PROPERTY, OWNERSHIP AND ITS MODIFICATION

Morillo Notes

CLASSIFICATION OF THINGS:
1. Res Communes - things which belong to everybody.
BOOK II – CIVIL CODE OF THE PHILIPPINES
(Sunlight, moonlight, moving air)
PROPERTY LAW
2. Res Alicujus - things which are owned by a person
MORILLO NOTES or group of persons. (Person’s house and lot, pieces
of jewelry, cars)
3. Res Nillius - things which do not have any owner.
(Whales and sharks in the ocean, or Wild animals in
Title I - CLASSIFICATION OF PROPERTY
the forest)

CLASSIFICATION OF PROPERTY:
CONCEPT OF PROPERTY
CLASSES: TYPES: DEFINITION:
DEFINITION OF PROPERTY: Movable or Can be transferred from one
Mobility:
- All things which are or may be the object of Personal place to another without
appropriation are considered either: (1) Immovable or being destroyed. (Ex. Car or
real property; or (2) Movable or personal property. Chair)
(Art. 414, NCC)
Immovable or Cannot be transferred from
REQUISITES OF PROPERTY: Real one place to another without
1. Utility: destruction to itself. (Ex.
Concrete Building, land, and
- Capacity to satisfy some human wants,
trees)
such as for food, shelter, clothing,
knowledge, comfort, recreation, etc., Public Property pertaining to the
Ownership:
- This is generally economic endows property Dominion State and intended for
with value susceptible of pecuniary public use, public service
estimation. and for development of the
2. Substantivity or individuality: national wealth. (Art. 420,
- Quality of having existence apart from any NCC)
other thing.
3. Appropriability: Private all property belonging to
Ownership private persons, either
- Susceptible of being possessed by men.
individually or collectively.
(Art. 425, NCC)
CONCEPT OF PROPERTY:
- It is an object or a right which is appropriated or Patrimonial Property of the State and its
susceptible of appropriation by man, with capacity to Property subdivisions not intended
satisfy human wants and needs. (Pineda (2009), for public use, public
Property, p.1) service, or for development
of national wealth. This is
CONCEPT OF THINGS: the private property of the
State or its political
- Things refers to existing objects which can be of subdivisions.
some use to man. (Pineda (2009), p. 2)
Alienability: Alienable Property which could be the
CONCEPT OF APPROPRIATION: (Within the object of juridical
- This is the act of taking for one’s own use. It is commerce of transactions. (Ex. Private
equivalent to occupation, that is, the physical seizing man) land, Personal Stocks)
of corporeal things which have no owner with the
intention to acquire their ownership. (Pineda (2009), Inalienable Property which could not be
p. 2) (Outside the the object of juridical
commerce of transaction. (Ex. Public
man) Plaza)
DISTINCTION BETWEEN THINGS AND PROPERTY:
THINGS: PROPERTY: Individuality: Specific Fixed, definite, and
individually identified. (Ex.
House located at 12 Rizal,
Broader Scope Specific Scope
St., Malabon City)

Refers to all objects that Refers to objects already General Indicated by its
exist including those which possessed by man or are in homogeneity or its class.
could not be appropriated their possession. (Horse without identifying its
by man. (Stars, moons, etc.) breed)

Involves only corporeal May refer to intangible Susceptibility Tangible Could be physically touched
objects matters (like rights and to Touch: and has physical existence
credits) whether real or personal
property. (Ex. House; Car,
Note: Under Art. 414, NCC, things become immovable or movable Jewelry)
property if they are or may be the object of appropriation. If things are
beyond human control or appropriation (like heaven or stars), they do
not qualify as property. (Pineda (2009), p. 2)

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 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- In juridical sense, things include both corporeal
Intangible Could not be physically
touched. (Ex. Credit, objects as well as rights (which refers to relations).
goodwill, Rights) - Only patrimonial rights can be considered as things.
Non-patrimonial rights (like right to liberty, right to
Susceptibility Fungible Belongs to a common genus live, family rights) cannot be considered a property. (7
of permitting its substitution. Llerena 5-9)
(Ex. Grains of salt or sugar,
Substitution:
oil, vinegar) CLASSES OF RIGHTS CONSIDERED AS PROPERTY:
1. Real Right:
Non- Specified and not subject to - Power belonging to a person over a specific
Fungible substitution. (Ex. A specific
thing, without a passive subject individually
house in a specific address;
a particular car with specific determined against whom such right may be
engine number and plate personally exercised. (3 Sanchez Roman 6-
number) 8)
- It can be exercised not only against a
Accession: Principal Property to which another particular person but against the whole
(Ex. in a diamond property is incorporated as world.
ring, the principal an ornament or for the use 2. Personal Right:
is the ring while or perfection of the first. (Art. - Power belongs to one person to demand
the diamond is 467; Art. 468, NCC)
another, without a passive subject, the
the accessory)
fulfillment of a prestation to give, to do or
Accessory Property which has been
united as an ornament to or
not to do. (Supra)
the use of perfection of - This is the equivalent of right of obligation
another property. which means the obligee can enforce the
right against the obligor.

OTHER CLASSIFICATION OF PROPERTY:

1. Mixed Property: IMMOVABLE PROPERTY
- Property which is personal in its essential
nature, but is invested by the law with
certain characteristics and features of real
property. (Black Law’s Dictionary, 6th CONCEPT OF IMMOVABLE PROPERTY:
Edition) - Originally, the meaning of “Immovable property”
- Example: Heir-looms, fixtures, and title- under the Roman Law “is one which is firmly fixed, or
deeds to an estate fastened in a definite place” like a building. It cannot
2. Qualified Property: be transferred from one place to another because of
- Property in chattels which is not in its nature its impossibility or without destroying or injuring it.
permanent, but may at some times subsist - However, Under Art. 415, NCC, the definition
and not at other times. (Supra) suffered legal mutation because some properties
- Example: Property of a man in wild animals which could be transferred from one place to another
which he has caught and keeps, and which without suffering injury or destruction are now
are his only so long as he retains possession considered immovables such as the “animals” in
of them. Any ownership not absolute. animal houses, the “pigeons” in pigeon houses, “fish”
3. Mislaid Property: in fishponds.
- Property which the owner has voluntarily
parted with, with the intention of retrieving it JURIDICAL CLASSIFICATION OF IMMOVABLE
later, but which cannot now be found. PROPERTIES:
- It does not include intentionally hidden 1. Immovable by Nature:
property, and is distinguished from “lost” - Properties which cannot be moved from one
property which the owner has parted with place to another.
casually and involuntarily. (Supra) - Examples: Lands, tress, mines, quarries,
4. Special Property: slag dumps.
- Property of a qualified, temporary, or limited 2. Immovable by Incorporation:
nature as distinguished from absolute, - Properties which are basically movables or
general, or unconditional property. (Supra) transferable but permanently attached to an
- Example: Property of a bailee in the article immovable.
bailed; Property of a sheriff in goods - Example: Statutes, reliefs, paintings fixedly
temporarily in his hands under a levy; placed on buildings.
Property of the finder of lost of goods while 3. Immovable by Destination:
looking for the owner; Property of a person - Properties which are basically movables but
in wild animals which he caught. having been fixed in immovable properties
for purposes of the business or functions of
ATTRIBUTES OF PROPERTY: the owner of the immovable property, they
1. Susceptible of appropriation; partake of the nature of the latter.
2. Capacity to satisfy moral or economic needs; - Example: Machinery or instrument placed
3. Individuality or it has a separate and autonomous in a building to meet the needs of the
existence. (Human hair is not property until it is cut) industry or works of the owner of the said
building; Or docks and structures floating in
“RIGHTS” CONSIDERED AS PROPERTY: a fixed place in a river, lake or coast.
4. Immovable by Analogy:

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 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Properties which are not actually tangible house are personal properties. (Bicerra, et. al. vs.
properties, but are rights and interests over Teneza, et. al., 6 SCRA 649)
existing immovable properties. They are - The mention of the word “building” is separate and
considered immovables for convenience in distinct from “land” in Art. 415 (par. 1) can only mean
dealing with them as they are inseparable that the building by itself is another immovable
from the immovables from which they arise. property. (Lopez vs. Orosa, Jr., 103 Phil. 98)
- Example: Easements over an immovable; - A building may be mortgaged separately from the
Contract for public works; Usufruct over an land and the mortgage is a real estate mortgage.
immovable; Sugar quotas under RA 1825) Consequently, the mortgage of a building is a real
estate mortgage and not a chattel mortgage. (Leung
KINDS OF IMMOVABLE PROPERTY: Yee vs. Strong Machinery Co., 37 Phil. 644)
1. Land, buildings, roads and constructions of all kinds
adhered to the soil;
CAN A HOUSE BE THE OBJECT OF A CHATTEL MORTGAGE?
2. Trees, plants, and growing fruits, while they are YES, provided that it complied with these 2 conditions: (a) The
attached to the land or form an integral part of an parties mutually agreed to consider the house a personality; and
immovable; (b)that no innocent third person shall be prejudiced. (Evangelista vs.
3. Everything attached to an immovable in a fixed Abad, 36 OG. 2913; Navarro vs. Pineda, 9 SCRA 631)
manner, in such a way that it cannot be separated
therefrom without breaking the material or The validity of the chattel mortgage constituted in a house which is
deterioration of the object; a real property cannot be questioned by the owner of the house
because he is placed under estoppel from denying the existence of
4. Statues, reliefs, paintings or other objects for use or
the chattel mortgage. However, a building subjected to a chattel
ornamentation, placed in buildings or on lands by the mortgage cannot be sold extra-judicially under the provisions of
owner of the immovable in such a manner that it Act no. 3135 since said Act refers only to real estate mortgages.
reveals the intention to attach them permanently to (Luna vs. Encarnacion, Supra)
the tenements;
5. Machinery, receptacles, instruments or implements For purposes of sale of public auction (Sec. 18, Rule 39, ROC) on
intended by the owner of the tenement for an execution sales, the building or house shall be treated as Real
industry or works which may be carried on in a Property. The requirements of the Rules of Court on foreclosure of
real estate mortgages must therefore be followed. (Manarang, et al.
building or on a piece of land, and which tend directly
vs. Ofilada, 99 Phil.. 108)
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
LADERA vs. HODGES
owner has placed them or preserves them with the Vol. 48, no. 12 OG. 5374
intention to have them permanently attached to the
land, and forming a permanent part of it; the animals FACTS: Hodges entered into a contract promising to sell a lot to
in these places are included; Ladera under certain terms and conditions. One of which is that the
7. Fertilizer actually used on a piece of land; contract may be rescinded and annulled in case Ladera failed to
8. Mines, quarries, and slag dumps, while the matter make the monthly payment 60 days after it is due. After the
thereof forms part of the bed, and waters either execution of the contract, Ladera built a house on the lot assessed
running or stagnant; at 4,500 pesos. However, Ladera failed to pay the agreed
installments so Hodges rescinded the contract and filed an action
9. Docks and structures which, though floating, are
for ejectment. The MTC ruled in favor of Hodges and issued an
intended by their nature and object to remain at a alias writ of execution. Pursuant thereto, the sheriff levied upon all
fixed place on a river, lake, or coast; rights, interests and participation over the house. Notices of sale
10. Contracts for public works, and servitudes and other were posted, however, were not published in a newspaper of
real rights over immovable property. (Art. 415, NCC) general circulation.

An auction sale was then conducted but Ladera was not able to
Paragraph 1: attend as she had gone to Manila. The house was then sold to one
LANDS, BUILDINGS, ROADS AND CONSTRUCTIONS OF Avelina Magno as the highest bidder. Meanwhile, Ladera sold the
ALL KINDS same lot to one Manuel Villa and on the same day purchased the
ADHERED TO THE SOIL house from Magno for 200 pesos. This, however, was not
recorded. Ladera then returned to Iloilo and learned what
happened. She went to see the sheriff and represented that the
LANDS: property can still be redeemed and so she gave him 230 pesos. It
does not appear, however, that it was turned over to Hodges.
- Lands are immovable or real property by its very
Thereupon, Ladera filed an action against Hodges, the sheriff,
nature. Magno and Villa to set aside the sale and recover the house. The
- A truckful of soil taken from the land (like garden soil) lower court ruled in favor of Ladera on the ground of non-
is a personal property because it is no longer compliance based on Rule 39 of the Rules of Court. On appeal,
adhered to the land. however, the moment it is used Hodges contends that the house, built on a lot owned by another,
to cover a land for ornamentation or gardening, it should be regarded as movable or personal property. The sale of
becomes immovable again. the land was also made without proper publication required by law.

ISSUE: W/N the subject house is an immovable property?

BUILDINGS:
- Buildings are permanent structures that adheres to
RULING: The subject house is an immovable property. As
the land. It is immovable whether built in one’s own enumerated in the Civil Code, immovable property includes lands,
land or on a rented land. buildings, roads and constructions of all kinds adhered to the soil.
- A structure which is merely superimposed on a land The law does not make any distinction whether or not the owner of
like a temporary shelter for workers is not a real or the lot was the one who built the construction. Also, Ladera did not
immovable property. (Luna vs. Encarnacion, 91 Phil. declare his house to be a chattel mortgage. The object of the levy
531). However, the materials saved in a demolished or sale was real property and its publication in a newspaper of

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 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

general circulation was indispensable. Without it, the execution sale
was void. In addition, Magno, the alleged purchaser at the auction PLANTS:
sale, was a mere employee of Hodges and the low bid made by her - Plants adhered to the soil by incorporation are
as well as the fact that she sold the house to Villa on the same day immovable property. On the other hand, plants on
Hodges sold him the land, proves that she was merely acting for pots used for ornamentation are personal property
and in behalf of Hodges. because the pots could be moved from place to
another.
In the sale of immovables, the lack of title of the vendor taints the - Trees and plants planted on a land are owned by
rights of the subsequent purchasers. Possession in good faith is
the registered owner of the land unless the owner
not equivalent to title. The principles of accession regard buildings
and constructions as mere accessories to the land on which it is recognized the ownership in the hands of another.
built, it is logical that said accessories should partake in the nature (Lavarro vs. Labitoria, 54 Phil. 288)
of the principal thing.
GROWING CROPS (Standing Crops):
- Gen. Rule: These are considered real property by
SANTOS EVANGELISTA vs. ALTO SURETY & INSURANCE CO. incorporation as long as they had not been gathered
GR no. L-11139, April 23, 1958 yet.
- Exception: If they had been harvested already, they
Respondent maintains, however, and the Court of Appeals held, are considered personal property even if still lying on
that Rivera's house is personal property, the levy upon which must the riceland like palay.
be made in conformity with subsections (c) and (e) of said section 7
- Growing crops can the subject of a chattel mortgage
of Rule 59. Hence, the main issue before us is whether a house,
constructed the lessee of the land on which it is built, should be by express provision of law, such as Act No. 1508.
dealt with, for the purposes of attachment, as immovable property, (Sibal vs. Valdez, 50 Phil. 512)
or as personal property.

