35,000. When the lease contract ended, Mrs. Charvet acquiesced to Mr. Stohners occupation of the lot. However, Charvet sold the lot to Rosendo Balucanag. Stohner failed to pay the rents and Balucanag made demands. Stohner offered to purchase the lot or asked for a reimbursement on the improvements and construction on the lot. No agreement was reached, thus Balucanag instituted an ejectment suit. ISSUE: W/N Stohner can be considered a BUILDER in GF. HELD: NO. Article 448 of the Civil Code, relied upon by the CFI, applies only to a case where one builds on land in the belief that he is the owner and it does not apply where ones only interest in the land is that of a LESSEE under a RENTAL contract. The law applicable to the case at bar is Article 1678. This article gives the lessor the option to appropriate the useful improvements by paying of their value, and the lessee cannot compel the lessor to appropriate the improvements and make reimbursement, for the lessees right under the law is to remove the improvements even if the leased premises may suffer damage. But he shall not cause any more damage upon the property than is necessary.

Baltazar vs. Claridad

FACTS: The trial court awarded the subject lot to the spouses Baltazar and Valencia as their conjugal partnership property. Said decision having become final, the corresponding decree was issued and said lot was registered in the names of spouses. Baltazars surviving wife and children filed a motion, in the cadastral case praying for writ of possession against the Caridads, who had been in possession of the southern portion of the subject Lot, while the cadastral case involving said lot was pending before the trial court. ISSUE: W/N the Caridads can be considered as BUILDERS in GF. HELD: NO. The Caridads are bound by the 1941 decree of registration that obligated their parents and predecessors-in-interest. Good faith must rest on a colorable right in the builder, beyond a mere stubborn belief in one's title despite judicial adjudication. The fact that in 1959 the Caridads demolished and replaced

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Lopez Inc. vs. Phil and Eastern Trading Co.
FACTS: Philippine & Eastern Trading Co was a lessee occupying two doors with a mezzanine at the Lopez Bldg in Baguio, owned by Lopez Inc. Defendant used it as a store and paid P160 monthly rental. During the bombing of Baguio in 1945, the building was seriously damaged leaving only concrete walls and framework. Lopez Inc did not rehabilitate the building but the defendant thought of rebuilding it to resume lease. The defendant then occupied building paying P300 monthly. The defendant failed to pay the amount of P2,200 in rentals. The company believed that although it was delinquent with rent, it had a right to be reimbursed of the sum paid for rebuilding the building, with the P2,200 to be charged to the reimbursement. It thought that it need not pay rentals until the value of improvements made was exhausted. Lopez sued to eject company and to collect rentals. ISSUE: W/N Phil & Eastern was a BUILDER in GF. HELD: NO. The rule contained in civil law refers only to a party who occupies or possess property in belief that he is the owner thereof and said good faith end only when he discovers a flaw in his title so as to reasonably inform him that he may not be legal owner of said property. This principle CANNOT apply to a LESSEE because such a lessee knows he is not the owner. He cannot deny ownership of his lessor. Knowing that his occupation of the premises continues only during the life of the lease contract, he must vacate at termination of contract and he introduces improvements on the property at his own risk because he cannot recover from the lessor much less, retain the premises until reimbursement. His right to improvements are expressly governed by Art 1573 and 487 of the Old Civil Code: Art 1573. A lessee shall have, with respect to useful and voluntary improvements, the same rights which are granted to usufructuaries. Art 487. The usufructuary may make on the property held in usufruct any improvements, useful or recreative, which he may deem proper, provided he does not change its form or substance; but he shall have no right to be indemnified therefor. He may, however, remove such improvements should it be possible to do so without injury to property. HELD: NO. LESSOR-LESSE RELATIONSHIP. Anent the alleged promise of the petitioners to sell the lot occupied by the private respondents' house, the same was not substantiated by convincing evidence. Neither the deed of sale over the house nor the contract of lease contained an option in favor of the respondent spouses to purchase the said lot. And even if the petitioners indeed promised to sell, it would not make the private respondents possessors or builders in good faith so as to covered by the provision of Article 448 of the Civil Code. The latter cannot raise the mere expectancy or ownership of the aforementioned lot because the alleged promise to sell was not fulfilled nor its existence even proven. portion of that lot stood the Geminianos unfinished bungalow, which they sold to Nicolas, with an alleged promise to sell to the latter that portion of the lot occupied by the house. Subsequently, the mother executed a contract of lease over a 126 square-meter portion of the lot, including that portion on which the house stood, in favor of Nicolasfor P40.00 per month for a period of seven years. The Nicolas then introduced additional improvements and registered the house in their names. After the expiration of the lease contract in November 1985, however, the mother refused to accept the monthly rentals. It turned out that the lot in question was the subject of a suit, which resulted in its acquisition by Lee. Lee sold the lot to Salcedo, who in turn sold it in 1984 to the spouses Dionisio. On 14 February 1992, the Dionisio spouses executed a Deed of Quitclaim over the said property in favor of Geminiano. As such, the lot was registered in the latter's name. ISSUE: W/N Nicolas was a BUILDER in GF.

Spouses Lacap and Ong Lee

FACTS 2 parcels of land and the improvements were mortgaged thereon to the Bank. The Spouses assumed to pay the mortgage. But they failed to pay and so this was foreclosed. The bank bought the property but allowed the spouses to stay on as lessees. They introduced improvements to the property on the banks assurance that the property would be resold to them. However when the spouses went to the bank to pay the monthly rental, the bank refused for the property had already been sold to someone else. The spouses offered to buy the property but they were refused and told to vacate the same. The spouses filed for the cancellation of the sale and for damages, saying that they were builders in good faith and Art. 448 should govern.

Geminiano vs. Court of Appeals

FACTS: The lot was originally owned by the Geminianos mother. On a 12 sq. m.

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ISSUE W/N Art. 1678 of the NCC instead of Art 448, with regard to indemnity for the improvements introduced by the petitioners on the subject property? Yes HELD Petitioners assert that their right to be indemnified for the improvements they introduced should be based on Art. 448 of the civil code which provides The owner of the land on which anything has been built xxx in good faith, shall have the right to appropriate as his own the works, xxx, after payment of the indemnity provided for in Art. 546 & 548, or to oblige the one who built xxx to pay the price of the land, and the one who sowed, the proper rent. However the builder xxx cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreements the courts shall fix the terms thereof. Art. 546 provides that builders in good faith are entitled to reimbursement for necessary and useful expenses, with right of retention on both cases. The Lacaps insist that they should be treated as builders in good faith as they had stepped into the shoes of Victor Facundo, the former owner. Since then, they occupied the land and introduced improvements thereon. They contend that they were not lessees and paid no rentals thereon. Art. 528 provides that possession on good faith continues to subsist until facts exist which show that the possessor is already aware that he wrongly possesses the thing. Although the petitioners were made to believe that they had claim of title over the property by assign the mortgage and possessing the subject property, all this changed when they started paying monthly rentals to the bank after the foreclosure of said property. A conclusive presumption arises from the fact that, during the tenancy relationship, the petitioner admitted the validity of the title of the landlord, negating their prior claims to title. Their supposed belief in good faith of their right of dominion ended when the bank foreclosed and acquired title over the subject premises. Hence the applicable provision here is Art. 1678 which provides: If the lessees in good faith make useful improvements which are suitable to the use for the lessee to which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee of the value improvements at the time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage hereby. He shall not however, because more impairment on the property leased than is necessary. With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remose the ornamental objects, provided no damage is cause to the principal thing , and the lessor does not choose to retain them, by payin their value at the time the lease is extinguished. The petitioner spouses therefore entitled to be paid only of the value of the useful improvements at the time of the termination of the lease or to have said improvements if the respondent refuses to reimburse them.

As a general rule, Article 448 cannot apply to a co-ownership

Del Campo vs. Fernandez-Abesia

A parcel of land situated at the corner of F. Flores and Cavan Street, Cebu City was co-owned in the proportion of 2/3 and 1/3 share respectively. An action for partition was filed by the plaintiffs and a survey was conducted. It was recommended that the property be divided into two lots: Lot 1161-A (30 sq. meters) for the plaintiffs and Lot 1161-B (15 sq. meters) for the defendants. Also it was found that the house of the defendants occupied 5 sq. meters of Lot 1161-A of the plaintiffs. Lower court ruled that neither the plaintiffs or defendants be obliged to pay for the value of the portion of the defendants house which has encroached 5 sq. meters. It also ruled that the rights of a builder in good faith under Art. 448 of the Civil Code does not apply to a case where one co-owner has built, planted or sown on the land owned in common. ISSUE Whether or not the trial court erred in NOT applying the rights of a builder in good faith under 448 of the civil code to defendants? YES. HELD Art 448 applies in the situation. Art 448 cannot apply WHERE a co-owner builds plants or sows on the land owned in common. The co-owner is not considered as a third person.

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In this case however, co-ownership was terminated by the partition. The house of the defendants were then considered as encroaching/overlapping the area of the land which belongs to the plaintiffs. However, the defendants were held to be in good faith thus provision of Art. 448 should apply. Thus, it was held that the petitioners indemnify defendants for the value of the said portion of the house of defendants if plaintiff decides to appropriate the same. Otherwise, the defendants shall pay the value of the 5 sq. meters of land occupied by their house at such price as may be agreed upon with plaintiffs and if its value exceeds the portion of the house that defendants built thereon, the defendants may chose not to buy the land but defendants must pay a reasonable rental for the use of the portion of the land of plaintiffs as may be agreed upon between parties. In case of disagreement, the rate of rental shall be determined by the trial court. Otherwise, defendants may remove or demolish at their own expense said portion of the house. No. 2. W/N petitioner can be compelled to sell the portion of the lot occupied by private respondents? NO. HELD 1. Before the decision in the partition case was promulgated, Florencio sold 134 square meters of his share to a certain Victa for P5,000.00. When the decision was handed down, the lower court alloted 2/8 of the land to private respondents Juan and Isidro, or a total of 133.5 square meters. It should be noted that prior to partition, all the co-owners hold the property in common dominion but at the same time each is an owner of a share which is abstract and undetermined until partition is effected. As cited in Eusebio vs. 8 Intermediate Appellate Court, "an undivided estate is co-ownership by the heirs." As co-owners, the parties may have unequal shares in the common property, quantitatively speaking. But in a qualitative sense, each co-owner has the same right as any one of the other co-owners. Every co-owner is therefore the owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract, because until division is effected such portion is not concretely determined. Whether or not the provisions of Article 448 should apply to a builder in good faith on a property held in common has been resolved in the affirmative in the case of Spouses del Campo vs. Abesia, wherein the Court ruled that: The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner BPS on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of coownership. In other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which was however made in good faith, then the provisions of Article 448 should apply to determine

Ignao vs. IAC

FACTS Petitioner and his uncles were co-owners of a parcel of land with an area of 534 square meters in Kawit, Cavite, originally owned by Baltazar Ignao who married twice. In his first marriage, he had 4 children(petitioners dad ,Justo, and his siblings) and 4 as well in his second marriage, who waived their rights over the land in favor of Justo. Thus, Justo owned a total of 5/8. Thereafter, Justo acquired the 1/8 share of his brother which he later sold to his son. When Justo died, Florencio inherited the 5/8 share of his father, making his share a total of 6/8 (representing 400.5 square meters). Private respondents, on the other hand, had 1/8 share (66.75 square meters) each of the land or 133.5 square meters. Petitioner filed an action for partition. However, no actual partition was ever effected. Petitioner instituted a complaint for recovery of possession of real property against private respondents he alleged that the area occupied by the two (2) houses of private respondents exceeded their 133.5 square meters.The lower court conducted an ocular inspection finding that there was in fact encroachment of a total of 101 square meters. ISSUES 1. W/N Article 448 of the Civil Code should apply to co-owners of the subject land?

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the respective rights of the parties. 2. Such ruling contravened the explicit provisions of Article 448 to the effect that "(t)he owner of the land . . . shall have the right to appropriate . . .or to oblige the one who built . . . to pay the price of the land . . . ." The law is clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder and the courts. Thus, in Quemuel vs. Olaes, the Court categorically ruled that the right to appropriate the works or improvements or to oblige the builder to pay the price of the land belongs to the landowner. the value of his building, under article 453 (now Article 546). The owner, of the land. upon, the other hand, has the option, under article 361 (now Article 448), either to pay for the building or to sell his land to the owner of the building. But he cannot, as respondents here did, refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same. Additional (Re: Value of the land and the house) The value of the LAND, purchased for P15,000.00 on September 7, 1974, could not have been very much more than that amount during the following January when ERNESTO and wife were asked to vacate. However, ERNESTO and wife have not questioned the P25,000.00 valuation determined by the Court of First Instance. In regards to the valuation of the RESIDENTIAL HOUSE, the only evidence presented was the testimony of ERNESTO that its worth at the time of the trial should be from P30,000.00 to P40,000.00. The Municipal Court chose to assess its value at P20,000.00, or below the minimum testified by ERNESTO, while the Court of First Instance chose the maximum of P40,000.00. In the latter case, it cannot be said that the Court of First Instance had abused its discretion.

Article 488 made applicable under peculiar circumstances

Sarmiento vs. Agana

FACTS A man built a house on a lot, he believed to be owned by his wifes mother. It turned out that the land was owned by the Spouses Santos and was sold to Sarmiento, who asked the builder and his wife to vacate the land but they refused so an ejectment case was filed against them by Sarmiento.The Municipal Court found that the builder had built the house in good faith, and it then ordered him and his wife to vacate the land after Sarmiento has paid them the value of their house.On appeal, the CFI modified the decision of the MTC pursuant to Art. 448 of the NCC. ISSUES 1. 2. HELD 1.

Pecson vs. Court of Appeals

FACTS

WON the spouses are builders in good faith? YES WON Sarmiento may neither pay for the house nor sold his land to the spouses? NO. ERNESTO and wife were builders in good faith in view of the peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by ERNESTO's motherin-law who, having stated they could build on the property, could reasonably be expected to later on give them the LAND. The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid

2.

Petitioner owned a commercial lot located in Kamias Street, Quezon City with a four-door two-storey apartment building. He failed to pay realty taxes amounting to P12,000.00 and so the lot was sold at public auction to Nepomuceno who in turn sold it for P103,000.00.The petitioner challenged the validity of the auction sale saying that it should not have included the building, but the courts dismissed the complaint. It held that the issue concerning it was "not a subject of the . . . litigation." But, that there was no legal basis for the contention that the apartment building was included in the sale. Both parties then appealed the decision to the Court of Appeals. Which affirmed in toto the assailed decision. Private respondents filed a motion for delivery of possession of the lot and the apartment building,

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citing article 546 of the Civil Code, the trial court issued the challenged order "to place private respondent in possession of subject property located at No. 79 Kamias Road, Quezon City, with all the improvements thereon and to eject therefrom all occupants therein, their agents, assignees, heirs and representatives." The petitioner filed with the CA a special civil action for certiorari but the CA affirmed in part the order of the trial court citing Article 448 of the Civil Code. ISSUE WON Article 448 applies to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or donation? NO. HELD By its clear language, Article 448 refers to a land whose ownership is claimed by two or more parties, one of whom has built some works, or sown or planted something. The building, sowing or planting may have been made in good faith or in bad faith. The rule on good faith laid down in Article 526 of the Civil Code shall be applied in determining whether a builder, sower or planter had acted in good faith. Article 448 does not apply to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or donation. The Court said so in Coleongco vs. Regalado: Article 361 of the old Civil Code is not applicable in this case, for Regalado constructed the house on his own land before he sold said land to Coleongco. Article 361 applies only in cases where a person constructs a building on the land of another in good or in bad faith, as the case may be. It does not apply to a case where a person constructs a building on his own land, for then there can be no question as to good or bad faith on the part of the builder. Where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant. Article 448 is not apposite to the case at bar. The provision therein on indemnity may be applied by analogy considering that the primary intent of Article 448 is to avoid a state of forced co-ownership and that the parties, including the two courts below, in the main agree that Articles 448 and 546 of the Civil Code are applicable and indemnity for the improvements may be paid although they differ as to the basis of the indemnity. Article 546 does not specifically state how the value of the useful improvements should be determined. The respondent court and the private respondents espouse the belief that the cost of construction of the apartment building in 1965, and not its current market value, is sufficient reimbursement for necessary and useful improvements made by the petitioner. This position is, however, not in consonance with previous rulings of this Court in similar cases. In Javier vs. Concepcion, Jr., this Court pegged the value of the useful improvements consisting of various fruits, bamboos, a house and camarin made of strong material based on the market value of the said improvements. In Sarmiento vs. Agana, despite the finding that the useful improvement, a residential house, was built in 1967 at a cost of between P8,000.00 to P10,000.00, the landowner was ordered to reimburse the builder P40,000.00, the value of the house at the time of the trial. In the same way, the landowner was required to pay the "present value" of the house, a useful improvement, in the case of De Guzman vs. De la Fuente, cited by the petitioner. The objective of Article 546 of the Civil Code is to administer justice between the parties involved. The said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land, to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him. It is therefore the current market value of the improvements which should be made the basis of reimbursement. A contrary ruling would unjustly enrich the private respondents. The trial court erred in ordering the petitioner to pay monthly rentals equal to the aggregate rentals paid by the lessees of the apartment building. This is so because the right to retain the improvements while the corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which it is built, planted or sown. The petitioner not having been so paid, he was entitled to retain ownership of the building and, necessarily, the income therefrom.

Colengco vs. Regalado

FACTS

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Regalado owned a lot. On this was erected a house. In Sept. 1944 he sold the lot to Coleongco, at the same time the Japanese Army occupied the house. After the American Liberation, the American Forces occupied the house of which Coleongco received rentals. After the American Forces left, Regalado occupied the house so Coleongco filed a case. The CFI ruled that Regalado owned the house. Coleongco filed a complaint to eject Regalado, to have the house removed. He wishes to take possession of the area so that he may construct his own house as he was paying higher rents than what he was receiving. In Sept. 20, 1947-Regalado sold the house to Leonor Montilla who admitted knowledge of Coleongcos case in a separate contract and assumed whatever rights and obligations might arise w/ respect to the case. Said contract also freed Regalado from the result of the case. The complaint of Coleongco was amended accordingly to include Montilla Feb. 11, 1948-Montilla was declared in default in the case. Jan. 3, 1949-Court ruled in favor of Coleongco. CA affirmed decision. Montilla was ordered to pay Coleongco rentals. But the case is returned to the lower court to give Coleongco an opportunity to exercise his right of option under Art. 361 of the Civil Code. ISSUE Whether or not Art. 361 of the Civil Code is applicable in this case? NO HELD Art. 361. The owner of the land on which anything has been built, sown or planted, in good faith, shall be entitled to appropriate the thing so built, sown, or planted, upon paying the compensation mentioned in articles 453 and 456, or the compel the person who has built or planted to pay him the value of the land, and the person who sowed therein. CA OPINION: Because of said articles, the right of the owner of a lot to have the same vacated or cleared from any construction or improvement belonging to another which built it in good faith, is to be subordinated to and w/o prejudice of whatever rights the owner and builder in good faith of the improvement may have. Therefore, the defendants cannot be ejected because they have a right to pay for the acquisition of lot No. 157 or be paid the value of the house by Coleongco SC OPINION: Art. 361 apply only in cases where a person constructs a building on the land of another in good or bad faith, as the case may be. It doesnt apply to a case where a person constructs a building on his own land, for there can be no question as to good or bad faith on the part of the builder. In this case, Regalado constructed the house on his own land (based on the decision of the CFI) before he sold said land to Coleongco. Hence, Art. 361 is inapplicable. SC RULING: Regalado and Montilla should remove the house from Coleongcos property. Coleongco has no obligation to pay them. All other aspects of the CA decision are affirmed.