It is, our considered opinion that said house is not personal Paragraph 3:
property, much less a debt, credit or other personal property not EVERYTHING ATTACHED TO AN IMMOVABLE IN
capable of manual delivery, but immovable property. As explicitly A FIXED MANNER, IN SUCH A WAY THAT IT CANNOT
held, in Laddera vs. Hodges (48 Off. Gaz., 5374), "a true building BE SEPARATED THEREFROM
(not merely superimposed on the soil) is immovable or real WITHOUT BREAKING THE MATERIAL
property, whether it is erected by the owner of the land or by
OR DETERIORATION OF THE OBJECT
usufructuary or lessee. This is the doctrine of our Supreme Court in
Leung Yee vs. Strong Machinery Company, 37 Phil., 644. And it is
amply supported by the rulings of the French Court. . . ." RES VINTA:
- These are immovables by incorporation which when
It is true that the parties to a deed of chattel mortgage may agree
to consider a house as personal property for purposes of said
separated from the immovable, they regain their
contract (Luna vs. Encarnacion, * 48 Off. Gaz., 2664; Standard Oil condition as movable property.
Co. of New York vs. Jaramillo, 44 Phil., 630; De Jesus vs. Juan Dee - Examples: Ceiling fans attached to a ceiling; Or fire
Co., Inc., 72 Phil., 464). However, this view is good only insofar as escape in a building.
the contracting parties are concerned. It is based, partly, upon the
principle of estoppel. Neither this principle, nor said view, is ADDITIONAL NOTES:
applicable to strangers to said contract. Much less is it in point - The steel towers of MERALCO not attached to an
where there has been no contract whatsoever, with respect to the
immovable in a fixed manner are not really and
status of the house involved, as in the case at bar.
therefore not subject to realty tax. The towers can be
separated from the ground without breaking or
CONSTRUCTIONS OF ALL KINDS ADHERED TO THE causing deterioration upon the object to which they
SOIL: are attached. (Board of Assessment Appeals vs.
- These refers to structions adhered to the soil more or MERALCO, 119 Phil. 328)
less permanently. (3 Manresa 18) - However, storage tanks of an electric company
- Examples: A fence made of adobe stones; Or a installed on land leased from the refinery of the
cemented dike. Caltex are subject to realty tax being realty.
(MERALCO vs. Board of Assessment Appeals, 114
scra 273)
Paragraph 2: - Machinery of a transportation company such as
TREES, PLANTS, AND GROWING FRUITS, WHILE THEY welder, boring machine, lather machine, etcetera
ARE ATTACHED TO THE LAND OR FORM AN INTEGRAL “sitting on a cement platform” which are not essential
PART OF AN IMMOVABLE to the transportation business of the owner of the
tenement do not constitute realty. (Mindanao Bus Co.
TREES: vs. City Assessor, 116 Phil. 501)
- Gen. Rule: By their nature, trees are immovable - Machinery of breweries utilized in the liquor and
property because they are not to be moved from one softdrinks manufacturing, though movable in nature,
place to another. are immobilized by destination being essential to said
- If trees are just bent to the ground by a strong industry. (Berkenkotter vs. Cu Unjieng Hiyos, 61 Phil.
typhoon but the roots still remain embedded in the 683)
ground, they are still real property.
- Coconut trees are real properties as long as they are YAP vs. TANADA
attached to the land. (Gegullana vs. Buenaventura, GR no. L-32917, July 18, 1988
et. al., CA-GR no. L-3861-R, January 31, 1951)
- Exception: The moment when the trees are cut or Yap's next argument that the water pump had become immovable
uprooted, they become personal property because property by its being installed in his residence is also untenable.
they ceased to be adhered to the soil.

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 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

regain back their condition as personal property.
The Civil Code considers as immovable property, among others,
anything "attached to an immovable in a fixed manner, in such a (Ago vs. CA, 6 SCRA 530)
way that it cannot be separated therefrom without breaking the - Machinery and equipment attached by the owner of
material or deterioration of the object." The pump does not fit this the tenement to the concrete foundation of a building
description. It could be, and was in fact separated from Yap's in a fixed manner, which are necessary to meet the
premises without being broken or suffering deterioration. Obviously needs of the industry or works of the owner and to
the separation or removal of the pump involved nothing more remove them it is necessary to unbolt them and to
complicated than the loosening of bolts or dismantling of other cut their wooden supports, are real properties. They
fasteners.
cannot be subject to replevin. (Machinery and
Engineering Supplies, inc. vs. CA, 96 Phil. 70)
- The machines although each of them was movable
Paragraph 4: and personal property on its own, all of them have
STATUES, RELIEFS, PAINTINGS OR OTHER OBJECTS become immobilized by destination because the are
FOR USE OR ORNAMENTATION, PLACED IN essential and principal elements in the industry.
BUILDINGS OR ON LANDS, BY (Serg’s Products, Inc., vs. PCI Leasing and Finance,
THE OWNER OF THE IMMOVABLE IN SUCH 338 SCRA 499)
A MANNER THAT IT REVEALS THE
INTENTION TO ATTACH THEM MACHINERY, INSTRUMENTS, IMPLEMENTS INSTALLED
PERMANENTLY TO THE TENEMENTS BY A LESSEE OF A TENEMENT OR LAND:
- Gen. Rule: These machinery, etc., are personal or
INTENTION TO ATTACH PERMANENTLY; ESSENTIAL: movable property. Immobilization by destination
- The statue, relief (piece of sculpture), painting or cannot be made by a person whose possession over
other objects for use or ornamentation must be the land or tenement is merely temporary, otherwise,
placed on the land or building with the intention to there will be the inevitable presumption that he
attach them. intended to give away the property permanently in
- These are immovable by incorporation and favor of the lessor even if there is no agreement to
destination. Generally, they can be removed from the the contrary. (Davao Sawmill Co. vs. Castillo, 61 Phil.
immovable without destruction. 709)
- Example: A life-sized statue of Dr. Jose Rizal was - Exception: if the lessee agreed to give the
placed permanently in a courtyard. machinery, etc., to the lessor upon the termination of
the lease, these machinery, etc. shall be considered
PERSONS RESPONSIBLE FOR THE ATTACHMENT: immovable property. (Valdez vs. Central Altagracia,
- The one who placed the statue, etc. must be the Ic., 225 US 58)
owner of the land or building or his representatives or
agents. If attached by a mere tenant, the objects MINDANAO BUS CO. vs. CITY ASSESSOR
remain personal property for purposes of the Chattel GR no. L-17870, September 29, 1962
Mortgage law. (Davao Sawmill vs. Castillo, 61 Phil.
709) So that movable equipments to be immobilized in contemplation of
- When the object was placed by a lessee of the land the law must first be "essential and principal elements" of an
industry or works without which such industry or works would be
or building with the stipulation that the object shall
"unable to function or carry on the industrial purpose for which it
remain in the immovable property upon the was established." We may here distinguish, therefore, those
termination of the lease contract, without any movable which become immobilized by destination because they
obligation of reimbursing the lessee, the object are essential and principal elements in the industry for those which
becomes immovable for the lessee is considered an may not be so considered immobilized because they are merely
agent of the owner of the tenement. (Valdez vs. incidental, not essential and principal. Thus, cash registers,
Central Altogracia, 225 US 58; Davao Sawmill Co. vs. typewriters, etc., usually found and used in hotels, restaurants,
Castillo, 61 Phil. 709) theaters, etc. are merely incidentals and are not and should not be
considered immobilized by destination, for these businesses can
continue or carry on their functions without these equity comments.
Paragraph 5: Airline companies use forklifts, jeep-wagons, pressure pumps, IBM
MACHINERY, RECEPTACLES, INSTRUMENTS OR machines, etc. which are incidentals, not essentials, and thus retain
their movable nature. On the other hand, machineries of breweries
IMPLEMENTS INTENDED BY THE OWNER used in the manufacture of liquor and soft drinks, though movable
OF THE TENEMENT FOR AN INDUSTRY OR WORKS in nature, are immobilized because they are essential to said
WHICH MAY BE CARRIED ON IN A BUILDING OR ON A industries; but the delivery trucks and adding machines which they
PIECE OF LAND, AND usually own and use and are found within their industrial
WHICH TEND DIRECTLY TO MEET THE compounds are merely incidental and retain their movable nature.
NEEDS OF THE SAID INDUSTRY OR WORKS
Similarly, the tools and equipments in question in this instant case
are, by their nature, not essential and principle municipal elements
MACHINERY, ETC., MUST BE DESTINED FOR THE USE IN of petitioner's business of transporting passengers and cargoes by
THE INDUSTRY OR WORKS OF THE OWNER OF THE motor trucks. They are merely incidentals — acquired as movables
and used only for expediency to facilitate and/or improve its
TENEMENT:
service. Even without such tools and equipments, its business may
- The machinery, receptacles, instruments or be carried on, as petitioner has carried on, without such
implements must be intended by the owner of the equipments, before the war. The transportation business could be
tenement for an industry or works being carried in the carried on without the repair or service shop if its rolling equipment
land or in a building and which are necessary for the is repaired or serviced in another shop belonging to another.
pursuit of the said industry or works.
- The moment these objects are separated from the Aside from the element of essentiality the above-quoted provision
land or building or from the industry or works, they (Art. 415, par. 5, NCC) also requires that the industry or works be

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 PROPERTY, OWNERSHIP AND ITS MODIFICATION
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carried on in a building or on a piece of land. Thus in the case of involved in the above Tumalad case, may be considered as
Berkenkotter vs. Cu Unjieng, supra, the "machinery, liquid personal property for purposes of executing a chattel mortgage
containers, and instruments or implements" are found in a building thereon as long as the parties to the contract so agree and no
constructed on the land. A sawmill would also be installed in a innocent third party will be prejudiced thereby, there is absolutely
building on land more or less permanently, and the sawing is no reason why a machinery, which is movable in its nature and
conducted in the land or building. becomes immobilized only by destination or purpose, may not be
likewise treated as such. This is really because one who has so
But in the case at bar the equipments in question are destined only agreed is estopped from denying the existence of the chattel
to repair or service the transportation business, which is not carried mortgage.
on in a building or permanently on a piece of land, as demanded by
the law. Said equipments may not, therefore, be deemed real
property. SERG’S PRODUCTS, INC. vs. PCI LEASING
GR no. 137705, August 22, 2000

MAKATI LEASING & FINANCE CORP. vs. WEAREVER TEXTILE In the present case, the machines that were the subjects of the Writ
MILLS, INC. of Seizure were placed by petitioners in the factory built on their
GR no. L-58469, May 16, 1983 own land. Indisputably, they were essential and principal elements
of their chocolate-making industry. Hence, although each of them
FACTS: Petitioner Makati Leasing, the private respondent was movable or personal property on its own, all of them have
Wearever Textile Mills, Inc., discounted and assigned several become "immobilized by destination because they are essential
receivables with the former under a Receivable Purchase and principal elements in the industry." In that sense, petitioners
Agreement. To secure the collection of the receivables assigned, are correct in arguing that the said machines are real, not personal,
private respondent executed a Chattel Mortgage over certain raw property pursuant to Article 415 (5) of the Civil Code.
materials inventory as well as a machinery described as an Artos
Aero Dryer Stentering Range. The Court of Appeals, in certiorari The Court has held that contracting parties may validly stipulate
and prohibition proceedings subsequently filed by herein private that a real property be considered as personal. 18 After agreeing to
respondent, set aside the Orders of the lower court and ordered the such stipulation, they are consequently estopped from claiming
return of the drive motor seized by the sheriff pursuant to said otherwise. Under the principle of estoppel, a party to a contract is
Orders, after ruling that the machinery in suit cannot be the subject ordinarily precluded from denying the truth of any material fact
of replevin, much less of a chattel mortgage, because it is a real found therein.
property pursuant to Article 415 of the new Civil Code, the same
being attached to the ground by means of bolts and the only way In the present case, the Lease Agreement clearly provides that the
to remove it from respondent's plant would be to drill out or machines in question are to be considered as personal property.
destroy the concrete floor, the reason why all that the sheriff could Clearly then, petitioners are estopped from denying the
do to enfore the writ was to take the main drive motor of said characterization of the subject machines as personal property.
machinery. The appellate court rejected petitioner's argument that Under the circumstances, they are proper subjects of the Writ of
private respondent is estopped from claiming that the machine is Seizure.
real property by constituting a chattel mortgage thereon.
It should be stressed, however, that our holding — that the
Whether the machinery in suit is real or personal property from the machines should be deemed personal property pursuant to the
point of view of the parties, with petitioner arguing that it is a Lease Agreement — is good only insofar as the contracting parties
personality, while the respondent claiming the contrary, and was are concerned. Hence, while the parties are bound by the
sustained by the appellate court, which accordingly held that the Agreement, third persons acting in good faith are not affected by its
chattel mortgage constituted thereon is null and void, as contended stipulation characterizing the subject machinery as personal. In any
by said respondent. event, there is no showing that any specific third party would be
adversely affected.
RULING: A similar, if not Identical issue was raised in Tumalad v.
Vicencio, 41 SCRA 143 where this Court, speaking through Justice
J.B.L. Reyes, ruled: MANILA ELECTRIC COMPANY vs. CITY ASSESSOR
“Although there is no specific statement referring to the GR no. 166102, August 5, 2015
subject house as personal property, yet by ceding, selling
or transferring a property by way of chattel mortgage While the Local Government Code still does not provide for a
defendants-appellants could only have meant to convey specific definition of "real property," Sections 199(o) and 232 of the
the house as chattel, or at least, intended to treat the said Code, respectively, gives an extensive definition of what
same as such, so that they should not now be allowed to constitutes "machinery" and unequivocally subjects such
make an inconsistent stand by claiming otherwise. machinery to real property tax. The Court reiterates that the
Moreover, the subject house stood on a rented lot to machinery subject to real property tax under the Local Government
which defendants-appellants merely had a temporary Code "may or may not be attached, permanently or temporarily to
right as lessee, and although this can not in itself alone the real property;" and the physical facilities for production,
determine the status of the property, it does so when installations, and appurtenant service facilities, those which are
combined with other factors to sustain the interpretation mobile, self-powered or self-propelled, or are not permanently
that the parties, particularly the mortgagors, intended to attached must (a) be actually, directly, and exclusively used to meet
treat the house as personality. Finally, unlike in the Iya the needs of the particular industry, business, or activity; and (2) by
cases, Lopez vs. Orosa, Jr. & Plaza Theatre, Inc. & Leung their very nature and purpose, be designed for, or necessary for
Yee vs. F.L. Strong Machinery & Williamson, wherein third manufacturing, mining, logging, commercial, industrial, or
persons assailed the validity of the chattel mortgage, it is agricultural purposes.
the defendants-appellants themselves, as debtors-
mortgagors, who are attacking the validity of the chattel Article 415, paragraph (1) of the Civil Code declares as immovables
mortgage in this case. The doctrine of estoppel therefore or real properties "[l]and, buildings, roads and constructions of all
applies to the herein defendants-appellants, having kinds adhered to the soil." The land, buildings, and roads are
treated the subject house as personality.” immovables by nature "which cannot be moved from place to
place," whereas the constructions adhered to the soil are
Examining the records of the instant case, We find no logical immovables by incorporation "which are essentially movables, but
justification to exclude the rule out, as the appellate court did, the are attached to an immovable in such manner as to be an integral
present case from the application of the abovequoted part thereof.” Article 415, paragraph (3) of the Civil Code, referring
pronouncement. If a house of strong materials, like what was to "[ejverything attached to an immovable in a fixed manner, in