Article 448 can be invoked by successor-in-interest of the builder in good faith

Technogas Philippines Manufacturing Corp vs. Court of Appeals

Facts: Technogas. is the registered owner of a parcel of land situated in Paraaque. It was purchased from Pariz Industries, Inc. in 1970 together with all the buildings and improvements including the wall existing thereon. Eduardo Uy is the registered owner of a parcel of which adjoins Technogas land In 1971, Uy purchased another lot also adjoining Technogas land from a certain Miguel Rodriguez. The portions of the buildings and wall bought by Technogas together with the land from Pariz Industries are occupying a portion of Uys adjoining land. Upon learning of the encroachment or occupation by its buildings and wall of a portion of Uys land, Technogas offered to buy from Uy that particular portion of the latters land occupied by portions of its buildings and wall with an area of 770 square meters, more or less, but Uy refused the offer. The parties subsequently entered into a private agreement before a certain Col. Rosales in Malacaang, wherein Technogas agreed to demolish the wall at the back portion of its land thus giving to Uy possession of a portion of his land previously enclosed by Technogas wall. Uy filed a complaint against Technogas in connection with the encroachment or occupation by Technogas buildings and walls of a portion of its land but said complaint did not prosper; While trial of the case was in progress, Technogas filed in Court a formal proposal for settlement of the case but said proposal, however, was ignored by Uy. After trial on the merits, the Regional Trial rendered a decision in favor of plaintiff. It ordered Uy to sell to Technogas that portion of land owned by him and occupied by portions of plaintiff's buildings and wall. Issue: W/N Technogas is a possessor in good faith? Held: Yes

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There is no question that when petitioner purchased the land from Pariz Industries, the buildings and other structures were already in existence. It is presumed that possession continues to be enjoyed in the same character in which it was acquired, until the contrary is proved. Good faith consists in the belief of the builder that the land he is building on is his, and his ignorance of any defect or flaw in his title. Hence, such good faith, by law, passed on to Pariz's successor, petitioner in this case. Further, "(w)here one derives title to property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence against the former." And possession acquired in good faith does not lose this character except in case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully. NOTE: Read the dispositive portion of Technogas
WHEREFORE, premises considered, the petition is hereby GRANTED and the assailed Decision and the Amended Decision are REVERSED and SET ASIDE. In accordance with the case of Depra vs. Dumlao, this case is REMANDED to the Regional Trial Court of Pasay City, Branch 117, for further proceedings consistent with Articles 448 and 546 of the Civil Code, as follows: 1. The trial court shall determine: (a) the present fair price of private respondent's 520 square-meter area of land; (b) the increase in value ("plus value") which the said area of 520 square meters may have acquired by reason of the existence of the portion of the building on the area; (c) the fair market value of the encroaching portion of the building; and (d) whether the value of said area of land is considerably more than the fair market value of the portion of the building thereon. 2. After said amounts shall have been determined by competent evidence, the regional trial court shall render judgment as follows: (a) The private respondent shall be granted a period of fifteen (15) days within which to exercise his option under the law (Article 448, Civil Code), whether to appropriate the portion of the building as his own by paying to petitioner its fair market value, or to oblige petitioner to pay the price of said area. The amounts to be respectively paid by petitioner and private respondent, in accordance with the option thus exercised by written notice of the other party and to the court, shall be paid by the obligor within fifteen (15) days from such notice of the option by tendering the amount to the trial court in favor of the party entitled to receive it; If private respondent exercises the option to oblige petitioner to pay the price of the land but the latter rejects such purchase because, as found by the trial court, the value of the land is considerably more than that of the portion of the building, petitioner shall give written notice of such rejection to private respondent and to the trial court within fifteen (15) days from notice of private respondent's option to sell the land. In that event, the parties shall be given a period of fifteen (15) days from such notice of rejection within which to agree upon the terms of the lease, and give the trial court formal written notice of the agreement and its provisos. If no agreement is reached by the parties, the trial court, within fifteen (15) days from and after the termination of the said period fixed for negotiation, shall then fix the terms of the lease provided that the monthly rental to be fixed by the Court shall not be less than two thousand pesos (P2,000.00) per month, payable within the first five (5) days of each calendar month. The period for the forced lease shall not be more than two (2) years, counted from the finality of the judgment, considering the long period of time since 1970 that petitioner has occupied the subject area. The rental thus fixed shall be increased by ten percent (10%) for the second year of the forced lease. Petitioner shall not make any further constructions or improvements on the building. Upon expiration of the two-year period, or upon default by petitioner in the payment of rentals for two (2) consecutive months, private respondent shall be entitled to terminate the forced lease, to recover his land, and to have the portion of the building removed by petitioner or at latter's expense. The rentals herein provided shall be tendered by petitioner to the trial court for payment to private respondent, and such tender shall constitute evidence of whether or not compliance was made within the period fixed by the said court. In any event, petitioner shall pay private respondent an amount computed at two thousand pesos (P2,000.00) per month as reasonable compensation for the occupancy of private respondent's land for the period counted from October 4, 1979, up to the date private respondent serves notice of its option to appropriate the encroaching structures, otherwise up to the actual transfer of ownership to petitioner or, in case a forced lease has to be imposed, up to the commencement date of the forced lease referred to in the preceding paragraph; The periods to be fixed by the trial court in its decision shall be non-extendible, and upon failure of the party obliged to tender to the trial court the amount due to the obligee, the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as may be required by the prestation due the obligee.

(c)

(d)

LEGAL EFFECTS Legal effects where both parties are in good faith

(b)

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Depra vs. Dumlao
Facts: Francisco Depra is the owner of a parcel of land in Dumangas, Iloilo. Agustin Dumlao owns a lot adjoining Depras land. Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof encroached an area of Depras property. Depras mother demanded that Dumlao move back from his encroachment. An action for lawful detainer was filed by Depra. Municipal Court found that Dumlao is a builder in good faith and applying Art. 448, ordered a forced lease be created between the parties. Neither party appealed. Depra refused to accept payment of rentals from Dumlao. In 1974, Depra filed a Complaint for Quieting of Title against Dumlao before the Court of First Instance. Issue: What is the proper legal effect of Art. 448 given that both DUMLAO and DEPRA are in good faith? Held: Owner of land on which improvement was built by another in good faith is entitled to removal of improvement only after landowner has opted to sell the land and the builder reused to pay for the same. Where the lands value is considerably more than the improvement, the landowner cannot compel the builder to buy the land. In such event, a forced lease is created and the court shall fix the terms thereof in case the parties disagree thereon. Note: Read the full text of the dispositive portion of Depra vs. Dumlao:
WHEREFORE, the judgment of the trial Court is hereby set aside, and this case is hereby ordered remanded to the Regional Trial Court of Iloilo for further proceedings consistent with Articles 448 and 546 of the Civil Code, as follows: 1. The trial Court shall determine (a) the present fair price of DEPRA's 34 square meter area of land; (b) the amount of the expenses spent by DUMLAO for the building of the kitchen; (c) the increase in value ("plus value") which the said area of 34 square meters may have acquired by reason thereof, and (d) whether the value of said area of land is considerably more than that of the kitchen built thereon. 2. After said amounts shall have been determined by competent evidence, the Regional, Trial Court shall render judgment, as follows: (a) The trial Court shall grant DEPRA a period of fifteen (15) days within which to (c) exercise his option under the law (Article 448, Civil Code), whether to appropriate the kitchen as his own by paying to DUMLAO either the amount of tile expenses spent by DUMLAO f or the building of the kitchen, or the increase in value ("plus value") which the said area of 34 square meters may have acquired by reason thereof, or to oblige DUMLAO to pay the price of said area. The amounts to be respectively paid by DUMLAO and DEPRA, in accordance with the option thus exercised by written notice of the other party and to the Court, shall be paid by the obligor within fifteen (15) days from such notice of the option by tendering the amount to the Court in favor of the party entitled to receive it; The trial Court shall further order that if DEPRA exercises the option to oblige DUMLAO to pay the price of the land but the latter rejects such purchase because, as found by the trial Court, the value of the land is considerably more than that of the kitchen, DUMLAO shall give written notice of such rejection to DEPRA and to the Court within fifteen (15) days from notice of DEPRA's option to sell the land. In that event, the parties shall be given a period of fifteen (15) days from such notice of rejection within which to agree upon the terms of the lease, and give the Court formal written notice of such agreement and its provisos. If no agreement is reached by the parties, the trial Court, within fifteen (15) days from and after the termination of the said period fixed for negotiation, shall then fix the terms of the lease, provided that the monthly rental to be fixed by the Court shall not be less than Ten Pesos (P10.00) per month, payable within the first five (5) days of each calendar month. The period for the forced lease shall not be more than two (2) years, counted from the finality of the judgment, considering the long period of time since 1952 that DUMLAO has occupied the subject area. The rental thus fixed shall be increased by ten percent (10%) for the second year of the forced lease. DUMLAO shall not make any further constructions or improvements on the kitchen. Upon expiration of the two-year period, or upon default by DUMLAO in the payment of rentals for two (2) consecutive months, DEPRA shall be entitled to terminate the forced lease, to recover his land, and to have the kitchen removed by DUMLAO or at the latter's expense. The rentals herein provided shall be tendered by DUMLAO to the Court for payment to DEPRA, and such tender shall constitute evidence of whether or not compliance was made within the period fixed by the Court. In any event, DUMLAO shall pay DEPRA an amount computed at Ten Pesos (P10.00) per month as reasonable compensation for the occupancy of DEPRA's land for the period counted from 1952, the year DUMLAO occupied the subject area, up to the commencement date of the forced lease referred to in the preceding paragraph; The periods to be fixed by the trial Court in its Precision shall be inextendible, and upon failure of the party obliged to tender to the trial Court the amount due to the obligee, the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as may be required by the prestation due the obligee.