6 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- The moment the fish is gathered from the fishpond, it
such a way that it cannot be separated therefrom without breaking
the material or deterioration of the object," are likewise immovables is considered personal property because the fish
by incorporation. In contrast, the Local Government Code ceased to be part of the fishpond or breeding place
considers as real property machinery which "may or may not be once extracted therefrom. Likewise, animals which
attached, permanently or temporarily to the real property," and had escaped from animal houses ceased to become
even those which are "mobile." part of the immovable.
- Cages for parrots and other domesticated birds
Article 415, paragraph (5) of the Civil Code considers as which are hanging on houses or buildings are not
immovables or real properties "[machinery, receptacles,
realty because they can be moved from place to
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 place.
a piece of land, and which tend directly to meet the needs of the
said industry or works." The Civil Code, however, does not define
Paragraph 7
"machinery."
FERTILIZER ACTUALLY USED
The properties under Article 415, paragraph (5) of the Civil Code ON A PIECE OF LAND
are immovables by destination, or "those which are essentially
movables, but by the purpose for which they have been placed in
an immovable, partake of the nature of the latter because of the NOTES:
added utility derived therefrom.” These properties, including - If it is still inside the sack or container, it is still
machinery, become immobilized if the following requisites concur: movable or personal property. However, the moment
(a) they are placed in the tenement by the owner of such tenement; it is spread or applied directly to the soil, it becomes
(b) they are destined for use in the industry or work in the tenement; immovable by destination and incorporation.
and (c) they tend to directly meet the needs of said industry or - Once the fertilizer permeated the soil, it cannot be
works. The first two requisites are not found anywhere in the Local
removed from it anymore without scraping the soil
Government Code.
and destroying it.
MERALCO insists on harmonizing the aforementioned provisions of
the Civil Code and the Local Government Code. The Court
Paragraph 8:
disagrees, however, for this would necessarily mean imposing
additional requirements for classifying machinery as real property MINES, QUARRIES, AND SLAG DUMPS, WHILE THE
for real property tax purposes not provided for, or even in direct MATTER THEREOF FORMS PART OF THE BED, AND
conflict with, the provisions of the Local Government Code. WATERS EITHER RUNNING OR STAGNANT

As between the Civil Code, a general law governing property and

property relations, and the Local Government Code, a special law MINES:
granting local government units the power to impose real property - These are mineral lands where excavations are done
tax, then the latter shall prevail. to extract minerals such as gold, ore, etc.
- The minerals found in these mines, when still
attached thereto are real property. After extraction,
Paragraph 6: the minerals become chattels. (Pineda (2009),
ANIMAL HOUSES, PIGEON-HOUSES, BEEHIVES, FISH Property, p. 17)
PONDS OR BREEDING PLACES OF SIMILAR NATURE,
IN CASE THEIR OWNER HAS PLACED THEM QUARRIES:
PERMANENTLY ATTACHED TO THE LAND, AND - These are lands where stones are chipped of or
FORMING A PERMANENT PART OF IT; THE ANIMALS where sand is being extracted. The stones and sand
IN THESE PLACES ARE INCLUDED are considered real property. Once extracted, they
become movables.

COVERAGE OF ART. 414, PAR. 6: SLAG DUMPS:

- Houses referred under Art. 414, par. 6, NCC, covers - Consist of the waste and dirt taken from a mine and
animal houses, etc. mounted on the surface of the ground under
- Similar to art. 414, par. 1, NCC, in the sense that, if excavation. Minerals are sieved from these slag
they are adhered to the soil permanently, they are dumps.
immovable property because they are “constructions
of all kinds adhered to the soil.” (Art. 414, par. 1, RUNNING OR STAGNANT WATERS:
NCC) - These waters refer to waters still running through the
soil or ground in mines and quarries.
BEEHIVES, FISHPONDS OR BREEDING PLACES OF
SIMILAR NATURE ARE REAL PROPERTY; ANIMALS
CONTAINED THEREIN, INCLUDED: CAPITOL WIRELESS, INC. vs. PROVINCIAL TREASURER OF
- Beehives when purposely constructed and attached BATANGAS
GR no. 180110, May 30, 2016
to the ground or on another immovable (like a tree or
a wall), fishponds and other similar breeding places, Submarine or undersea communications cables are akin to electric
like cemented container where breeding of fishes or transmission lines which this Court has recently declared in Manila
crustaceans is done, are considered immovable Electric Company v. City Assessor and City Treasurer of Lucena
property if the owner of the land or tenement City, as "no longer exempted from real property tax" and may
intended them to be permanent. qualify as "machinery" subject to real property tax under the Local
- The animals in the animal houses, the pigeons in the Government Code. To the extent that the equipment's location is
pigeon houses, the bees in the beehives, the fish in determinable to be within the taxing authority's jurisdiction, the
Court sees no reason to distinguish between submarine cables
the fishponds are included and considered part of the
used for communications and aerial or underground wires or lines
immovable property. used for electric transmission, so that both pieces of property do

PROPERTY, OWNERSHIP AND ITS MODIFICATION 7

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

MOVABLE PROPERTY:
not merit a different treatment in the aspect of real property
taxation. Both electric lines and communications cables, in the - These are properties that can be transferred from one
strictest sense, are not directly adhered to the soil but pass through place to another without being destroyed. (Pineda
posts, relays or landing stations, but both may be classified under (2009), p.19)
the term "machinery" as real property under Article 415(5) of the
Civil Code for the simple reason that such pieces of equipment WHAT ARE MOVABLE PROPERTIES?
serve the owner's business or tend to meet the needs of his 1. Those movables susceptible of appropriation which
industry or works that are on real estate. Even objects in or on a are not included in the preceding article (Art. 416(1),
body of water may be classified as such, as "waters" is classified
NCC);
as an immovable under Article 415(8)39 of the Code. A classic
example is a boathouse which, by its nature, is a vessel and, 2. Real property which by any special provision of law is
therefore, a personal property but, if it is tied to the shore and used considered as personalty (Art. 416(2), NCC);
as a residence, and since it floats on waters which is immovable, is 3. Forces of nature which are brought under control by
considered real property. Besides, the Court has already held that science (Art. 416(3), NCC);
"it is a familiar phenomenon to see things classed as real property 4. In general, all things which can be transported from
for purposes of taxation which on general principle might be place to place without impairment of the real property
considered personal property.” to which they are fixed (Art. 416(4), NCC);
5. Obligations and actions which have for their object
Thus, absent any showing from Capwire of any express grant of an
exemption for its lines and cables from real property taxation, then movables or demandable sums (Art. 417 (a), NCC);
this interpretation applies and Capwire's submarine cable may be and
held subject to real property tax. 6. Shares of stock of agricultural, commercial and
industrial entities, although they may have real estate
(Art. 417(b), NCC);
Paragraph 9: 7. Consumable or those movables which cannot be
DOCKS AND STRUCTURES WHICH, THOUGH used in a manner appropriate to their nature without
FLOATING, ARE INTENDED BY THEIR NATURE AND their being consumed (Art. 418, NCC); or
OBJECT TO REMAIN AT A FIXED PLACE ON A RIVER, 8. Non-Consumable. (Art. 418, NCC)
LAKE OR COAST.
Art. 416, par. 1, NCC:
NOTES: THOSE MOVABLES SUSCEPTIBLE OF APPROPRIATION
- Docks are wharves or platforms for the loading, or WHICH ARE NOT
unloading of materials in a vessel or ship. Though INCLUDED IN ART. 415, NCC
floating in water, they are intended to be stationary.
They are real property by destination. NOTES:
- These are movables that are not included in the 10
Paragraph 10: enumerations under Art. 415, NCC but are
CONTRACTS FOR PUBLIC WORKS, AND SERVITUDES susceptible of appropriation. Hence, they are
AND OTHER REAL RIGHTS OVER IMMOVABLE considered personal or movable property.
PROPERTY - Example: Car; Clothes; jewelry.

IMMOVABLE BY ANALOGY: Art. 416, par. 2, NCC:

- These properties refer to contracts for public works, REAL PROPERTY WHICH BY ANY SPECIAL PROVISION
servitudes and real rights over immovable property OF LAW IS CONSIDERED AS PERSONALTY
(like usufruct). They are inseparable from their
sources which are immovables. Therefore, for NOTES:
convenience, they are considered immovables by - There are cases when the property is essentially
analogy because they have the characteristics of a immovable but by express provision of law, it is
real property. considered as movable or personal property.
- Real estate mortgages are realty and not personalty. - Growing crops are real property under Art. 415, par.
(Hongkong and Shanghai Bank vs. Aldecoa & Co., 30 2, NCC, but they are considered as personal property
Phil. 255) for purposes of the chattel mortgage law (Avt no.
1508). (Sibal vs. 50 Phil. 512)
SUGAR QUOTAS:
- These are considered immovables, just like
servitudes, because they are inseparable therefrom Art. 416, par. 3, NCC:
and are real rights over immovable property. (Sec. 9, FORCES OF NATURE WHICH ARE BROUGHT UNDER
Act no. 4166). CONTROL BY SCIENCE
- Being a realty, a levy on sugar quota should comply
with Sec. 14, Rule 39, ROC. (Prebistero vs.
NOTES:
Fernandez, 117 Phil. 636)
- There are some forces of nature which could be
controlled by man through the application of
MOVABLE PROPERTY scientific devices or means. When controlled, they
are considered personal property.
- Example: Electricity generated by electric powers;
CIVIL CODE PROVISIONS: Sunlight used for generating heat and fuel for
- Articles 416 to 418 of the New Civil Code governs cooking; Solar Light for powering batteries.
movable or personal property.

8 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

“STOCKS” UNDER CIVIL CODE IS DIFFERENT FROM
US vs. CARLOS
21 Phil. 553 STOCKS UNDER THE CORPORATION CODE:
- The word “stock” under Art. 417, NCC, should be
FACTS: The accused was charged with theft for diverting electric read in its generic sense to mean “participation” and
power for his use through a “jumper”. He put up the defense that not in its technical terms as defined in the
electricity is an unknown power, not a fluid, not tangible, and could Corporation Code.
not be the object of theft. - A one-half interest in business (drugstore business)
not included in Art. 415 is personal property and can
RULING: Accused is guilty of theft. It is true that electricity is no
be the object of chattel mortgage. (Involuntary
longer, as formerly, regarded by electricians as a fluid, but its
manifestations and effects, like those of gas, may be seen and felt.
Insolvency of Strochecker vs. Ramirez, 44 Phil. 993).
The true test of what is a proper subject of larceny seems to be not NOTE: If the interest is in a land or building, that interest
whether the subject is corporeal or incorporeal, but whether it is is real right in a real property and is by itself real property
capable of appropriation by another than the owner. by analogy. (Art. 415, par. 10, NCC)

Art, 416, par. 4, NCC: Art. 418, NCC:

IN GENERAL, ALL THINGS WHICH CAN BE CONSUMABLE OR NON-CONSUMABLE MOVABLE
TRANSPORTED FROM PLACE TO PLACE WITHOUT PROPERTY
IMPAIRMENT OF THE REAL
PROPERTY TO WHICH THEY ARE FIXED
CONSUMABLE NON-CONSUMABLE
TRANSPORTABLE THINGS:
- Generally, all things which can be transported from Cannot be used according Can be used according to
place to place without impairing the immovable to to its nature without being its nature without being
which they are attached are personal property. consumed or being eaten or consumed or being eaten or
- Examples: Machines not fixed to the land; used up. used up.
Implements and tools of workers (eg. Saw, hammer,
plow, jack, etc.) Ex. A glass of wine; Battery Ex. Eyeglasses. Watch clock

SPECIAL KIND OF PERSONAL PROPERTY:

- The author, composer, painter, sculptor, inventor FUNGIBLES NON-FUNGIBLES
have the rights over their works. These rights are
personal property. Properties which can be Properties which cannot be
substituted or replaced by substituted or replaced by
an equal quantity and same specie because they
Art. 417, NCC: quality. must be returned.