(b)

(d)

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Option is given to the landowner
Quemuel spouses (Quemuels). The trial court ordered the Quemuels to return the lot to the Olaeses. No appeal was had so the decision became final. The Olaeses sought the execution of the decision. To forestall ejectment, the Quemuels filed this present complaint. The Quemuels seek to reduce the monthly rentals of P20 to P5.60 and compel the Olaeses to sell to them the portion of the contested lot where their house is erected. The trial court dismissed the complaint. The appeal was had in the CA and the case was referred to the SC. In their petition to the SC, the Quemuels ask that a writ of prohibition and injunction be issued to the Provincial Sheriff and enjoin the Olaeses from demolishing their house. They claim that they are builders in good faith. The Quemuels hold that the portion of the lot where their house stood belonged to them. Furthermore, they assert that one-half of the contested lot belongs to them because Mrs. Quemuel (Ruperta SolisQuemuel) inherited this from her father, who in turn acquired said portion trough a verbal extrajudicial partition. Issue: Whether or not Art 448 in connection with Art 546 of the NCC is applicable? NO Held: The Quemuels are not builders in good faith. It is indisputable from the evidences that the land in question originally belonged to the government as part of the Friar Lands Estate. It was validly purchased by Agapita Solis from whom the Olaeses purchased it. The Olaeses have maintained that they owned the lot and that they have a valid title to it. The relation of both parties as to the lot was that of a tenantlandlord and that their rights are governed by Art 1573 in relation to Art 487 of the old Civil Code. From said provisions, it is inferred that the Quemuels cannot compel the Olaeses to pay for the improvements (their house on the a part of the land) the former made on the property or to sell the latters land. The Quemuelss only right is to remove the improvements, if it is possible to do so, without damage to the land. Note that Art 448 of the NCC is intended to apply only to a case where one builds or sows or plants on land in which he believes himself to have a claim of title and not to lands wherein ones interest is that of a tenant, under a rental contract, as in this case.

Ballatan vs. Court of Appeals

Facts: Ballatan constructed her house on Lot No. 24. During the construction, she noticed that the concrete fence and side pathway of the adjoining house of respondent Winston Go encroached on the entire length of the eastern side of her property. Her building contractor formed her that the area of her lot was actually less than that described in the title. Ballatan informed respondent Go of this discrepancy and his encroachment on her property.Go, however, claimed that his house, including its fence and pathway, were built within the parameters of his father's lot; and that this lot was surveyed by Engineer Jose Quedding, the authorized surveyor of the Araneta Institute of Agriculture. Ballatan made a written demand on respondents Go to remove and dismantle their improvements on Lot No. 24. Respondents Go refused. The parties including Li Ching Yao, however, met several times to reach an agreement one matter. Issue: W/N Go is a builder in good faith? Yes Held: Go had no knowledge that they encroached petitioners' lot. They are deemed builders in good faith until the time petitioner Ballatan informed them of their encroachment on her property. Respondent Li Ching Yao built his house on his lot before any of the other parties did. He constructed his house in 1982, respondents Go in 1983, and petitioners in 1985. There is no evidence, much less, any allegation that respondent Li Ching Yao was aware that when he built his house he knew that a portion thereof encroached on respondents Go's adjoining land. Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. All the parties are presumed to have acted in good faith. Art 448 shall apply.

Depra vs. Dumlao, SUPRA Quemuel vs. Olaes

Facts: The Olaes spouses (Olaeses) sought to recover the possession of their lot from the The Article (referring to Article 361, now Article 448 of the New Civil Code) favors the owner of the land by giving him one of the two options mention in the article. Some commentators have questioned this preference in favor of the owner of the land, but Manresas opinion is that the Article is just and fair.

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San Diego vs. Montesa
Facts: On a land owned by plaintiffs Jose, Maria and Urbano de la Cruz, the San Diegos built a house in good faith. The San Diegos bought it for 1000 from Anastacio, mother of plaintiffs. The trial court voided the sale on ground that the vendor had no right to the land but upheld that defendants were builders in good faith stating that the Deed of Sale was null and void and the CA affirmed the decision. The defendants who were in possession of the land moved to execute the order of the trial court that they vacate but plaintiff will have to pay 3500. This motion was denied hence this mandamus case. Petitioners argue that the decision stating that they have to vacate land and then respondent will pay 3500 within 30 days should be viewed that respondents pay first before they vacate. Issue W/N de la Cruz should pay 3500? YES W/N the respondents should pay rent? NO Held: The judgment ordains the payment by de la Cruz P3,500.00 "within 30 days after this decision becomes final" to San Diego. The order to vacate only upon the payment recognizes the right of retention granted to possessor in good faith by Article 546. This provision is expressly made applicable to builders in good faith (Article 448). The right of retention granted is merely a security for the enforcement of the possessor's right to indemnity for the improvement made by him. As a result, the possessor in good faith, in retaining the land and its improvements pending reimbursement, is not bound pay any rental during the period of retention; otherwise the value of his security would be impaired. Normally, the landowner has the option to either appropriate the improvement or to sell the land to the possessor. This option is no longer open to the respondent landowners because the decision in the former suit limits them to requiring the San Diegos to vacate the land upon payment of P3,500.00. The suit of de la Cruz to recover the property was an exercise of the right to choose to appropriate the improvements and pay the indemnity fixed by law. The respondents acquiesced in this view, since they did not ask for a modification of the judgment, and allowed it to become final. Consequently, they can no longer insist on selecting another alternative; nor can they be heard now to urge that the value of the indemnity, set at P3,500.00, is exorbitant for the same reason.

Landowner, however, cannot refuse to exercise either option

Technogas Philippines Manufacturing Corp vs. CA, SUPRA

The private respondents insistence on the removal of the encroaching structures as the proper remedy is thus legally flawed. This is not one of the remedies bestowed upon him by law. It would be available only if and when he chooses to compel the petitioner to buy the land at a reasonable price but the latter fails to pay such price. This has not taken place. His options are limited to: (1) appropriating the encroaching portion of the petitioners building after payment of proper indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He cannot exercise a remedy of his own liking.

Sarmiento vs. Agana, SUPRA

But he cannot, as respondents here did, refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected

OPTION TO APPROPRIATE What indemnity consist of Ballatan vs. CA, SUPRA

The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 (Useful expenses) and 548 (expenses for pure luxury)

Basis of indemnity

Javier vs. Concepcion Jr.

Facts: October 1959 Lim Chua, Tan Tian On and Tan Shiok Tuan (RESPONDENTS) filed against the spouses Javier (PETITIONERS) for reconveyance of Lot 12 (over 50hectares), with the improvements thereon, and an accounting and recovery of the produce of the land from the time the PETITIONERS took possession of the land

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in 1945 up to the time it is returned to the RESPONDENTS. Lot 12, is allegedly a part of a bigger parcel known as Lot 6 found in Quezon province with a TCT registered in the name of the RESPONDENTS. Found in Barrio Ayusan, Municipality of Dolores bounded in the NE by a creek and properties of Gaurano etc., in the S by the property of Ella, in the SW by properties of Natividad etc., and in the NW by the Cabatang river and properties of Gaurano etc. and a creek. The area is more or less 1,849,172 sq.m. It was alleged on April 10, 1930 in Expediente 1509 and 1679 that said lot 12 was ordered excluded as it was already awarded to RESPONDENTS as owners in Expediente 356. PETITIONERS denied the material averments of the complaint and pointed out that Lot 12 could never be a part of Lot 6 as there was a big river (GUHIT RIVER) over 50m wide 20m deep between the two serving as a natural boundary between the Municipalities of Dolores and Candelaria, Quezon Province. Lot 6 is found in Dolores while Lot 12 is in Candelaria. Issue: W/N the respondents must pay the improvements introduced by them on lot12 from 1945? Yes, art. 546 and 544 apply. They were possesors in good faith. Hence, this present appeal to SC. Is DLF a possessor in good faith and if he is, what are his rights? Held: The land belongs to DG and his children. However, DLFs possession is in good faith and continues to be such notwithstanding the extrajudicial notice given to DLF. It continues until a final judgment to the contrary is rendered. Award of damages to either party is not justified. Accordingly, land belongs to DG. DG are entitled to acquire DLFs house by paying the value thereof or DG can compel DLF to pay the price of the land agreed upon by the parties; in default thereof, the price fixed by competent court. Should DG choose to acquire the house, DLF has the right to retain the building until he is indemnified.

Pecson vs. Court of Appeals, SUPRA

One of the basis of the indemnity to be paid to the builder if the landowner chooses to appropriate is Article 546 on necessary and useful expenses. The objective of rticle 546 of the Civil Code is to administer justice between the parties involved.

Held: The SC found that the PETITIONERS did not act with evident bad faith in occupying lot12. As possessors in good faith they are entitled to the fruits received before their possession was legally interrupted upon receipt of the judicial summons. They should also be refunded for the necessary and useful expenses, with the right to retain the land until they are reimbursed pursuant to Art. 546 of the CC: RESPONDENTS have the option to refund the amount of useful expenses or to pay the increase in value which the land may have acquired by reason thereof. PETITIONERS have set the market value of the improvements at 150k (undisputed). In view of Art. 544, PETITIONERS shall be accountable for the fruits of the lot ONLY AFTER 1959, not from 1945.

Pending reimbursement, builder has right or retention

Filipinas Colleges, Inc. vs. Garcia Timbang

This started from three motions filed in the lower court for the execution of a final judgment rendered by CA in which Filipinas College(FC), Blas and spouses Timbang were the parties. Based on the CA judgment, FC acquired the rights of the spouses Timbang in Lot No.2 and in consideration thereof, they need to pay the spouses the sum of money which the spouses had to pay to the original vendor of the lot. Also, it was declared that Blas was a builder in good faith of the school building located in Lot No. 2 and entitled to be paid the value of such building. FC, purchaser of said building, was order to pay whatever balance in the purchase price of said building. Since FC failed to deposit the value of the land (belonging to Timbangs), it lose its rights to the land. By virtue of this, Timbangs exercise its option as owner of the land and chose not to appropriate the building but to compel FC to pay for the value of the land. So, Timbangs asked for writ of execution against FC and it was granted. Blas, on the other hand, asked for execution of her judgment credit, representing the balance of the purchase price of the school building, against FC. It was granted. Even before the writ was issued, Blas advised the sheriff of her preferential lien on the house to satisfy her judgment credit and to withhold from the proceeds of the

De Guzman v. Dela Fuente

Facts: De Guzman (DG) and De la Fuente(DLF) were comrades, the former receiving favors from the latter. They agreed that DLF can occupy the lot of DG. DLF built his house and repaired it years later. DG filed suit to compel DLF to vacate the premises. DG contends that DLF occupies the land by mere tolerance and as such, he should pay rent. DLF claims that the land is his. The lower court rendered decision in favor of DG. DLF was ordered to vacate and restore the premises to DG.

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auction sale of the building the amount of the balance of the purchase price. Thereafter, the school building along with personal properties of FC was sold at public auction in favor of spouses Timbangs. Blas asked the court to compel the Timbangs to deliver a portion of the proceeds of the auction sale corresponding to the balance of the purchase price of the building. She also asked that the land of FC be sold at public auction since there are still unsatisfied debts in favor of the Timbangs and Blas. FC on the other hand wanted to be declared part owner of the land since the proceeds were applied by Timbangs to the payment of the land purchased by FC. Timbangs opposed these motions. CFI ordered Sheriffs cert of sale covering a school building sold at public action null and void unless within 15 days, defendant-appellants spouses Timbangs pay to appellee Blas the amount of their winning bid; declaring the other appellee, FC, owner of undivided interest in Lot No. 2 on which the building sold in auction is situated; ordering the sale of FCs undivided interest in said lot at a public auction to satisfy the balance of the judgment credit in favor of Blas. Timbangs alone appealed. Timbangs contend that since FC, as builder in good faith, has failed to pay the price of the land after owners exercise their option, FC lost its rights of retention and Timbangs automatically became owners of the building. Since they were owners of the building, execution sale of such was superfluous. Hence, they are not bound to pay to Blas her judgment credit against FC for the purchase price of the building. Blas cannot claim preference over the proceeds since the Timbangs, owners of the house, are not debtors of Blas. HELD: Timbangs contentions are WRONG. There is nothing in the language of Articles 448 and 546 which justifies Timbangs contention that upon failure of builder to pay the owner of the land, the ownership of the improvement is automatically transferred to the owner of the land. The proper remedy if the builder fails to pay the value of the land is to leave things as they are and assume a relation of lessor and lessee and should they disagree to the amount of rental then the court must fix it. Another remedy given to the owner is the removal of the improvement on the land. Moreover, the owner may also sell the land and improvements therein in a public auction applying the proceeds thereof first to the payment of the value of the land and the excess, if any, to be delivered to the owner of the house in payment thereof. Tio, owner of Cebu lot which is mortgaged to a loan company, executed a power of attorney in favor of Fadullon. This was registered and annotated on the certificate of title of the land. Fadullon sold to the Segarras the land with a very short redemption period. Lucio Tio sought to annul the sale. TC annulled sale however during the time the Segerras possessed the lot, they introduced improvements. They claimed they were builders in good faith. HELD: There are two circumstances which belie the professed good faith on the part of the Segarras: the power of attorney annotated on the title and the short period of redemption. Also, the land is mortgaged. The Segarras did not require Fadullon to produce his power of attorney. While it is true that said power of attorney is annotated at the back of the Torrens title of Tio, it was still incumbent upon the Segarras to ascertain the scope and authority of Fadullon under said power of attorney. Fadullon executed the sale with the right to repurchase within the extraordinary short period of 30 days. This circumstance, again, should have placed the Segarras on their guards, knowing, as they did, that they were dealing with an agent. The sale to the Segarras was null and void and of no effect. They are in bad faith and they cannot enjoy the benefit of a builder in good faith

Pecson vs. CA, SUPRA

Article 488 does not apply to a case where the owner of the land is the builder, sower, planter who then later loses ownership of the land by sale or donation. Thus, he has no right of retention.

Chua vs. Court of Appeals

A lease contract expired between petitioner and lessor. Prior to the expiration of the lease, the parties discussed the possibility of renewing it but did not agree on anything. Lessor filed a complaint for unlawful detainer against petitioners. MTC gave a 2yr extension to contract. RTC ruled the lease was for a fix period and the court cannot fix a period. WON a right of retention is granted to a lessee on the ground that repairs and improvements are made on the premises? HELD: The petitioners are guilty of bad faith in refusing to leave the premises. They will not benefit from the rights accorded a possessor in good faith. Art. 1678 merely grants to such a lessee making in good faith useful improvements the right to be reimbursed one-half of the value of the improvements upon the termination of the lease, or, in the alternative, to remove the improvements if the lessor refuses to make reimbursement.

Miranda vs. Fadullon

Time of transfer of ownership

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sale, and that from the balance, if any, should be given to Bataclan.

Bataclan vs CFI Cavite

FACTS Dec. 2, 1933-In a case filed by Vicente Sto. Domingo Bernardo against Catalino Bataclan, CFI declared Bernardo owner of a 90 hectare-land. As such, Bernardo had nd the options available under Art. 361 (Now Art. 448). If the 2 option is chosen, payment must be made w/n the period agreed upon by the parties or that w/c is fixed by the court. The CFI also declared that the value of the land was P300 per hectare and that the value of the improvements introduced by Bataclan was P1, 642. Upon appeal, the SC decreased the value of the land to P200 per hectare and increased the value of the improvements to P2, 212. All other aspects of the decision of the CFI were affirmed. Bernardo elected to compel Catalino Bataclan to pay him the value of the land (P18K). Jan. 12, 1934-Bataclan alleges that he filed a motion praying that he be granted 15 years w/n w/c to pay said P18K. This was never granted nor denied. Jan. 24, 1934-CFIs Judge Leopoldo Rovira issued an order directing that the land be sold at a public auction. The proceeds thereof will be paid to Bernardo in addition to the legal expenses of the sale, and that the remainder (P2,212) be paid to Bataclan From said order, Bernardo informed the CFI that he elected to compel Bataclan to pay him the value of the land, and that Bataclan appeared in court stating that he didnt have any money. The CFI then granted Bernardo 30 days in w/c to pay Bataclan the P2, 212 and ordered that if said payment wasnt made, the land should be sold at a public auction for the payment of said sum to Bataclan, the balance after deducting the expenses of the sale to be delivered to Bernardo. March. 16, 1934-Judge Rovira modified his order of Jan. 24 and ordered that Bernardo should be paid for the land at the rate of P200 per hectare from the proceeds of the sale. The balance, if any, should be delivered to Bataclan. April 24, 1934-Judge Sixto De La Costa issued an order for the sale of the land at a public auction in order that Bernardo be paid P18K and the legal expenses of the

Bataclan filed this petition for the issuance of a writ of certiorari to annul the April 24 order of the CFI. ISSUE 1. Whether or not the CFI exceeded its jurisdiction when it issued the April 24 order? NO HELD 1. It is true that in the Dec. 2 CFI decision, it was provided that in case Bernardo elected to compel Bataclan to pay him the value of the land, payment must be made w/n a period fixed either by the parties or the court. But because of these circumstances, it would be futile for the court to grant Bataclan a period of 30 or 60 days in w/c to pay Bernardo the P18K: Bataclan asked for a period of 15 years in w/c to make said payment. He also appeared in court and informed it that he had no money. If there was any irregularity in the courts ordering the sale o f the property at a public auction under the conditions stated in the orders of March 16 and April 24, it was not prejudicial but favorable to Bataclan, because his only right was to purchase the land at P18K. Furthermore, Bataclan could have appealed said order, and his right to appeal was an adequate remedy.

OPTION TO SELL THE LAND Remedy of landowner if builder or planter refuses to pay the price of the land Filipinas College Inc., vs. Garcia Timbang, SUPRA
If the builder or planter refuses to pay the price of the land, the landowner has the following remedies as enunciated in this case: 1. To have the improvement removed 2. Sale of the land and improvement in a public auction applying the proceeds thereof first to the payment of the value of the land and the excess, if any, to be delivered to the owner of the house in payment thereof.

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3. Allow them to rent the land improvements from him. Bernardo manifested to the lower court his desire to require Bataclan to pay him the value of the land. Bataclan informed the lower court that he was unable to pay the land, hence, an order was issued giving Bernardo 30 days within which to pay Bataclan the sum of P2,212 stating that, in the event of failure to make such payment, the land would be ordered sold at public auction. The court ordered the sale of the land in question at public auction. The land was sold on April 5, 1935 to Toribio Teodoro, the highest bidder, for P8,000. In the certificate of sale issued to said purchaser on the very day of sale, it was stated that the period of redemption of the land sold was to expire on April 5, 1936. Upon petition of Toribio Teodoro the court below ordered the provincial sheriff to issue another certificate not qualified by any equity of redemption. This was complied with by the sheriff on July 30, 1935. On September 18, 1935, Teodoro moved that he be placed in possession of the land purchased by him. Issue: W/N the Bataclan has the right of retention. Held: No. The defendant has lost his right of retention. In obedience to the decision of this court in G.R. No. 37319, Bernardo expressed his desire to require Bataclan to pay for the value of the land. Bataclan could have become owner of both land and improvements and continued in possession thereof. But he said he could not pay and the land was sold at public auction to Toribio Teodoro. The law, as we have already said, requires no more than that the owner of the land should choose between indemnifying the owner of the improvements or requiring the latter to pay for the land. When he failed to pay for the land, Bataclan herein lost his right of retention.

Miranda vs. Fadullon, SUPRA

If the builder is unwilling or unable to buy the land, they can assume the relation of lessor and lessee and agree to the terms of a lease amd should they disagree as to the amount of the rental, they may proceed to court.

Ignacio v. Hilario
FACTS: CFI declared Hilario was the owner of the whole property and Ignacio was the owner of houses and granaries built on said property. From the judgment, Ignacio was entitled to hold possession of the lot until paid. Hilario, the landowner, prayed for an order of execution alleging that since they chose neither to pay defendants for the buildings nor to sell to them the residential lot, Ignacio should be ordered to remove the structure at their own expense and to restore Hilario in the possession of said lot. The judge granted Hilarios motion. HELD: The owner of the building erected in good faith on a land owned by another is entitled to retain the possession of the land until he is paid the value of his building. The owner of the land, upon the other hand, has the option to either pay for the building or to sell his land to the owner of the building. But he cannot, as Hilario did here, refuse both. He is entitled to remotion only when, after having chosen to sell his land, the other party fails to pay for the same. This is not the case before the Court. Note: In the decision of the Judge, the rights of both parties were well-defined but it fails to determine the value of the buildings and of the lot where they are erected as well as the periods of time within which the option may be exercised and payment should be made. This procedure is erroneous.

Basis in determining price of the land

Bernardo vs. Bataclan

Facts: Pastor Samonte and others sold a lot and to secure possession of the land from the vendors the said Bernardo instituted a case in the CFI. When Bernardo entered upon the premises, however, he found Bataclan who appears to have been authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. Bernardo was declared owner but the Bataclan was held to be a possessor in good faith for work done and improvements made. Bernardo was given by this court 30 days from the date when the decision became final within which to exercise his option, either to sell the land to the Bataclan or to buy the

Ballatan vs. CA, SUPRA

In the event that Ballatan elects to sell to respondents Go the subject porition of their lot, the price must be fixed at the prevailing market value at the time of payment.