BASIS OF ART. 417, NCC: HOW TO DETERMINE WHETHER PROPERTY IS

- Incomes or annuities, either for life or hereditary, FUNGIBLE OR NON-FUNGIBLE?
payable to any person or family provided they do not - It is determined by the agreement of the parties and
burden immovable property with a real encumbrance, not on the consumability of the thing.
alienated offices, contracts for public services, and
certificates or securities representing mortgage BUSINESS OF PROVIDING TELECOMMUNICATION OR
loans, are also considered movable property. (Art. TELEPHONE SERVICE IS PERSONAL PROPERTY:
336, French Civil Code, Tolentino, Book II) - The business of providing telecommunication or
telephone service is also a personal property which
OBLIGATIONS AND ACTIONS; MEANING: can be the object of theft under Art. 308 of the
- These refers to the right to recover movables and Revised Penal Code.
demandable sums of money. - Interest in business is declared personal property
since it is capable of appropriation and not included
DEMANDABLE SUMS: in the enumeration of real properties. (Laurel vs.
- Refers to matured credits. Abrogar, 576 SCRA 41)
- If the credit is not yet due, it has not reached the
stage of being a personality.
- The right to collect a sum of money is by itself a PROPERTY IN RELATION TO WHOM IT BELONGS
personal property.

SHARES OF STOCKS: PROPERTY OF PUBLIC DOMINION

- Art. 417, par. 2, NCC, applies only to stock
corporations engaged in agriculture, commerce or
industry. However, there is no valid reason to exclude PROPERTY OF PUBLIC DOMINIUM:
other juridical persons from its coverage like the - Refers to the property of the State in its public
partners’ interests in a partnership and shares of capacity. Such properties are those intended for
stocks in other corporations which may be engaged public use, for some public service, or for the
in other endeavors outside those mentioned in law. development of national wealth. (Art. 420, NCC)
Such interests are personal property. (Collector vs.
Angelo california National Bank, 57 OG 3719) CONCEPT OF DOMINIUM:
- This is the capacity of the State to own or acquire
property. This is reference to the lands held by the

PROPERTY, OWNERSHIP AND ITS MODIFICATION 9

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

State in its proprietary character. In such capacity, it
exceeding twenty-five years, renewable for not more than twenty-
may provide for the exploitation and use of lands and five years, and not to exceed one thousand hectares in area.
other natural resources, including their disposition, Citizens of the Philippines may lease not more than five hundred
except as limited by the Constitution. (Lee Hong Hok hectares, or acquire not more than twelve hectares thereof, by
vs. David, 48 SCRA 377) purchase, homestead, or grant.

KINDS OF PROPERTY OF PUBLIC DOMINION: Taking into account the requirements of conservation, ecology, and
1. Those for Public Use: development, and subject to the requirements of agrarian reform,
the Congress shall determine, by law, the size of lands of the public
- Roads, bridges, ports, canals constructed
domain which may be acquired, developed, held, or leased and the
by the State, rivers torrents and similar other conditions therefor.
which could be used by everyone including
foreigners in the country. NOTE: Forest lands or reserves are not capable of appropriation, and
2. Those for Public Service: possession thereof, however long, cannot convert them into private
property. (De La Cruz vs. CA, 286 SCRA 230)
- State buildings, firearms used by the police
and military officers, government vehicles
PROPERTY FOR PUBLIC USE, AND PROPERTY FALLING
for use of certain public officials, battleships.
WITHIN THE MEANING OF “AND OTHERS OF SIMILAR
Only authorized personnel of the
CHARACTER”:
Government may use them.
1. Creeks which are no other than extending arms from
3. Those for the Development of the National
a river. (They are not subject to private appropriation
Wealth:
and acquisitive prescription);
- Forest lands, timberlands, mineral lands.
2. Natural beds of rivers;
3. Public streams which are rivers;
CONSTITUTIONAL PROVISION REGARDING FOREST
4. Waters of rivers;
LANDS AND OTHER NATURAL RESOURCES:
5. River channels
ARTICLE XII, 1987 CONSTITUTION 6. Natural lakes and lagoons;
(NATIONAL PATRIMONY) 7. Waters in swamps and marshes;
8. Lands reclaimed from the sea by the Government;
Section 2. All lands of the public domain, waters, minerals, coal, 9. Lands subject of “Natural Expropriation” which
petroleum, and other mineral oils, all forces of potential energy,
occurs when private lands had been invaded by the
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
moving waters or waves of the sea and converted
agricultural lands, all other natural resources shall not be alienated. into portions of the shore or beach;
The exploration, development, and utilization of natural resources 10. Streets, even if the putting of telephone posts and
shall be under the full control and supervision of the State. The planting of coconuts on the sides have been
State may directly undertake such activities, or it may enter into co- tolerated. (Sources: Mercado vs. Municipal President
production, joint venture, or production-sharing agreements with of Macabebe, 59 Phil. 592; Celestial vs. Cachopero,
Filipino citizens, or corporations or associations at least 60 per 413 SCRA 469; Meneses vs. Commonwealth, 59 Phil.
centum of whose capital is owned by such citizens. Such
647; Republic vs. CA, 132 SCRA 514; Montano vs.
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such Insular Government, 12 Phil. 572; PD 1067;
terms and conditions as may provided by law. In cases of water Government vs. Cabangis, 53 Phil. 112; Natividad vs.
rights for irrigation, water supply, fisheries, or industrial uses other Director of Lands, 37 OG. 2905)
than the development of waterpower, beneficial use may be the
measure and limit of the grant.
MANILA INTERNATIONAL AIRPORT AUTHORITY vs. CA
The State shall protect the nations marine wealth in its archipelagic GR no. 155650, July 20, 2006
waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens. No one can dispute that properties of public dominion mentioned in
Article 420 of the Civil Code, like "roads, canals, rivers, torrents,
The Congress may, by law, allow small-scale utilization of natural ports and bridges constructed by the State," are owned by the
resources by Filipino citizens, as well as cooperative fish farming, State. The term "ports" includes seaports and airports. The
with priority to subsistence fishermen and fish workers in rivers, MIAA Airport Lands and Buildings constitute a "port" constructed
lakes, bays, and lagoons. by the State. Under Article 420 of the Civil Code, the MIAA Airport
Lands and Buildings are properties of public dominion and thus
The President may enter into agreements with foreign-owned owned by the State or the Republic of the Philippines.
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals, Property of public dominion, being outside the commerce of man,
petroleum, and other mineral oils according to the general terms cannot be the subject of an auction sale. Any encumbrance, levy
and conditions provided by law, based on real contributions to the on execution or auction sale of any property of public dominion is
economic growth and general welfare of the country. In such void for being contrary to public policy.
agreements, the State shall promote the development and use of
local scientific and technical resources. The Airport Lands and Buildings of MIAA, as properties of public
dominion, are outside the commerce of man.
The President shall notify the Congress of every contract entered
into in accordance with this provision, within thirty days from its
execution. PROPERTY FOR PUBLIC SERVICE:
- All public buildings constructed by the State for its
Section 3. Lands of the public domain are classified into officers and functionaries belong to this class.
agricultural, forest or timber, mineral lands and national parks. (Baguio Citizens Action vs. City Council, 121 SCRA
Agricultural lands of the public domain may be further classified by 368). NOTE: this may cover immovable and movable
law according to the uses to which they may be devoted. Alienable property.
lands of the public domain shall be limited to agricultural lands.
Private corporations or associations may not hold such alienable
lands of the public domain except by lease, for a period not

10 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

PROPERTY “OUTSIDE THE COMMERCE OF MAN”; - All other property of the State, which is not of the
MEANING: character stated in the preceding article, is
- It means that it cannot be the subject of negotiations patrimonial property. (Art. 421, NCC)
for contract purposes. (Municipality of Cavite vs. - Property of public dominion, when no longer
Rojas, 30 Phil. 20 intended for public use or for public service, shall
- It cannot be the subject of writs of attachment and form part of the patrimonial property of the State.
execution. (Tan Toco vs. Municipal Council of Iloilo, (Art. 422, NCC)
49 Phil. 52)
- It cannot be acquired by prescription against the MEANING OF PATRIMONIAL PROPERTY:
State. (Harty vs. Municipality of Victoria, 13 Phil. 152) - A property of the State which is not intended for
public use, public service, or for the development of
the national wealth.
LAUREL vs. GARCIA
- It is intended for the attainment of the economic ends
GR nos. 92013, 92047, July 25, 1990
of the State, that is, for its subsistence.
FACTS: The Roppongi property was acquired from the Japanese - A patrimonial property is a private property of the
government under the Second Year Schedule and listed under the State. it is owned in its private and not public
heading "Government Sector", through Reparations Contract No. capacity. Therefore, it can be subject to prescription
300 dated June 27, 1958. The Roppongi property consists of the under Art. 1113, NCC, and it can be the object of
land and building "for the Chancery of the Philippine Embassy" ordinary contracts or agreements.
(Annex M-D to Memorandum for Petitioner, p. 503). As intended, it - Possession of patrimonial property of the
became the site of the Philippine Embassy until the latter was
Government, regardless of time period, cannot ipso
transferred to Nampeidai on July 22, 1976 when the Roppongi
building needed major repairs. Due to the failure of our government facto ripen into ownership. (Alonso vs. Cebu Country
to provide necessary funds, the Roppongi property has remained Club, 417 SCRA 115)
undeveloped since that time.
EXAMPLES OF PATRIMONIAL PROPERTY OF THE STATE:
Amidst opposition by various sectors, the Executive branch of the 1. Friar lands under Act no. 1120. They are intended to
government has been pushing, with great vigor, its decision to sell be sold to actual settlers and occupants. (Jancinto
the reparations properties starting with the Roppongi lot. The vs. Director of Lands, 49 Phil. 853);
property has twice been set for bidding at a minimum floor price of
2. Fortresses after ceasing to be for public service
$225 million. The first bidding was a failure since only one bidder
qualified. The second one, after postponements, has not yet become property of the state. (Municipality of
materialized. The last scheduled bidding on February 21, 1990 was Hinunangan vs. 125);
restrained by his Court. Later, the rules on bidding were changed 3. Property acquired in escheat proceedings, execution
such that the $225 million floor price became merely a suggested sales, tax sales and incomes of the State derived
floor price. from its properties or businesses;
4. Public lands after the same had been declared
ISSUES: available for alienation or disposition. (Montano vs.
1. Can the Roppongi property and others of its kind be
Insular Government, 12 Phil. 572);
alienated by the Philippine Government?
2. Does the Chief Executive, her officers and agent, have 5. An abandoned road withdrew from public use. (Cebu
the authority and jurisdiction, to sell the Roppongi Oxygen vs. bercilles, 66 SCRA 481);
property? 6. money or assets donated to the State.

RULING: The Roppongi property is correctly classified under HOW IS A PROPERTY OF PUBLIC DOMINION
paragraph 2 of Article 420 of the Civil Code as property belonging CONVERTED INTO A PATRIMONIAL PROPERTY?
to the State and intended for some public service. - When no longer intended or operated for public use
Has the intention of the government regarding the use of the
or public service, a property of public dominion shall
property been changed because the lot has been Idle for some form of the State’s patrimonial property as of the
years? Has it become patrimonial? date the Government, through the Executive or
Legislative Departments, has formally declared that it
The fact that the Roppongi site has not been used for a long time is no longer needed for said purposes. (Ignacio vs.
for actual Embassy service does not automatically convert it to Director of Land, 58 OG 2403; Cebu Oxygen vs.
patrimonial property. Any such conversion happens only if the Bercilles, 66 SCRA 481)
property is withdrawn from public use (Cebu Oxygen and Acetylene - If there is no declaration, the property continues to
Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be
part of the public domain, not available for private appropriation or
form part of the public domain and cannot be the of
ownership until there is a formal declaration on the part of the acquisitive prescription. (Ignacio vs. Directors of
government to withdraw it from being such (Ignacio v. Director of Lands, Supra)
Lands, 108 Phil. 335 [1960]). - A land which used to be a part of a military
reservation has to be declared as alienable property
Assuming for the sake of argument, however, that the Roppongi in order that it may be an object of private ownership.
property is no longer of public dominion, there is another obstacle (Republic vs. Mendoza, 155 SCRA 412)
to its sale by the respondents. - A local government cannot withdraw a public street
There is no law authorizing its conveyance.
from public use unless it has been granted such
authority by law. (Unson vs. Lacson, 100 Phil. 695)

CASES WHEN A PROPERTY OF PUBLIC DOMINION

PATRIMONIAL PROPERTY OF THE STATE:
BECOMES A PRIVATE PROPERTY WITHOUT ANY
EXECUTIVE OR LEGISLATIVE DECLARATION:
CIVIL CODE PROVISIONS: ● in cases of abandoned river beds caused by a
change in the course of a river. (Art. 461, NCC)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 11

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

● In the cases of Municipality of Oas vs. Roa (7 Phil.
20), and Municipality of Hinunangan vs. Director of PROPERTIES DEVOTED TO PUBLIC USE ARE PRESUMED
Lands (24 Phil. 125), wherein there was no formal TO BELONG TO THE STATE; LOCAL GOVERNMENTS
declaration of conversion by the Executive or CANNOT USURP THEM:
Legislative Departments, yet, the conversion to - Properties for public use (streets, alleys, and parks)
patrimonial property of a public plaza and a fortress cannot just be usurped or taken by local
had been recognized. governments as their patrimonial property without
any grant from the National Government. (Mun. of
Tigbauan vs. Director of Lands, 35 Phil. 584)
- Local governments cannot withdrew a plaza or an
PROPERTY OF PROVINCES, CITIES, alley from public use and declare the same as
AND MUNICIPALITIES: patrimonial property without specific grant from the
Congress. (Unson vs. Lacson, 100 Phil. 695)
CIVIL CODE PROVISIONS:
- The property of provinces, cities, and municipalities
is divided into property for public use and patrimonial
PROPERTY OF PRIVATE OWNERSHIP:
property. (Art. 423, NCC);
- Property for public use, in the provinces, cities, and
municipalities, consist of the provincial roads, city CIVIL CODE PROVISION:
streets, municipal streets, the squares, fountains, - Property of private ownership, besides the
public waters, promenades, and public works for patrimonial property of the State, provinces, cities,
public service paid for by said provinces, cities, or and municipalities, consists of all property belonging
municipalities. All other property possessed by any of to private persons, either individually or collectively.
them is patrimonial and shall be governed by this (Art. 425, NCC)
Code, without prejudice to the provisions of special
laws. (Art. 424, NCC) PRIVATE OWNERSHIP OF PRIVATE PERSONS OR
ENTITIES:
CLASSES OF PROPERTY OF POLITICAL SUBDIVISIONS - All properties not belonging to the State or to its
OF THE STATE: political subdivisions are properties of private
ownership pertaining to private persons. (Art. 425,
PROPERTY FOR PUBLIC PATRIMONIAL PROPERTY
NCC)
USE

Consists of provincial roads, Consists of all other property COLLECTIVE OWNERSHIP; MEANING:
city streets, municipal streets, without prejudice to special - Refers to co-ownership of property, or to ownership
squares, fountains, public laws. of stockholders in corporation, or of partners in
waters, promenades, and public partnerships, and other juridical persons, or co-
works for public service. ownership of communal or conjugal property in
marriage. (Pineda (2009), p. 40)
Additional Notes:
CONFLICTING CLAIMS OF OWNERSHIP BETWEEN
- There is not mention of property for public service
PRIVATE PERSONS AND THE STATE OR ITS POLITICAL
because such properties are considered public
property of the political subdivisions and they are SUBDIVISIONS:
included in the term property for public use being - if a private person claims ownership over a property
“public works for public service”. (Zamboanga Del which the State or its political subdivision also
Norte vs. City of Zamboanga, GR no. L-24440, March claims, the rules of evidence shall govern. If the
28, 1968) private person can prove his ownership with clear,
- in the classification of properties of the State or strong and convincing evidence, and the State or its
political subdivisions under the Civil Code and under political subdivision could not show any superior right
the Law on Municipal Corporation, should there be over the property, the former must be recognized as
any resulting incongruity, the latter (Law on Municipal the owner as against the latter. (Pascual vs. Angeles,
Corporation) shall prevail. (Zamboanga Del Norte vs. 13 Phil. 441)
City of Zamboanga, Supra)
PRIVATE OWNERSHIP OF LANDS ARE PROHIBITED TO
RULES REGARDING PROPERTY OF PUBLIC DOMINION FOREIGNERS:
OF THE STATE ARE APPLICABLE TO PROPERTY OF - Aliens have no right to acquire any public or private
SAME NATURE OF ITS POLITICAL SUBDIVISIONS: agricultural, commercial, or residential lands, even if
it is a religious and non-stock corporation, except by
- Property for public use in the provinces, cities and
hereditary succession. (Krivenko vs. Register of
municipalities (towns) are governed by the same rules
Deeds, 44 OG 471; Ung Siu Temple vs. Register of
as property of public dominion of same character.
Therefore, property fir public use of political Deeds, 97 Phil. 58)
- A foreign-owned corporation cannot be the
subdivisions are outside the commerce of man; it
transferee of a land in the Philippines even
cannot be be the subject to ordinary contracts; it
temporarily.
cannot be donated nor be attached or levied upon on
execution. (Tan Toco vs. Municipality of Iloilo, 49 Phil.
52; Municipality of Cavite vs. Roojas, 30 Phil. 602; REGISTER OF DEEDS vs. CHINA BANKING CORP.
Harty vs. Municipality of Victoria, 13 Phil. 152) GR no. L-11964, April 28, 1962
- Patrimonial property is within the commerce of man.
(Mendozza vs De Leon, 33 Phil. 508) FACTS: Sps. Pangilinan executed a Deed of Transfer covering a

12 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

parcel of land in favor of the China Banking Corporation. The deed shall recognize the title of the concerned ICCs/IPs over the
is intended to settle the civil liability of Alfonso Pangilinan which territories identified and delineated.
arose from a crime (qualified theft). the Register of Deeds refused
to register the Deed because of the constitutional provision Like a torrens title, a CADT is evidence of private ownership of land
prohibiting foreign corporations from acquiring lands in the by native title. Native title, however, is a right of private ownership
Philippines. peculiarly granted to ICCs/IPs over their ancestral lands and
domains. The IPRA categorically declares ancestral lands and
ISSUE: W/N China bank can acquire ownership of the land. domains held by native title as never to have been public land.
Domains and lands held under native title are, therefore,
RULING: That the constitutional prohibition under consideration indisputably presumed to have never been public lands and are
has for its purpose the preservation of the patrimony of the nation private.
can not be denied, but appellant and the amici curiae claim that it
should be liberally construed so that the prohibition be limited to
the permanent acquisition of real estate by aliens — whether THE TRANSFER OF A LAND TO AN ALIEN IS VALIDATED
natural or juridical persons. This, of course, would make legal the WHEN PROPERTY IS SOLD TO A FILIPINO CITIZEN:
ownership acquired by appellant bank by virtue of the deed of
transfer mentioned heretofore, subject to its obligation to dispose HALILI vs. CA
of it in accordance with law, within 5 years from the date of its GR no. 113539, March 12, 1998
acquisition. We can not give assent to this contention, in view of
the fact that the constitutional prohibition in question is absolute in The landmark case of Krivenko vs. Register of Deeds settled the
terms. issue as to who are qualified (and disqualified) to own public as well
as private lands in the Philippines.

EXCEPTION TO THE RULE THAT “PRIVATE OWNERSHIP The Krivenko rule was recently reiterated in Ong Ching Po vs. Court
OF LANDS ARE PROHIBITED TO FOREIGNERS”; 1987 of Appeals, which involves a sale of land to a Chinese citizen. The
Court said:
CONSTITUTIONAL PROVISION:
”The capacity to acquire private land is made dependent
- Save in cases of hereditary succession, no private upon the capacity to acquire or hold lands of the public
lands shall be transferred or conveyed except to domain. Private land may be transferred or conveyed
individuals, corporations, or associations qualified to only to individuals or entities qualified to acquire lands of
acquire or hold lands of the public domain. (Sec. 7, the public domain (II Bernas, The Constitution of the
Art. XII, Constitution) Philippines 439-440 [1988 ed.]).
- Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who The 1935 Constitution reserved the right to participate in
the disposition, exploitation, development and utilization
has lost his Philippine citizenship may be a transferee
of all lands of the public domain and other natural
of private lands, subject to limitations provided by resources of the Philippines for Filipino citizens or
law. (Sec. 8, Art. XII, Constitution) corporations at least sixty percent of the capital of which
was owned by Filipinos. Aliens, whether individuals or
REGALIAN DOCTRINE: corporations, have been disqualified from acquiring
- General Rule: public lands; hence, they have also been disqualified
- All lands not otherwise appearing to be from acquiring private lands.
clearly within private ownership are
In fine, non-Filipinos cannot acquire or hold title to private lands or
presumed to belong to the State. (Director
to lands of the public domain, except only by way of legal
of Lands vs. IAC, 219 SCRA 339) succession.
- All mines underneath any land and all
natural resources belong to the State. But what is the effect of a subsequent sale by the disqualified alien
(Pinero, Jr. vs. Director of Lands, 57 SCRA vendee to a qualified Filipino citizen? This is not a novel question.
391) Jurisprudence is consistent that if land is invalidly transferred to an
- Exception: Lands covered by the Indigenous alien who subsequently becomes a citizen or transfers it to a
Peoples Rights Act (IPRA) are exceptions to the citizen, the flaw in the original transaction is considered cured and
the title of the transferee is rendered valid.
Regalian Doctrine.
Thus, in United Church Board of World Ministries vs. Sebastian, in
LANDS COVERED BY “NATIVE TITLE” DO NOT FORM which an alien resident who owned properties in the Philippines
PART OF THE PUBLIC DOMAIN: devised to an American non-stock corporation part of his shares of
stock in a Filipino corporation that owned a tract of land in Davao
CRUZ vs. SECRETARY OF ENVIRONMENT del Norte, the Court sustained the invalidity of such legacy.
AND NATURAL RESOURCES However, upon proof that ownership of the American corporation
GR no. 135385, December 6, 2000 has passed on to a 100 percent Filipino corporation, the Court
ruled that the defect in the will was rectified by the subsequent
Native Title- refers to pre-conquest rights to lands and domains transfer of the property.
which, as far back as memory reaches, have been held under a
claim of private ownership by ICCs/IPs, have never been public The present case is similar to De Castro vs. Tan. In that case, a
lands and are thus indisputably presumed to have been held that residential lot was sold to a Chinese. Upon his death, his widow
way since before the Spanish Conquest.” and children executed an extrajudicial settlement, whereby said lot
was allotted to one of his sons who became a naturalized Filipino.
Native title refers to ICCs/IPs' pre-conquest rights to lands and The Court did not allow the original vendor to have the sale
domains held under a claim of private ownership as far back as annulled and to recover the property, for the reason that the land
memory reaches. These lands are deemed never to have been has since become the property of a naturalized Filipino citizen who
public lands and are indisputably presumed to have been held that is constitutionally qualified to own land.
way since before the Spanish Conquest. The rights of ICCs/IPs to
their ancestral domains (which also include ancestral lands) by
virtue of native title shall be recognized and respected. Formal FORMER FILIPINO CITIZENS (OR BALIKBAYANS) MAY
recognition, when solicited by ICCs/IPs concerned, shall be NOW BE TRANSFEREES OF LANDS IN THE PHILIPPINES:
embodied in a Certificate of Ancestral Domain Title (CADT), which

PROPERTY, OWNERSHIP AND ITS MODIFICATION 13

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Under RA 8179, Foreigners who were former Filipino
citizens may now acquire lands in the Philippines. DEFINITION OF OWNERSHIP:
- It is the juridical relation of a person over a thing by
FOREIGN INVESTMENTS ACT OF 1991
(RA 7042)
virtue of which said person has the exclusive power
or authority to receive all the benefits and advantages
Any natural born citizen who has lost his Philippine arising from said thing, save those restricted by law
citizenship and who has the legal capacity to enter into a or by the recognized rights of others. (Pineda (2009),
contract under Philippine laws may be a transferee of a p. 48)
private land up to a maximum area of five thousand
(5,000) square meters in the case of urban land or three CHARACTERISTICS OF OWNERSHIP:
(3) hectares in the case of rural land to be used by him for
- By virtue of ownership, a thing pertaining to one
business or other purposes. In the case of married
couples, one of them may avail of the privilege herein person is completely subjected to his will in
granted: Provided, That if both shall avail of the same, everything not prohibited by public law or the
the total area acquired shall not exceed the maximum concurrence with the rights of another. (Garcia vs.
herein fixed. Ramos, CA-CV-05709, March 13, 1986)

In the case the transferee already owns urban or rural SUBJECT MATTER OF OWNERSHIP:
land for business or other purposes, he shall still be
entitled to be a transferee of additional urban or rural land “THING” “RIGHT”
for business or other purposes which when added to
those already owned by him shall not exceed the Any material object usually Incorporeal property; Real or
maximum areas herein authorized.
refers to corporeal property. Personal Rights
A transferee under this Act may acquire not more than Source: De Leon (2011), p. 77
two (2) lots which should be situated in different
municipalities or cities anywhere in the Philippines:
Provided, That the total land area thereof shall not Rights Included in Ownership
exceed five thousand (5,000) square meters in the case
of urban land or three (3) hectares in the case of rural
land for use by him for business or other purposes. A CIVIL CODE PROVISION:
transferee who has already acquired urban land shall be - The owner has the right to enjoy and dispose of a
disqualified from acquiring rural land and vice versa”. thing, without other limitations than those established
(Sec. 10, RA 7042, which amended RA 9179) by law. The owner has also a right of action against
the holder and possession of the thing in order to
recover it. (Art. 428, NCC)

PROVISIONS COMMON TO Note: Right of ownership is not absolute as it is subject to certain

THE THREE PRECEDING CHAPTERS limitations or restriction based on the principle that the”welfare of
(Immovable Property, Movable Property, and Property in the people is the supreme law”, and the owner cannot use his
Relations to the Person to Whom it Belongs): property in a manner that will injure the rights of third persons.