Rule if only a portion of the land has been encroached by the builder in good faith

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Ballatan vs. CA, SUPRA
Petitioners may choose to purchase the improvement made by respondents Go on their land or sell to respondents Go the subject portion. If buying the improvement is impractical as it may render Gos house useless, then petitioners may sell to respondents Go that portion of the lot on which their improvement stands. If the Gos are unwilling or unable to buy the lot, then they must avacate the land and until they vacate, they must pay the rent to petitioners. Petitioners, however, cannot compel respondents Go to buy the land if its value is considerably more than the portion of their house constructed thereon. If the value of the land is much more than the Gos improvement, then respondents Go must pay reasonable rent. If they do not agree on the terms of the lease, then they may go to court to fix the same. faith shall have the right to appropriate as his own faith shall have the right to appropriate as his own the building, after payment to the builder of necessary and useful expenses, and in the proper case, expenses for pure luxury or mere pleasure, or to oblige the builder to pay the price of the land. Respondents, as owners of the land, have therefore the choice of either appropriating the portion of petitioners' house which is on their land upon payment of the proper indemnity to petitioners, or selling to petitioners that part of their land on which stands the improvement. It may here be pointed out that it would be impractical for respondents to choose to exercise the first alternative, i.e., buy that portion of the house standing on their land, for in that event the whole building might be rendered useless. The more workable solution, it would seem, is for respondents to sell to petitioners that part of their land on which was constructed a portion of the latter's house. If petitioners are unwilling or unable to buy, then they must vacate the land and must pay rentals until they do so. Of course, respondents cannot oblige petitioners to buy the land if its value is considerably more than that of the aforementioned portion of the house. If such be the case, then petitioners must pay reasonable rent. The parties must come to an agreement as to the conditions of the lease, and should they fail to do so, then the court shall fix the same. (Article 361, old Civil Code; Article 448 of the new). Note: Even if it proposed a workable solution, the Court here directed respondent to exercise within 30 days his option to either buy the portion of the petitioners' house on their land or sell to said petitioners the portion of their land

Technogas Philippines Manufacturing Corp. vs. CA, SUPRA

See case above and dispositive portion

Depra vs. Dumlao, SUPRA

See case above and dispositive portion

Grana vs. Court of Appeals

FACTS: Petitioners Grana (G) and Torralba (T) were sued by respondents Bongato (B) and Sanchez (S) in the lower court for the recovery of 87 sqm. of land. The CFI and the CA granted the petition of the respondents hence this appeal. B inherited the land from her parents who bought it from the original owners. B had the land resurveyed due to conflicts and overlapping boundaries. The land in issue is said to have belonged to the predecessor in interest of the petitioners G and T. In the OCT nd the land was said to be 295 sqm. while in the sketch plan of the 2 cadastral survey it was only 230 sqm. The lower court held that the land belongs to B and S. G and T went to Supreme Court. ISSUE: W/N Petitioners are builders in good faith? Yes HELD: Although without any legal and valid claim over the land in question, petitioners, however, were found by the Court of Appeals to have constructed a portion of their house thereon in good faith. Under Article 361 of the old Civil Code (Article 448 of the new), the owner of the land on which anything has been built in good

IF THE LANDOWNER ACTED IN GOOD FAITH AND THE BUILDER, PLANTER, OR SOWER (WHO IS AT THE SAME TIME THE OWNER OF THE MATERIALS) ACTED IN BAD FAITH. THE CONCEPT OF BAD FAITH o When bad faith exists Pleasantville Development Corp vs. CA, SUPRA
Good faith consists in the belief of the builder that the land he is building on is his [ and his ignorance of any defect or flaw in his title. And as good faith is presumed, petitioner has the burden of proving bad faith on the part of Kee.

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Baltazar vs. Claridad, SUPRA
Good faith must rest on a colorable right in the builder, beyond a mere stubborn belief in ones title despite judicial adjudication. Lagarto, of a bigger area which the lot is part. An order of demolition was issued. Sta. Ana filed a certiorari before the SC. The case was remanded to the lower court to determine whether Sta. Ana was privy to the spouses Dasal as the losing parties in the civil case. The court found held that there was privity between Sta. Ana and the spouses Dasal. The court ordered Sta. Ana to remove the improvements to which he failed to comply. The Court ordered the demolition. The demolition was effected. Sta. Ana appealed as the demolition deprived him of the alternative choice of paying the value of the disputed area. CA granted his appeal ordered to determine the value of the demolished portion and the value of the disputed area for the purposes of set off. HELD: As found by the lower court, there is privity between Sta. Ana and the spouses Dasal. He was in the company of Dasal who was also the brother-in-law of Lagarto and was present when the commissioner in the civil case inspected the land in question supporting the claim that Sta. Ana knew that the land was already in dispute between Dasal and Sabido. If Sta. Ana really belived that he owns the lot, he should have raised his claim of ownership when the commissioner inspected the land. Hence, Sta. Ana is bound by the decision in the civil case. Being adjudged in privy with the Spouses Dasal, he cannot avail of the rights granted to a builder in good faith. He must remove all his improvements at his own expense and if the same have already been removed, he cannot be entitled to the right of retention or to any reimbursement.

LEGAL CONSEQUENCES o Right of Remotion

Santos vs. Mojica

Allanigue brothers and sisters brought an action before the CFI against their sister Lorenza and her husband, Simeon Santos for partition of lot. The latter were declared in default and partition granted. In a subsequent order, the court set off Lorenzas share against the amount that she had failed to pay as rents. Defendants were ordered to vacate the lot and deliver its possession to plaintiffs. Leonardo Santos, not a party defendant but a son of defendants Simeon and Lorenza owned a house standing on the lot. Simeon and Lorenza voluntarily removed their house. However, Leonardo refused to remove his house from the lot. The Court ordered the demolition. HELD: The judgment in the civil case binds not only Simeon and Lorenza but also their son, Leonardo, because he is a successor-in-interest of his parents and his right is claimed under them. Leonardos house having been built and reconstructed into a bigger one after his parents had been summoned in the civil case, he must be deemed a builder in bad faith. As builder in bad faith, he lost the improvement made by him without right to indemnity. The Allanigue brothers and sisters therefore became owners of the improvement built in bad faith by Leonardo. However, said owners could choose instead the demolition of the improvement at the expense of the builder. The owners, in fact, chose to have the improvement demolished.

MWSS vs. Court of Appeals

The City of Dagupan filed a complaint against the former NAWASA, now the MWSS, for recovery of ownership and possession of the Dagupan Waterworks System. NAWASA interposed as defense RA 1383 which vested upon it the ownership, possession and control of all waterworks systems in the country and as one of its counterclaims the reimbursement of the expenses it incurred and useful improvements. The trial court found NAWASA to be a possessor in bad faith and hence not entitled to reimbursement. NAWASA appealed to the CA. CA ruled that the useful expenses were made in bad faith given the numerous SC decisions declaring unconstitutional the taking by NAWASA of the patrimonial waterworks systems of cities without just compensation. MWSS, successor-in-interest of NAWASA appealed to the SC raising the sole issue of whether or not it has the right to remove all the useful improvements introduced by NAWASA, notwithstanding the fact that NAWASA was found to be a possessor in bad faith. HELD: As a builder in bad faith, NAWASA lost whatever useful improvements it had

o o

Right to compel builder or planter to pay the price of the land Limited Rights of builder, planter or sower in bad faith

Sabido vs. IAC

Dasal and Pecunio field an action for quieting of title against Rances and Sabido for ownership of two parcels of land. The court declared Sabido as owners of the two lots. When the decision was being carried out to put Sabido in possession of the lot, sheriff found three persons occupying portions of the lot: Dominador Sta. Ana and two of his tenants. He claims ownership by purchase from one, Prudencio

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made without right to indemnity. Moreover, only a possessor in good faith shall be refunded for useful expenses with the right of retention until reimbursed; and only a possessor in good faith may remove useful improvements if this can be done without damage to the principal thing and if the person who recovers the possession does not exercise the option of reimbursing the useful expenses. The right given to a possessor in bad faith is to remove improvements applies only to improvements for pure luxury or mere pleasures, provided the thing suffers no injury thereby and the lawful possessor does not prefer to retain them by paying the value they have at the time he enters into possession. applicable to this case is, accordingly, Article 449 of the Civil Code, which provides that, he who builds, plants, or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. Note that the said trees are improvements, not necessary expenses for preservation, which a builder in bad faith may recover. IF THE LANDOWNER AND THE BUILDER, PLANTER, OR SOWER (WHO IS AT THE SAME TIME THE OWNER OF THE MATERIALS) BOTH ACTED IN BAD FAITH. Bad faith of landowner o When bad faith exists on the part of the landowner

Lamungo vs. Usman

Datu Idiris was prosecuted for treason for collaborating with the Japanese during WWII. Justice of the Peace Asaad Usman and his wife Dominga Usman became interested in lots owned by Datu Idiris. Jamasali Usman, brother of Asaad, also became interested. Datu Idiris, desperately in need of money to pay his attorneys fees and the premium of his bailbond, entered into a Pacto de Retro sale with Jamasali. Justice Usman visited visited Datu Idiris and promised to help him to secure his bailbond in exchange for the sale to his wife, Dominga Usman, of the lots. Datu Idiris agreed and he was released from jail. Jamasali and Justice Usman failed to pay the balance of the purchase price of the lots. Datu Idiris wrote two complaints to the Secretary of Justice and the Office of the President. Justice Usman immediately caused the revocation of the bailbond and Datu Idiris was rearrested and brought back to jail. Datu Idiris proposed to call of the deal promising to return what was paid by Dominga. Dominga and Justice Usman agreed. Datu Idiris failed to return the money. Dominga sold the lots to Jose Angeles. Upon taking possession of the land, Angeles planted the same with coconuts. Datu Idiris filed a complaint against Justice Usman. Court declared Datu Idiris as owner of the land. Upon the promulgation of the judgment, Datu Idiris, who was badly in need of money, sold the land to Spouses Lumungo. Lumungo filed a petition to the SC raising the sole issue of whether or not Jose Angeles is entitled to reimbursement for the coconut trees planted by him. HELD: Jose Angeles was aware of sufficient facts to induce a reasonably prudent man to inquire into the status of the title to the property in question. He knew that the property was in dispute by and between the Usmans and Datu Idiris. Jose Angeles is also a nephew of Justice Usman and the controversy between the Usmans and Idiris is a matter of public knowledge. Also, Angeles was a law student and, in fact, he entered his appearance as counsel for the Usmans, in collaboration with Justice Usman. Hence, Jose Angeles is a builder in bad faith. The provisions