Article 426, NCC:

RIGHTS INCLUDED IN OWNERSHIP:
- Whenever by provision of the law, or an individual
1. Jus Utendi (Right to use);
declaration, the expression "immovable things or 2. Jus Fruendi (Right to enjoy or receive the fruits);
property," or "movable things or property," is used, it
3. Jus Disponendi (Right to dispose);
shall be deemed to include, respectively, the things
4. Jus Vindicandi (Right to vindicate or recover);
enumerated in Chapter 1 and Chapter 2.
5. Jus Abutendi (Right to abuse);
- Whenever the word "muebles," or "furniture," is used 6. Right to Exclude (Art. 429, NCC); and
alone, it shall not be deemed to include money,
7. Right to enclose (Art. 430, NCC)
credits, commercial securities, stocks and bonds,
jewelry, scientific or artistic collections, books,
COVERAGE OF ART. 428, NCC:
medals, arms, clothing, horses or carriages and their
1. Right to enjoy a thing;
accessories, grains, liquids and merchandise, or
- Consist not only the right to collect the rents
other things which do not have as their principal
or fruits but also the right to use and utilize
object the furnishing or ornamenting of a building,
the same according to its natural
except where from the context of the law, or the
destination. (Marcos vs. Endencia, 38 OG.
individual declaration, the contrary clearly appears.
855)
- An owner cannot be deprived of his right to
Title II - OWNERSHIP enjoy his property on the pretext that
another person or entity needs it more
because of an emergency. the plea of the
CONCEPT OF OWNERSHIP occupant that he would suffer great
damages if he moves out or it is difficult for
him to find another place can not be entered
Characteristics of Ownership to defeat the right of the owner to get the
possession of his property so he could enjoy
and use it. (Villanueva vs. Canlas, 75 Phil.
CONCEPT OF OWNERSHIP: 381)
- Ownership may be exercised over things or rights. 2. Right to dispose of a thing;
(Art. 427, NCC)

14 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Power of the property owner to sell, donate,
alienate and encumber his property. This POWER OF TAXATION:
right includes the power to destroy subject - This is the power of the State to raise revenue to
to the restrictions imposed by law. defray the necessary governmental expenses for
3. Right to recover a thing: 1
public purpose. (Gruen vs. State Tax Commission,
- Right of an owner to recover the possession 211 Pac. 2d, 6511; Pineda (2009), p. 57)
of his property which is unlawfully taken or - Through taxation, the governed who enjoy the
withheld from him by another. benefits of protection to their lives, liberty and
- This right to recovery is given by the law property must bear the financial burdens of the
only to the owner. However, the owner may government. Therefore, real and personal property
transfer this right to another person who may be taxed, and sold for non-payment of taxes.
then can maintain the action against the Hence, taxation is a limitation on ownership.
wrongdoer. (Waite vs. Peterson, 8 Phil. 449)
- Every possessor has a right to be respected
Eminent Domain
in his possession; and should he be
disturbed therein he shall be protected in or
restored to said possession by the means CONCEPT OF EMINENT DOMAIN:
established by the laws and the Rules of - This is the right of the State to acquire private
Court. (Art. 539, NCC) property for public use upon payment of just
compensation. It is one of the limitations on the right
LIMITATION ON THE RIGHT OF OWNERSHIP: of ownership in the pursuit of public interest.
1. Those imposed by the State: However, it cannot be exercised capriciously or
a. Police power arbitrarily. (De Knect vs. Bautista, 100 SCRA 660)
b. Power of Taxation - An order of expropriation merely determines the
c. Power of Eminent Domain authority to exercise the power of eminent domain
2. Those imposed by law such as legal easement: and the propriety of such exercise, its issuance does
a. Easement relating to waters; not hinge on the payment of just compensation.
b. Right of way; (Lintag vs. National Power Corporation, 528 SCRA
c. Party Wall; 287)
d. Light and view;
e. Drainage; DEFINITION OF EMINENT DOMAIN:
f. Intermediate distances; - It is the power of the nation or a sovereign state to
g. Easement against nuisance; take, or to authorize the taking of, private property for
h. Lateral and subjacent support; a public use without the owner’s consent,
3. Those imposed by the owner; conditioned upon payment upon payment of just
- Such as when the owner leased the property compensation.
or pledged it to another. Meantime, he has
to be deprived of his possession.
4. Those imposed by the grantor: EMINENT
EXPROPRIATION SALE
- Such as when a donor devised a property DOMAIN
subject to the condition that it shall not be
partitioned for220 years. (Art. 1083, NCC) Power of the Procedure by which Voluntary
State to acquire the property is transaction
POLICE POWER: the property acquire which is by
- This limits ownership in the sense that a property involuntary sale of
may be interfered with, even destroyed, if so property
demanded by the welfare of the community. Source: Noble vs. City of Manila, 38 OG. 2270)
(Pampanga Bus Co., vs. Municipality of Tarlac, 3
SCRA 816) CONSTITUTIONAL PROVISIONS ON EMINENT DOMAIN:
- When a property is impaired by police power, the 1. “No person shall be deprived of life, liberty, or
owner is not entitled to compensation. (US vs. property without due process of law, nor shall any
Toribio, 15 Phil. 85) person be denied the equal protection of the laws.”
- Examples: (Sec. 1, Art. III, 1987 Constitution)
a. Removal of billboards offensive to sight; 2. “Private property shall not be taken for public use
b. Prohibition of sale of fresh meat outside without just compensation.” (Sec. 9, Art. III, 1987
public market; Constitution)
c. The regulation of killing, for human
consumption of large cattle still fit for work; CIVIL CODE PROVISIONS ON EMINENT DOMAIN:
d. Abatement of nuisances; a. “No person shall be deprived of his property except
e. Regulation of interest rates and prohibit by competent authority and for public use and always
usury in ay form; upon payment of just compensation. Should this
f. Enactment of the SSS Law. (Churchill vs, requirement be not first complied with, the courts
Rafferty, 32 Phil. 580; Co Kiam vs. City of shall protect and, in a proper case, restore the owner
Manila, 96 Phil. 649; US vs. Torbio, Supra; in his possession.” (Art. 435,NCC)
Ilo-ilo Cold Storage vs. Council of Iloilo, 24 b. “When any property is condemned or seized by
Phil. 471) competent authority in the interest of health, safety or
security, the owner thereof shall not be entitled to
1 See discussion under Legal Remedies to recover one’s compensation, unless he can show that such
possession

PROPERTY, OWNERSHIP AND ITS MODIFICATION 15

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

condemnation or seizure is unjustified.” (Art. 436, expropriation is for public use or not. (City of Manila
NCC) vs. Chinese Community of Manila, 40 Phil. 349)

TWO STAGES IN EVERY ACTION FOR EXPROPRIATION: May a Property Devoted to Public Use be Converted to
1. Determination of the authority of the plaintiff to Another Public Use?
exercise the power of eminent domain and the - By authority of the Congress, a property devoted to
propriety of its exercise in the context of the facts public use can be rechanneled to another public use.
involved in the suit.
2. Determination by the court of the just compensation May Real Property Be Subjected to an “Easement Of Right
for the property sought to be taken. (Republic vs. Of Way” Through Expropriation?
Phil-Ville Development, 525 SCRA 776) - YES, normally expropriation deals with a transfer of
title or ownership; there is nothing wrong in imposing
REQUISITES OF EMINENT DOMAIN: a burden less than the transfer of ownership. For
1. Private property as the object of the expropriation; instance, it is unquestionable that real property may
2. The property is taken by the State or by a competent thru expropriation be subjected to an easement of
authority; right of way. (Republic vs. PLDT, 26 SCRA 620)
3. The purpose of the taking is for public use;
4. The taking must be attended with due process of
NPC vs. BONGBONG
law;
GR no. 164079, April4, 2007
5. There is payment of just compensation.
True, an easement of a right of way transmits no rights except the
easement itself, and respondent retains full ownership of the
property. The acquisition of such easement is, nevertheless, not
A. PRIVATE PROPERTY: gratis. As correctly observed by the CA, considering the nature and
Notes: the effect of the installation power lines, the limitations on the use
- The subject property belongs to a private person of the land for an indefinite period would deprive respondent of
normal use of the property. For this reason, the latter is entitled to
because the State can always use its properties for payment of just compensation, which must be neither more nor
the purposes for which they are intended by law less than the monetary equivalent of the land.
without compensating anyone.

B. COMPETENT AUTHORITY: D. DUE PROCESS OF LAW TO BE OBSERVED:

Notes: Notes:
- This refers to the State or National Government - No person shall be deprived of life, liberty or property
because eminent domain is an inherent power of the without due process of law x x x (Sec. 1, Art. III, 1987
State and no law is necessary to confer such right. Constitution)
(Visayan Refining Co., vs. Camus, 40 Phil. 550) - The State must observe the procedure for
- Any persons or corporations which enter upon expropriation proceedings laid down in Rule 67,
private properties without express authority granted ROC. (Santos vs. Director of Lands, 22 Phil. 424)
to them are mere trespassers and stand in no better
position than any other intruder. (MRR vs. Paredes, CN HODGES vs. MUNICIPAL BOARD OF ILOILO CITY
32 Phil. 534) GR no. L-18129, January 31, 1963

C. PUBLIC USE: FACTS: An Ordinance was passed by the Municipal Board of the
Notes: City of Iloilo prohibiting the construction on private land of buildings
- This refers to the utilization of a private property for on the ground that the land would be used for a public street.
purposes beneficial not to a few but to a great
RULING: The Ordinance is invalid as an exercise of the right of
number of people, such as roads, canals, rivers,
eminent domain, unless there be due process of law and payment
torrents, ports and bridges constructed by the State, of just compensation.
banks, shores, roadsteads, and others of similar
character under Art. 420(1), NCC.
- The question of “public use” is an issue of fact which Defendants in Expropriation is Not Limited To Owners:
must be proven by evidence. (City of manila vs. - The defendants in an expropriation include all other
Chinese Community of Manila, 40 Phil. 349) persons owning, occupying or claiming to own the
property. When a parcel of land is taken by eminent
In Case of Doubt on Whether the Property Will Be Devoted domain, the owner of the fee is not necessarily the
For Public Use or not, The Doubt Must Be Resolved in only person who is entitled to compensation. Every
Favor of the Property Owner: person having an estate or interest at law or in equity
- Extreme caution is called for in resolving complaints in the land taken is entitled to share in the award. If a
for condemnation, such that when a serious doubt person claiming an interest in the land sought to be
arises regarding the supposed public use of property, condemned is not made a party, he is given the right
the doubt should be resolved in favor of the property to intervene and lay claim to the compensation. (De
owner and against the State. (Barangay Sindalan, Knecht vs. CA, 290 SCRA 223; De Knecht vs. Sayo,
San Fernando, Pampanga vs. CA, 518 scra 649) GR no. 109234, May 20, 1998)
- However, if Congress had specifically authorized the
expropriation of a realty for a specified public Withdrawal of Petition for Expropriation:
purpose, the court is not allowed to inquire into the - Withdrawal is allowed if during the proceedings, the
necessity of such intended purpose. It is only when need for the property had already ceased or if to
the grant of the authority to expropriate is a general continue with it public interest will be prejudiced.
one, that the court may inquire whether the However, the withdrawal is subject to the payment of

16 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

damages suffered by the property owner. (City of
refuses to pay the compensation which has been assessed or
Manila vs. Ruyman, 37 Phil. 421) agreed upon; or fails or refuses to have the compensation
assessed and paid.
Reversion of Property Already Expropriated to the
Previous Owner:
E. JUST COMPENSATION; TIME TO PAY:
FERY vs. MUNICIPALITY OF CABANATUAN Notes:
GR no. 17540, July 23, 1921
- Just compensation is not only the correct
The question presented by the petitioner and demurrer is this: determination of the amount to be paid to the
When private land is expropriated for a particular public use, and property owner but laso the payment of the property
that particular public use is abandoned, does the land so within a reasonable time. (NPC vs. Dela Cruz, 514
expropriated return to its former owner? SCRA 56)

The answer to that question depends upon the character of the title
acquired by the expropriator, whether it be the State, a province, a NPC vs. MANUBAY AGRO-INDUSTRIAL
municipality, or a corporation which has the right to acquire DEVELOPMENT CORP.
property under the power of eminent domain. If, for example, land GR no. 150936, August 18, 2004
is expropriated for a particular purpose, with the condition that
when that purpose is ended or abandoned the property shall return Granting arguendo that what petitioner acquired over respondent's
to its former owner, then, of course, when the purpose is property was purely an easement of a right of way, still, we cannot
terminated or abandoned the former owner reacquires the property sustain its view that it should pay only an easement fee, and not the
so expropriated. If, for example, land is expropriated for a public full value of the property. The acquisition of such an easement falls
street and the expropriation is granted upon condition that the city within the purview of the power of eminent domain. This conclusion
can only use it for a public street, then, of course, when the city finds support in similar cases in which the Supreme Court
abandons its use as a public street, it returns to the former owner, sustained the award of just compensation for private property
unless there is some statutory provisions to the contrary. Many condemned for public use.
other similar examples might be given. If, upon the contrary,
however, the decree of expropriation gives to the entity a fee Just compensation is defined as the full and fair equivalent of the
simple title, then, the of course, the land becomes the absolute property taken from its owner by the expropriator. The measure is
property of the expropriator, whether it be the State, a province, or not the taker's gain, but the owner's loss. The word "just" is used
municipality, and in that case the non-user does not have the effect to intensify the meaning of the word "compensation" and to convey
of defeating the title acquired by the expropriation proceedings. (10 thereby the idea that the equivalent to be rendered for the property
R.C.L., 240, sec. 202; 20 C.J., 1234, secs. 593-599, and numerous to be taken shall be real, substantial, full and ample.
cases cited; Reichling vs. Covington Lumber Co., 57 Wash., 225;
135 Am. St. Rep., 976; McConlihay vs. Wright, 121 U.S., 201.) In eminent domain or expropriation proceedings, the just
compensation to which the owner of a condemned property is
When land has been acquired for public use in fee simple entitled is generally the market value. Market value is "that sum of
unconditionally, either by the exercise of eminent domain or by money which a person desirous but not compelled to buy, and an
purchase, the former owner retains no rights in the land, and the owner willing but not compelled to sell, would agree on as a price
public use may be abandoned, or the land may be devoted to a to be given and received therefor.” Such amount is not limited to
different use, without any impairment of the estate or title acquired, the assessed value of the property or to the schedule of market
or any reversion to the former owner. (Fort Wayne vs. Lake Shore, values determined by the provincial or city appraisal committee.
etc. Ry. Co., 132 Ind., 558; 18 L.R.A., 367.) However, these values may serve as factors to be considered in the
judicial valuation of the property.
The petitioner having admitted that the municipality of Cabanatuan,
in the year 1915, had acquired a fee simple title to the land in The nature and character of the land at the time of its taking is the
question, it (the municipality) is the owner of the land in question, principal criterion for determining how much just compensation
notwithstanding the fact that it is making a use of the same other should be given to the landowner. All the facts as to the condition
than for which it was expropriated. of the property and its surroundings, as well as its improvements
and capabilities, should be considered.