Municipality of Oas vs. Roa

Municipality of OAS brought an action to recover a tract of land in the pueblo of Oas, claiming that it was a part of the public square of said town. Roa alleged that he was the owner of the property. Judgment rendered in favor of the Municipality. Roa appealed. The only question of fact before the Supreme Court is one of fact: Was the property in question a part of the public square of Oas? The Supreme Court found that the testimony upon this point is to the effect that the land had always been part of the public square and of certain resolutions adopted by the principalia of the pueblo reciting the same fact. According to the documents, the land was bought by the then parish priest for the pueblo. There were also various proceedings including an order prohibiting the erection of houses in the said land and an order to the occupant of the building then standing upon the property that he should not repair it. Roa signed this resolution. It further appears that the building was almost destroyed by a storm and the pueblo ordered the complete demolition thereof. A resolution declared that the then owner of the building, Castillo, had no right to reconstruct it because it was situated in a land which did not belong to him. Roa signed this resolution. The evidence on the part of Roa shows that one Ricarte sold the land to one Roco who sold it to Castillo who, in turn, sold the said land to Roa. HELD: The two resolutions signed by Roa are competent evidence against him. They are admission to the effect that at the time the pueblo was owner of the property in question. He is a builder in bad faith as he had knowledge of the fact that his grantor was not the owner thereof. However, it appears that there is likewise bad faith on the part of the Municipality since it allowed Roa to construct the building without any opposition on its part and to so occupy it for eight years. The rights of the parties must, therefore, be determined as if they both acted in good faith. Hence, the owner of the land shall have the option of buying the

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building thereon, which is the property of defendant, or of selling to him the land on which it stands. QUERY: To Compensate or Not to Compensate Builder, Planter or Sower in Bad Faith? Art. 443 Art. 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their production, gathering and preservation. Art. 448 Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. may demand from the landowner the value of the materials and labor. BPS must pay the owner of the materials. However, if BPS has no means to pay, the LO is subsidiarily liable. This provision shall not apply if the owner makes use of the right granted by article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the landowner the value of the materials and labor.

Art. 443 General Rule: He who receives the fruits must pay for the expenses for Production, Gathering, and Preservation. Basis: To prevent unjust enrichment Application: Applies to gathered fruits. Art. 449 Exception to Art. 443: The landowner acquires what was built, planted or sown in bad faith WITHOUT compensation. Basis: Accession Continua Application: Applies to ungathered fruits.

Rules When three parties are involved Three people are involved: the landowner, the builder, and the owner of the materials. The rights of the first two are UNAFFECTED, their rights being established by the previous articles. The important thing under this article are the RIGHTS OF THE OWNER OF THE MATERIALS. Rights of the Owner of the Materials (a) If he acted in BAD FAITH, he loses all rights to be indemnified. Moreover, he can even be liable for consequential damages (As when the materials are of an inferior quality) (b) If he acted in GOOD FAITH, he is entitled to reimbursement from the builder principally since it was the builder who FIRST made use of the materials. In case of insolvency on the part of the builder, the landowner is subsidiary liable, IF HE MAKES USE of the materials. NOTE: The landowner makes use of the materials only if he appropriates the constructions. If he compels the builder to purchase the land or to demolish the construction, the landowner DOES NOT MAKE USE of the materials, hence, he cannot be held subsidiary liable. ARTICLE 456 Art. 456. In the cases regulated in the preceding articles, good faith does not necessarily exclude negligence, which gives right to damages under article 2176.

ARTICLE 455
Art. 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of the land shall answer subsidiarily for their value and only in the event that the one who made use of them has no property with which to pay. This provision shall not apply if the owner makes use of the right granted by article 450. If the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter

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ARTICLE 457-465 ACCESSION NATURAL Forms of Accession Natural 1. Alluvium (Art. 457) 2. Avulsion (Art. 459) 3. Change of course of rivers (Arts. 461-462) 4. Formation of Islands (Arts. 464-465) To compensate him because the property is subject to encumbrances and legal easements The interests of agriculture require the soil be given to the person in the best position to cultivate It may just as well be logically given to him who can best utilize the property. The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the natural decrease of the waters, or lose that inundated by them in extraordinary floods.

Art. 458.

ALLUVIUM
Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters.

When Art. 458 applicable It applies when the estate adjoins a pond or a lagoon. It does not apply when the estate adjoins a lake, a river or a creek or other streams. Definitions Pond a body of stagnant water without an outlet, larger than a puddle and smaller than a lake Lagoon a small lake ordinarily of fresh water and not very deep, fed by floods, the hoolw bed of which is bounded by the elevations of the land Lake a body of water formed in the depressions of the earth, ordinarily fresh water, coming from rivers, brooks, or springs and connected with the sea by them (Note: Laguna de Bay is a lake)

Alluvium is the soil deposited or added to (Accretion) the lands adjoining the banks of rivers, and GRADUALLY received as an EFFECT OF THE CURRENT of the waters. By law, the accretion is onwed by the owner of the estate fronting the river bank (riparian owner)

NOTE: Although used synonymously in Art. 457, there are technical differences between alluvium and accretion: (a) Accretion is the process whereby the soil is deposited, while alluvium is the soil deposited on the estate fronting the river bank. (b) Accretion is a broader term because alluvium applies only to the soild deposited on RIVER BANKS. It is possible that a soil deposit is made on the banks of lakes. That is not alluvium. Essential Requisites of Alluvium 1. The deposit should be GRADUAL and IMPERCEPTIBLE 2. That it resulted from the EFFECTS OF THE CURRENT OF THE RIVER 3. That the land where the accretion takes place is ADJACENT to the BANK OF A RIVER. Reason why alluvium granted to Riparian owner To compensate him for the loss he may suffer due to erosion or destructive force of the water

AVULSION
Art. 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a known portion of land and transfers it to another estate, the owner of the land to which the segregated portion belonged retains the ownership of it, provided that he removes the same within two years.

Definition of Avulsion Avulsion is the process whereby the current of a river creek or torrent segregates from an estate on its bank a known portion of land and transfer it to another estate. Removal of a considerable quanity of earth upon or annexation to the land or another, suddenly and by the perceptible action of the water

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Also called the force of the river since avulsion implies a VIOLENT tearing or breaking away. Also referred to as DELAYED ACCESSION in the sense that if the owner abandons the soil involved or fails to remove the same within two years, the land to which it has been attached acquires ownership thereof.

CHANGE OF COURSE OF RIVERS

Art. 461. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.

Definition of River, Creek and Torrent River a natural stream of water, of greater volume than a creek, in a more or less permanent bed or channel, with a current which may either be continous in one direction or affected by the ebb and flow of the tide Creek a small stream less than a river Torrent a violent, rushing or turbulent stream Distinctions between Alluvium and Avulsion ALLUVIUM (1) The deposit of the soil is GRADUAL (2) Soil cannot be IDENTIFIED (3) Belongs to owner of property to which it is ATTACHED AVULSION (1) SUDDEN or ABRUPT process may be seen (2) IDENTIFIABLE (3) Belongs to owner from whose property it was DETACHED

Requisites for Art. 161 to apply 1. Change must be SUDDEN in order that the old river bed may be identified. 2. The changing of the course must be MORE OR LESS PERMANENT 3. The change of the river bed must be a NATURAL one. 4. There must be a definite ABANDONMENT by the government. 5. The river must CONTINUE TO EXIST, that is, it must not completely dry up or disappear Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate, this bed shall become of public dominion.

Note: In the absence of evidence that the change in the course of the river was sudden or that it occurred through alluvium, the PRESUMPTION is that the change was gradual and was caused by alluvium Art. 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land upon which they may be cast, if the owners do not claim them within six months. If such owners claim them, they shall pay the expenses incurred in gathering them or putting them in a safe place.

Rule if New River Bed is on a Private Estate Even if the new bed is on private property the bed becomes property of public dominion, just as the old bed had been of public dominion before the abandonment. The new river banks shall likewise be of public dominion (see Hilario vs. City of Manila) Rule if New River Bed is itself Abandoned Apply Article 461, that is, the owner of the land flooded by the new change of course would own the newly abandoned bed. If the river goes back to its old course (thus, flooding the original bed), the owner of the land originally flooded would get back the ownership of the land (bed) which he had lost). Art. 463. Whenever the current of a river divides itself into branches, leaving a piece of land or part thereof isolated, the owner of the land

Rule on Uprooted Trees If the trees on the estate of A were uprooted and cast on the estate of B, A remains to be the owner of the uprooted trees, but if he does not claim them within six months, B will become the owner. If A makes the claim, he will have to shoulder the expenses for gathering or putting them in a safe place. Failure to make the claim within six months will bar any future action to recover the trees.

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retains his ownership. He also retains it if a portion of land is separated from the estate by the current. Rule if River Divides Itself into Branches If ones estate adjoins a river, but the river divides itself into branches, thus affecting the property. The owner of the estate remains the owner of the portion which: (a) May be ISOLATED from the rest; or (the portion has not physically moved) (b) May be SEPARATED from the rest. (the portion has physically moved) NOTE: This article refers to the formation of island by branching off of a river as distinguished from the formation of islands by successive accmumulation of alluvial deposits (unidenfitifable sediment) referred to in Art. 464-465. In the first, no accession takes place. In the second , accession takes place. 4. 5. Within the territorial waters or maritime zone or jurisdiction of the Philippines STATE (This is patrimonial property Manresa) Outside of our territorial jurisdiction THE FIRST COUNTRY TO EFFECTIVELY OCCUPY THE SAME (This is in accordance with the principles of Public International Law)

(b) If formed on lakes, or navigable or floatable rivers STATE (Also patrimonial property) (c) If formed on non-navigable or non-floatable rivers 1. If NEARER in margin to one bank, owner of nearer margin is SOLE owner 2. If EQUIDISTANT, the islands shall be divided longitudinally in halves, each bank getting half Definitions Navigable or floatable river if useful for floatage and commerce, whether the tides affect the water or not Non-Navigable opposite of floatable State has duty to declare which rivers are navigable and which are not Rule to follow if a New Island is formed between the Older Island and the Bank The owner of the older island is considered a riparian owner, and if the new island is nearer in margin to the older island, the owner of the older island should be considered also the owner of the new island.