Consequence of Persistent Failure To Pay Just Under Section 8 of Rule 67 of the Rules of Court, the court may
Compensation: "accept the report and render judgment in accordance therewith; or
for cause shown, it may recommit the same to the commissioners
REPUBLIC vs. LIM for further report of facts, or it may set aside the report and appoint
GR no. 161656, June 29, 2005 new commissioners, or it may accept the report in part and reject it
in part; x x x." In other words, the reports of commissioners are
The Republic now argues that under Valdehueza, respondent is not merely advisory and recommendatory in character, as far as the
entitled to recover possession of Lot 932 but only to demand courts are concerned.
payment of its fair market value. Of course, we are aware of the
doctrine that "non-payment of just compensation (in an
expropriation proceedings) does not entitle the private landowners Determination of Just Compensation is a Judicial
to recover possession of the expropriated lots." This is our ruling in Function:
the recent cases of Republic of the Philippines vs. Court of - No statute, decree or executive order can mandate
Appeals, et al., and Reyes vs. National Housing Authority. However, that its determination shall prevadings. (NPC vs.
the facts of the present case do not justify its application. It bears
Bongbong, 520 SCRA 292)
stressing that the Republic was ordered to pay just compensation
twice, the first was in the expropriation proceedings and the
second, in Valdehueza. Fifty-seven (57) years have passed since Consequential Damages and Consequential Benefits:
then. We cannot but construe the Republic’s failure to pay just
CONSEQUENTIAL CONSEQUENTIAL
compensation as a deliberate refusal on its part. Under such
circumstances, recovery of possession is in order. In several
DAMAGES BENEFITS
jurisdictions, the courts held that recovery of possession may be
had when property has been wrongfully taken or is wrongfully
retained by one claiming to act under the power of eminent domain
or where a rightful entry is made and the party condemning

PROPERTY, OWNERSHIP AND ITS MODIFICATION 17

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

The injuries which the owner of The gains or advantages
the property subject of which the property owner
expropriation had suffered by will enjoy by reason of the
reason of the expropriation
expropriation.
other than the loss of the
property expropriated.

Ex: “If standing improvements Ex: If a portion of the land of the

on the land expropriated are property owner is expropriated
totally or partially demolished, for establishment of a public
the destruction constitutes road, the adjacent land of the
consequential or incidental owner will increase in value.
damages.” This increase in value is the
benefit which the owner will
gain.

Source: Municipality of Tarlac vs. Besa, 55 Phil. 432)

CITY OF MANILA vs. CORRALES

GR no. L-10076, October 28, 1915

FACTS: The action is for the purpose of expropriating certain PD 1533 Provides for a Simple Rule:
property. Commissioners were appointed by the court to assess - In determining just compensation for private property
the damages to be paid for the properties. After hearing the acquired through eminent domain proceedings, the
witness, the commissioners submitted a report reducing the value compensation to be paid shall not exceed the value
of the land. The court rendered judgment on the basis of the report. declared by the owner of or anyone having legal
Plaintiff and defendant were dissatisfied with the valuation made by
interest in the property or determined by the
the commissioner.
assessor, pursuant to the Real Property Tax Code,
RULING: In expropriation proceedings the question of the value of whichever value is lower, prior to the
the property is always a difficult one to decide. In determining the recommendation or decision of the appropriate
value of land appropriated for public purposes, the same Government Office to acquire the property. (Sec. 1,
considerations are to be regarded as in a sale of property between PD 1533; Republic vs. Santos, 141 SCRA 30)
private parties. The inquiry, in such cases, must be what is the
property worth in the market, viewed not merely with reference to When Rule 67, ROC (Eminent Domain) Does Not Apply:
the uses to which it is at the time applied, but with reference to the
- When there is no action for expropriation and the
uses to which it is plainly adapted, that is to say, What is it worth
from its availability for valuable uses? case involves only a complaint for damages or just
compensation, the provisions of Rule 67, ROC, would
In taking private property for public use under the power of eminent not apply. (National PowerCorp.vs. Bongbong, 520
domain, the persons whose property is thus taken, should be paid SCRA 290)
the reasonable market price of their property. The owners of
property should not take advantage of the necessity of the public Reckoning Time in the Determination of Market Value
for the purpose of requiring the Government to pay more than their
(Time of Filing of the Complaint or Time of Actual Taking):
property is worth, neither should the Government be permitted to
take the property of private persons at a less price than it is
- Just compensation is determined as of the date of
reasonably worth at the time of the expropriation. When we speak the taking of the property or the filing of the
of the market value of property taken under the power of eminent complaint whichever comes first. (Romonafe
domain, we mean the value which purchasers generally would pay Corporation vs. NPC, 513 SCRA 424)
for it. We do not mean what a purchaser would pay who had no - Ordinarily, the market value is determined as of the
particular object in view in purchasing, and no definite plan as to time of the filing of the expropriation case because
the use to which to put it. The owner has a right to its value for the the filing of the complaint normally coincides with the
use for which it would bring the most in the market.
taking of the property. However, when the taking, by
reason of urgent need, is done ahead of the filing of
Offsetting of Consequential Benefits Againat the complaint. In the latter situation, the market value
Consequential Damages: is fixed at as of the date of actual taking or
- Gen. Rule: Consequential benefits may be offset only occupation of the property by the petitioner.
against the consequential damages: (Republic vs. Lara, 96 Phil. 170; MIAA vs. Rodriguez,
- Exception: 483 SCRA 619)
- Never against the basic value of the
property taken. Payment of Legal Interest:
- In no case shall the consequential benefits - The government is liable for payment of legal interest
assessed exceed the consequential (6% per annum as per BSP Circular no. 799), if there
damages assessed, or the owner be is no immediate payment made for the value of the
deprived of the value of his property so property at the time of actual taking. (Phil. Executive
taken. (Sec. 6, Rule 67, ROC) Commission vs. Estacio, 98 Phil 218)
- In the computation of legal interest, the value of the
crops which had to be destroyed must be added to
the market value of the land. (Republic vs. Gonzales,
94 Phil. 956)

18 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

When Expropriator is Guilty of Bad Faith or Wanton Acts In
title over the abandoned road to the Pansacola spouses nor
Expropriating Property, Exemplary Damages and extinguish their ownership over the land traversed by the new
Attorney’s Fees May Be Imposed: provincial highway. No evidence was introduced by petitioner to
- For more than twenty (20) years, the MIAA occupied show that the survey was actually undertaken and a specific
the subject lot without the benefit of expropriation portion of the abandoned road partitioned and conveyed to the
proceedings and without the MIAA exerting efforts to Pansacolas. It must be stressed that the agreement to transfer the
ascertain ownership of the lot and negotiating with property was made in 1974. More than twenty years later, no actual
any of the owners of the property. To our mind, these transfer had yet been made. Unless and until the transfer is
consummated, or expropriation proceedings instituted by the
are wanton and irresponsible acts which should be government, private respondent continues to retain ownership of
suppressed and corrected. Hence, the award of the land subject of this case.
exemplary damages and attorneys fees is in order.
However, while Rodriguez is entitled to such
exemplary damages and attorney’s fees, the award
granted by the courts below should be equitably
reduced. We hold that Rodriguez is entitled only to CONCEPT OF EXTRAORDINARY EXPROPRIATION:
₱200,000.00 as exemplary damages, and attorney’s - This is the taking of property for private use for the
fees equivalent to one percent (1%) of the amount benefit of certain people as provided by law.
due. (MIAA vs. Rodriguez, GR no. 161836, February - The State shall promote Social Justice in all phases
28, 2006) of national development. (Sec. 10, Art. II, 1987
Constitution)
Remedy of Owner If government Refused to Pay:
- The owner may sue the Auditor General to enforce RATIONALE ON EXTRAORDINARY EXPROPRIATION:
collection of just compensation. (Ministerio vs. CFI - To maintain the quality of owning of lands and the
Cebu, 40 SCRA 464; santiago vs. Republic, 87 SCRA championing of the cause of social justice to the end
294) that the public welfare will be enhanced. (Guido vs.
RPA, 84 Phil. 847)
Transfer of Ownership; When Effected
- The ownership over the property taken is transferred EXPROPRIATION OF ESTATE (URBAN AND RURAL) FOR
only when the just compensation with proper interest SUBDIVISION INTO LOTS:
(if due) had been made. (Jacinto vs. Director of - The law on expropriation of private properties for
Lands, 49 Phil. 215) subdivision into lots and then resale seeks to solve a
- However, possession may be taken before payment social problem. The Legislature no longer looks to
of just compensation in cases of emergencies. In large estates, but to any private immovable where
such case, the taxes on the property must be paid by there exist serious conflicts and there is necessity of
the government from the time of its taking or if paid solving the same. A mere 2 Hectare parcel of land
by the owner, the latter must be reimbursed therefor. was expropriated and then sold only to 4 families
(Pineda (2009), p.89) staying on the land to solve a social problem. (Rural
Progress Administration vs. Reyes, 93 Phil. 1116)
Restoration of Property to the Owner (Art. 435, par. 2,
NCC): CONCEPT OF SOCIALIZED HOUSING:
- “Should this requirement (Payment of Just - Socialized Housing is defined as the construction of
Compensation) be not first complied with, the courts dwelling units for the middle and lower class
shall protect and, in a proper case, restore the owner members of our society, including the construction of
in his possession.” (Art. 435, par. 2, NCC) the supporting infrastructure and other facilities. (PD
- The government cannot be allowed to confiscate 1224)
properties of its citizens without due process or - expropriation of lands for socialized housing
without just compensation. The courts are authorized constitutes public use.
to protect the citizens from the despontic acts of the - The fact that only a few would actually benefit from
Government. Moreover, courts can order the the expropriation does not necessarily diminish the
restoration of the property to the aggrieved owners. essence and character of public use. (Manosca vs.
- However, when restoration is no longer feasible CA, 252 SCRA 412)
because the property is now a public road, the owner - Private lands rank last in the order of priority for
shall only be paid just compensation plus purposes of socialized housing. (Estate of Jose BL
interest.(Alfonso vs. Pasay City, 106 Phil. 1017) Reyes vs. City of Manila, 422 SCRA 551)

INTEREST OF EDUCATION IS HIGHER THAN THE

VELARMA vs. CA
INTEREST OF A FEW TENANTS:
GR no. 113615, January 25, 1996
- When there is a conflict between the interest of
Petitioner’s claim is anchored on a document entitled "Minutes of education and the interest of a few tenants who want
the Meeting of the Sangguniang Bayan of Mauban, Quezon" dated the property to be expropriated for them, the former’s
November 5, 1974. Therein, Publio Pansacola signified before the interest is considered superior. (City of Manila vs.
Sangguniang Bayan of Mauban his agreement to the transfer of Arellano Law College, 47 OG 4197; 85 Phil. 663)
that portion of his land traversed by the new provincial highway and
its shoulder in exchange for a corresponding portion of the old CONFLICT BETWEEN THE CONSTITUTIONAL
abandoned provincial road.
PROHIBITION AGAINST IMPAIRMENT OF CONTRACTS
As found by the trial court, the said minutes of the meeting of the AND THE POWER OF EMINENT DOMAIN:
Sangguniang Bayan do not mention the execution of any deed to - Gen. Rule: The power of Eminent Domain prevails.
perfect the agreement. An engineer was appointed to survey the - Exception:
old abandoned road, but this act does not in any manner convey