FORMATION OF ISLANDS
Art. 464. Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes, and on navigable or floatable rivers belong to the State.

Art. 465.

Islands which through successive accumulation of alluvial deposits are formed in non-navigable and non-floatable rivers, belong to the owners of the margins or banks nearest to each of them, or to the owners of both margins if the island is in the middle of the river, in which case it shall be divided longitudinally in halves. If a single island thus formed be more distant from one margin than from the other, the owner of the nearer margin shall be the sole owner thereof.

SECTION 3 RIGHT OF ACCESSION WITH RESPECT TO MOVABLE PROPERTY

There are three types of accession with respect to movable property: 1. Adjunction (or conjunction) 2. Commixtion (or confusion) 3. Specification

QUERY: Who owns islands formed by unidentifiable accumulated deposits? It depends: (a) If formed on the sea

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ADJUNCTION
Art. 468 ARTICLE 466 Art. 466 Whenever two movable things belonging to different owners are, without bad faith, united in such a way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the former owner thereof for its value. If it cannot be determined by the rule given in the preceding article which of the two incorporated is the principal one, the thing of the greater value shall be so considered, and as between two things of equal value, that of the greater volume. In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper, or parchment shall be deemed the accessory thing. Test to Determine which is the Principal and which is the Accessory The principal is (in the order of preference) 1. That to which the other has been united as an ornament or for its use, or perfection (Art. 467) 2. That of greater value (Art. 468) 3. That of greater volume (Art. 468) 4. That which has greater merits from the combined consideration of utility and volume (Manresa) Special Rule In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper, or parchment shall be deemed the accessory thing (Art. 468). Rationale: What has been written, printed, etc. is considered of greater importance.

Adjunction is the process by virtue of which two movable things belonging to different owners are united in such a way that they form a single object. There is accession by adjunction only when the two things united cannot be separated without injury to them. In order that this accession of movables may take place, it is necessary: 1. That the two things belong to different owners 2. That they form a single object, or that their separation would impair their nature Different kinds of Adjunction Inclusion (example: sapphire set on a ring) Soldering (example: joining legs made of lead to a body also made of lead)

RULE TO FOLLOW IF THE ADJUNCTION CONCERNS THREE OR MORE THINGS UNITED

When the adjunction is of three or more things, Article 466 and the following articles (Art. 467-468) should be applied, in an equitable manner. Determine which is really the principal and all the rest should be considered accessories. If there be two principals, still it should be determined which, as between them, should be considered the principal, and which is the accessory. ARTICLE 467-ARTICLE 468 Art. 467 The principal thing, as between two things incorporated, is deemed to be that to which the other has been united as an ornament, or for its use or perfection.

WHEN SEPARATION OF PRINCIPAL AND ACCESSORY ALLOWED

ARTICLE 469 Art. 469 Whenever the things united can be separated without injury, their respective owners may demand their separation. Nevertheless, in case the thing united for the use, embellishment or perfection of the other, is much more precious than the principal thing, the owner of the former may demand its separation, even though the thing to which it has been incorporated may suffer some injury.

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Article 469 contemplates of two situations: Where separation is possible without injury to the things united Where the accessory is more precious than the principal. Rule when there can be separation without injury There is no real accession (Manresa). Hence, the respective owners may demand separation. Note: This applies only to soldering and inclusion because in all the rest, separation would result in substantial injury. Rule if Accessory is more Precious than the Principal Separation, although with injury (but not destruction) is allowed if the thing united for the use, embellishment, or perfection of the other is much more precious than the principal. The expenses for the separation should be borne by the person who caused the union, considering both parties are in good faith. Rule if Owner of Principal is in Bad Faith The Owner of the Accessory thing has the right to ask for payment of the value of the thing plus damages; or he may choose to have the thing belonging to him removed even if the principal is destroyed plus damages. Note: The option granted by paragraph two to the owner of the accessory is applicable to the adjunction provided in Article 469 (where separation can be done without injury or if accessory is more precious than principal); BUT in cases provided in paragraph two of Article 468 (paintings, sculpture, writings), it cannot apply because the separation cannot be made even if the principal is destroyed. The only solution is to make the owner of the principal thing pay to the owner of the accessory thing its value and the indemnity for damages. Rule if Both are in Bad Faith Both the owner of the principal and the owner of the accessory shall be considered in Good Faith. Art. 471 Whenever the owner of the material employed without his consent has a right to an indemnity, he may demand that this consist in the delivery of a thing equal in kind and value, and in all other respects, to that employed, or else in the price thereof, according to expert appraisal

WHEN ADJUNCTION DONE IN BAD FAITH

ARTICLE 470-471 Art. 470 Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the damages he may have suffered. If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing shall have a right to choose between the former paying him its value or that thing belonging to him be separated, even though for his purpose it be necessary to destroy the principal thing; and in both cases, furthermore, there shall be indemnity for damages. If either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith.

The indemnity shall be paid either by Delivery of a thing equal in kind and value Payment of price as appraised by experts Article 471 applies: To both owner of the principal and to the accessory as the law does not distinguish If the material was employed without the consent of the owner.

COMMIXTION OR CONFUSION
ARTICLE 472-473

Rule if Owner of Accessory is in Bad Faith The Owner of the Accessory shall lose the thing incorporated and shall pay to the owner of the principal thing the indemnity for damages.

Art. 472

If by will of their owners two things of the same or different kinds are mixed, or if the mixture occurs by chance, and in the latter case

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the things are not separable without injury, each owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused. Art. 473 If by the will of only one owner, but in good faith, two things of the same or different kinds are mixed or confused, the rights of the owners shall be determined by the provisions of the preceding article If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the owner of the other thing with which his own was mixed. Articles 472 to 473 deals with mixture, which is the combination or union of materials where the respective identities of the component elements are lost. As distinguished from adjunction, commixtion or confusion implies a greater interpenetration and even decomposition of the things mixed. Two kinds of Mixture Commixtion (if solids are mixed) Confusion (if liquids are mixed) Rules for Mixture If the mixtures is caused by one owner in GOOD FAITH, or by the will of both owners, or by chance, or by a common agent, then CO-OWNERSHIP results, each owner acquiring an interest or right proportional to the value of his material. If the mixture is made by one owner in BAD FAITH then o He loses his material in favor of the other o And is liable for damages If BOTH IN BAD FAITH, they both must be considered in GOOD FAITH (Manresa) When the mixture is done by the WILL of the owners, the stipulations of the parties should be CONTROLLING. When the things mixed or confused are of the SAME kind and quality, all that is needed would be to DIVIDE the mixture between the two owners. SPECIFICATION Art. 474 One who in good faith employs the material of another in whole or in part in order to make a thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the material for its value. If the material is more precious than the transformed thing or is of more value, its owner may, at his option, appropriate the new thing to himself, after first paying indemnity for the value of the work, or demand indemnity for the material. If in the making of the thing bad faith intervened, the owner of the material shall have the right to appropriate the work to himself without paying anything to the maker, or to demand of the latter that he indemnify him for the value of the material and the damages he may have suffered. However, the owner of the material cannot appropriate the work in case the value of the latter, for artistic or scientific reasons, is considerably more than that of the material. Specification is the giving of a new form to anothers material thru application of labor (Sanchez Roman). In this kind of accession, it is not possible to separate the material that has been used and the form, creation, or work which has been employed upon or given to it. The material undergoes a transformation or change in identity (Manresa). The transformation need not be made personally by the one who makes use of the materials; it may be made though others working under his orders. Examples of Specification Baking a cake with flour of another Using the paint of another to make a painting on your own canvass (Note: If you use your own paint on the canvas of another, this is adjunction as the canvas is considered the accessory) Using clothing materials of another to make a suit

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WHEN SPECIFICATION DONE IN GOOD FAITH GENERAL RULE: If the Principal (Worker) is in GOOD FAITH He appropriates the new thing BUT he must indemnify the owner of the materials for its value EXCEPTION: If the materials (accessory) is more precious than the new thing or is more valuable, the owner of the material has the option To get the new thing but pay for its work; OR to demand indemnity for the material WHEN SPECIFICATION DONE IN BAD FAITH GENERAL RULE: If the Principal (Worker) is in BAD FAITH, the owner of the material has the OPTION To appropriate the work WITHOUT paying for the labor OR he can demand indemnity for the materials plus damages EXCEPTION: The option to appropriate Is NOT available if the value of the resultant work is more valuable for artistic or scientific reasons. SPECIFICATIONS DISTINGUISHED FROM MIXTURE AND ADJUNCTION ADJUNCTION Involves at least two things MIXTURE Involves at least two thing SPECIFICATION May involve only one thing (may be more) but form is unchanged As a rule, accessory follows principal The new object retains or preserves the nature of the original object ARTICLE 475 Art. 475 In the preceding articles, sentimental value shall be duly appreciated

COMMENT OF PARAS: It is often a thing for some sentimental reasons may be worth to its owner much more than its actual value.

The reviewer is mainly based on the book of Paras and the cases assigned by Atty. Certeza with inputs from the book of Tolentino and Certezas powerpoint lectures 1. 2. 3. 4. 5. Memorize Article 415, 416 and 417. As for the rest, understand the concepts in the provisions and how they are operationalized and applied. Multiple choice is the trend. However, do prepare for essay and enumeration (the enumeration being Article 415-417) The key to studying property is, and I quote again, The more you understand, the less you have to remember. Study hard and after you do pray hard as well.

Pierre Martin Reyes Property Midterm Reviewer Version 1.0

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As a rule, accessory follows the principal The things joined retain their nature

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As a rule, coownership results The things mixed or confused may either retain or lose their respective natures

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3.

3.

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