PROPERTY, OWNERSHIP AND ITS MODIFICATION 19

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- If the government is part of the contract condemnation or seizure is unjustified. (Art. 436,
which is valid, like a contract of lease, it NCC)
cannot later be repudiate said contract of - Art. 436, NCC, provides for one situation where a
lease and instead pursue an expropriation property may be condemned or seized by the State
case. without compensating the owner of the property. (US
- Expropriation cannot be resorted to as way vs. Toribio, 15 Phil. 85)
of repudiating the contract agreed upon - Houses constructed on public streets are nuisances
which is validly and legally contracted. at all times for obstructing the free use of the streets
(Noble vs. City of Manila, 38 OG. 2770) and accordingly may be demolished. (Sitchon vs.
Aquino, 52 OG. 1399)
PROPERTY SUBJECT OF EXPROPRIATION:
- Expropriation may be resorted to for the taking of REQUISITES FOR THE EXERCISE OF POLICE POWER:
private property needed for the public use as of the 1. It must appear first that the interests of the public
present and also of adjacent property which may be generally, as distinguished from the those of a
needed in the future by reason of expected particular class, require such interference;
expansion of the railroad. This is because the growth 2. The means employed are reasonably necessary and
and future need of the enterprise must be not unduly oppressive upon individuals;
considered. (MRR vd. Mitchell, 50 Phil. 832) 3. There must be due process. (US vs. Toribio, Supra;
Monteverde vs. Geronimo,52 Phil. 123)
ELEMENTS OF “TAKING” OF PROPERTY FOR PURPOSES
OF EMINENT DOMAIN: WHEN COMPENSATION IS DEMANDABLE:
1. The expropriator must enter a private property; - If the owner of the property can sow that the
2. The entrance into private property must be for more condemnation or seizure is bereft of justification, he
than a momentary period; will be entitled to compensation for the loss or injury
3. The entry into the property should be under warrant he had suffered by reason of the condemnation or
or color of legal authority; seizure. (Art. 436, NCC)
4. The property must be devoted to a public use or
otherwise informally appropriated or injuriously
Principle of Self-Help and State of Necessity
affected; and
5. The utilization of the property for public use must be
in such a way as to oust the owner and deprive him PRINCIPLE OF SELF-HELP:
of all beneficial enjoyment of the property. (NPC vs. - The owner or lawful possessor of a thing has the right
CA, 254 SCRA 577) to exclude any person from the enjoyment and
disposal thereof. For this purpose, he may use such
IMMEDIATE ENTRY IN PROPERTY SUBJECT OF force as may be reasonably necessary to repel or
EXPROPRIATION UNDER RA 8974 (REQUIREMENTS): prevent an actual or threatened unlawful physical
CAPITOL STEEL CORP. vs. PHIVIDEC INDUSTRIAL
invasion or usurpation of his property. (Art. 429, NCC)
AUTHORITY
GR no. 169453, December 6, 2006 CONDITION OF THE PRINCIPLE:
- The force must be reasonably necessary to repel the
Under R.A. 8974 (“AN ACT TO FACILITATE THE ACQUISITION OF unlawful physical invasion or usurpation of proper.
RIGHT-OF-WAY, SITE OR LOCATION FOR NATIONAL He can chase the culprit immediately thereafter to
GOVERNMENT INFRASTRUCTURE PROJECTS AND FOR OTHER recover the thing, Theremust be no delay in the
PURPOSES.”), the requirements for authorizing immediate entry in pursuit. If he fails, the proper recourse is to go to
expropriation proceedings involving real property are: (1) the filing
court if the culprit has been identified. (Art. 536, NCC)
of a complaint for expropriation sufficient in form and substance; (2)
due notice to the defendant; (3) payment of an amount equivalent
to 100% of the value of the property based on the current relevant GERMAN MANAGEMENT & SERVICES, INC. vs. CA
zonal valuation of the BIR including payment of the value of the GR no. 76217, September 14,1989
improvements and/or structures if any, or if no such valuation is
available and in cases of utmost urgency, the payment of the In the case at bar, it is undisputed that at the time petitioner
proffered value of the property to be seized; and (4) presentation to entered the property, private respondents were already in
the court of a certificate of availability of funds from the proper possession thereof . There is no evidence that the spouses Jose
officials. were ever in possession of the subject property. On the contrary,
private respondents' peaceable possession was manifested by the
Upon compliance with the requirements, a petitioner in an fact that they even planted rice, corn and fruit bearing trees twelve
expropriation case, in this case respondent, is entitled to a writ of to fifteen years prior to petitioner's act of destroying their crops.
possession as a matter of right and it becomes the ministerial duty
of the trial court to forthwith issue the writ of possession. No Both the Municipal Trial Court and the Regional Trial Court have
hearing is required48 and the court neither exercises its discretion or rationalized petitioner's drastic action of bulldozing and destroying
judgment in determining the amount of the provisional value of the the crops of private respondents on the basis of the doctrine of
properties to be expropriated as the legislature has fixed the self-help enunciated in Article 429 of the New Civil Code. Such
amount under Section 4 of R.A. 8974. justification is unavailing because the doctrine of self-help can only
be exercised at the time of actual or threatened dispossession
which is absent in the case at bar. When possession has already
NO COMPENSATION IN THE PROPER EXERCISE OF
been lost, the owner must resort to judicial process for the recovery
POLICE POWER OF THE STATE: of property. This is clear from Article 536 of the Civil Code which
- When any property is condemned or seized by states, "(I)n no case may possession be acquired through force or
competent authority in the interest of health, safety or intimidation as long as there is a possessor who objects thereto.
security, the owner thereof shall not be entitled to He who believes that he has an action or right to deprive another of
compensation, unless he can show that such the holding of a thing, must invoke the aid of the competent court,
if the holder should refuse to deliver the thing.”

20 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

hedges, or by any other means without detriment to
SHOOTING AN ANIMAL OWNED BY ANOTHER WHICH servitudes constituted thereon. (Art. 430, NCC)
DESTROYED PLANTS IS NOT JUSTIFIED:
- The owner of the plants who shot an animal to LIMITATION ON THE RIGHT TO ENCLOSE:
death,out of vengeance is not justified under Art. 429, - In sofencing the property, no servitude or easement
NCC, for he can be convicted of malicious mischief. constituted thereon should be impaired.
(People vs. Segovia, 103 Phil. 1162)
LUNOD vs. MENESES
COUNTERPART OF SELF-HELP IN CRIMINAL LAW: GR no. 4223, August 29, 1908
- The loose counterpart of the principle of self-help in
criminal law is self-defense provided under Art. 11, FACTS: Meneses constructed works and dam on his property
par. 1, of the RPC) which block the passage, through his land and the outlet to the
Taliptip River, of the waters which flood the higher lands of the
CAN A THIRD PERSON EXERCISE THE RIGHT OF SELF- plaintiffs
HELP?
ISSUE: W/N Meneses violated the easement charged on his
- A third person,who is not the possessor,may repel
property.
the unlawful aggression on a property owned by
another. In such event, he is acting as a negotiorum RULING: It is true that article 388 of said code authorizes every
gestor. The owner or possessor must indemnify him owner to enclose his estate by means of walls, ditches fences or
for injuries sustained while exercising that right. any other device, but his right is limited by the easement imposed
(Pineda (2009), p. 60) upon his estate.

THE PRINCIPLE OF SELF-HELP CAN BE EXERCISED The defendant Meneses might have constructed the works
necessary to make and maintain a fish pond within his own land,
ONLY BY THE IMMEDIATE POSSESSOR:
but he was always under the strict and necessary obligation to
- The right to use force to defend a property is respect the statutory easement of waters charged upon his
available only to the immediate possessor of the property, and had no right to close the passage and outlet of the
property and not to the previous possessor, unless waters flowing from the lands of the plaintiffs and the lake of
he is acting as third person coming to the defense of Calalaran into the Taliptip River. He could not lawfully injure the
the property as negotiorum gestor. (Pineda (2009), p. owners of the dominant estates by obstructing the outlet to the
60) Taliptip River of the waters flooding the upper lands belonging to
the plaintiffs.
STANDARD OR MEASURE OF REASONABLENESS OF
THE FORCE USED: PRINCIPLE OF STATE OF NECESSITY:
GRAND UNION SUPERMARKET, INC. vs. ESPINO, JR. - This principle authorizes the destruction of a property
GR no. L-48250, December 28, 1979 which is lesser in value to avert the danger posed to
another property value of which is much greater.
This Court needs only to stress the following undisputed facts - The owner of a thing has no right to prohibit the
which strongly and convincingly uphold the conclusion that private interference of another with the same, if the
respondent was not "shoplifting." Thus, the facts that private interference is necessary to avert an imminent danger
respondent after picking the cylindrical "rat-tail" file costing P3.85 and the threatened damage, compared to the
had placed it inside his left front breast pocket with a good portion
damage arising to the owner from the interference, is
of the item exposed to view and that he did not conceal it in his
person or hid it from sight as well as the fact that he paid the much greater. The owner may demand from the
purchases of his wife amounting to P77.00 at the checkout counter person benefited indemnity for the damage to him.
of the Supermarket, owed that he was not acting suspiciously or (Art. 432, NCC)
furtively. And the circumstance that he was with his family
consisting of his wife Mrs. Caridad Jayme Espino, and their two COUNTERPART OF STATE OF NECESSITY IN CRIMINAL
daughters at the time negated any criminal intent on his part to LAW:
steal.
- In criminal law, state of necessity is a justifying
Petitioners acted in good faith in trying to protect and recover their
circumstances under Art. 11, par.4, of the RPC.
property, a right which the law accords to them. Under Article 429,
New Civil Code, the owner or lawful possessor of a thing has a ERRORS, MISTAKES OR MISCALCULATIONS IN STATE
right to exclude any person from the enjoyment and disposal OF NECESSITY:
thereof and for this purpose, he may use such force as may be - If through error, mistake or miscalculation, a person
reasonably necessary to repel or prevent an actual or threatened thought that he is in a state of necessity when
unlawful physical invasion or usurpation of his property. And since actually he is not and in the process, he destroyed
a person who acts in the fulfillment of a duty or in the lawful
the property of another, his act would be illegal. He is
exercise of a right or office exempts him from civil or criminal
liability, petitioner may not be punished by imposing exemplary liable for damages for the injury suffered by the
damages against him. We agree that petitioners acted upon owner of the property so destroyed.
probable cause in stopping and investigating private respondent for
taking the file without paying for it, hence, the imposition of BASIS OF LIABILITY OF THOSE BENEFITED FROM THE
exemplary damages as a warning to others by way of a deterrent is DESTRUCTION OF ANOTHER’S PROPERTY:
without legal basis. We, therefore, eliminate the grant of exemplary - Even when an act or event causing damage to
damages to the private respondent.
another's property was not due to the fault or
negligence of the defendant, the latter shall be liable
RIGHT TO ENCLOSE OR FENCE ONE’S LAND OR for indemnity if through the act or event he was
TENEMENTS: benefited. (Art. 23, NCC)
- Every owner may enclose or fence his land or
tenements by means of walls, ditches, live or dead TAN vs. STANDARD OIL CO

PROPERTY, OWNERSHIP AND ITS MODIFICATION 21

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

under claim of ownership. (Alano vs. Ignacio, 4 SCRA
GR no. L-4160, July 29, 1952
568)
On May 3, 1949, the Standard Vacuum Oil Company ordered the
delivery to the Rural Transit Company at its garage at Rizal Avenue PNB vs. CA and AUSTRIA
Extension, City of Manila, of 1,925 gallons of gasoline using a GR no. 135219, January 17, 2002
gasoline tank-truck trailer. The truck was driven by Julito Sto.
Domingo, who was helped Igmidio Rico. While the gasoline was
FACTS: PNB initiated the extrajudicial foreclosure of a parcel of
being discharged to the underground tank, it caught fire,
land. It won the bidding as its bid was the highest. For failure of the
whereupon Julito Sto. Domingo drove the truck across the Rizal
mortgagors Sps. Monods to redeem, ownership was consolidated
Avenue Extension and upon reaching the middle of the street he
in the PNB.
abandoned the truck with continued moving to the opposite side of
the first street causing the buildings on that side to be burned and PNB obtained a writ of possession; the Sheriff failed to implement
destroyed.
the writ because third persons (Sps. Austrias) are in possession of
the property who claim ownership over it. Sps. Austrias rely on Sec.
The Standard Vacuum Oil Co and the Rural Transit Co., which were
33, Rule 39 of the Rules on Civil Procedure which reads:
benefited by the driver’s action are liable to reimburse Anita Tan for “Upon the expiration of the right of redemption, the
the damages suffered by the latter.
purchaser or redemptioner shall be substituted to and
acquire all the rights, title, interest and claim of the
judgment obligor to the property at the time of levy. The
PREVAILING RULE IN CASE OF CONFLICT:
possession of the property shall be given to the
- In case of conflict between the exercise of the right of purchaser or last redemptioner by the same officer
self-help and a licit state of necessity, the latter shall unless a third party is actually holding the property
prevail because there is no unlawful aggression when adversely to the judgment obligor.”
a person or group of persons acts pursuant to the
right given in a state of necessity. ISSUE: Can the PNB take possession of the property already
registered in its name by virtue of a rit of possession?

Use Injuring Rights of Third Persons RULING: In Barican v. Intermediate Appellate Court,[27 we held
that the obligation of a court to issue an ex-parte writ of possession
in favor of the purchaser in an extrajudicial foreclosure sale ceases
CIVIL CODE PROVISION: to be ministerial once it appears that there is a third party in
- The owner of a thing cannot make use thereof in possession of the property who is claiming a right adverse to that
such manner as to injure the rights of a third of the debtor/mortgagor. The same principle was inversely applied
person.(Art. 431, NCC) in a more recent case,[28 where we ruled that a writ of possession
may be issued in an extrajudicial foreclosure of real estate
mortgage, only if the debtor is in possession and no third party had
ARTICLE 431, NCC, IS A JUST AND PROPER
intervened. Although the factual nuances of this case may slightly
RESTRICTION ON THE RIGHT OF OWNERSHIP: differ from the aforecited cases, the availing circumstances are
- While a property owner has the right (Jus Abutendi) undeniably similar a party in possession of the foreclosed property
to do whatever he wants with his property, this is is asserting a right adverse to the debtor/mortgagor and is a
subject to restrictions under the Civil Code. One stranger to the foreclosure proceedings in which the ex-parte writ
restriction is Art. 431, NCC. of possession was applied for.
- A property owner cannot set aflame his property like
a house, if in so doing, he would also cause the
REQUIREMENTS IN SUBSTIATING AN ACTION TO
burning of the neighboring houses. Otherwise, he will
RECOVER PROPERTY:
be liable criminally and civilly.
1. Proper Identification of the property;
- All private property is acquired and held under the
- The Correct boundaries of the land subject
Tacit Condition that it shall not be so used as to
of the action for recovery must be proved.
injure the equal rights of others or greatly impair the
Failure to do so will justify the dismissal of
public rights and interests of the community. (Taylor
the action. (Santiago vs. Santos, 48 Phil.
vs. Manila Electric Railroad and Light Co., 16 Phil. 8)
567)

Disputable Presumption of Ownership 2. Plaintiff’s Title Must be Clear, Strong and

Credible:
- The plaintiff must stand on the strength of
CIVIL CODE PROVISION: his own title. If he cannot prove his title or
- Actual possession under claim of ownership raises the basis of his claim, his complaint must be
disputable presumption of ownership. The true owner dismissed even if the claim of the defendant
must resort to judicial process for the recovery of the is weak or doubtful.
property. (Art. 433, NCC) - If the claims of the parties are both weak or
doubtful, the claims of the parties are both
DISPUTABLE PRESUMPTION OF OWNERSHIP: weak or doubtful, the claim of the defendant
- A person who is in actual possession of a property must prevail for the reason that being in
and who at the same time claims ownership over it is possession of the property, he is presumed
presumed to be the owner thereof. However, this to be the owner thereof. (Art. 433, NCC) and
presumption is disputable and can be overcome by he cannot be obliged to show or prove a
strong evidence. (Perez cs. Mendoza, 65 SCRA 481; better title. (Art. 541, NCC; Santos vs.
Pascual vs. Mina, 20 Phil. 202) Espinosa, 26 Phil. 398)
- A tenant on a landholding who admits his tenancy
relationship with the landlord cannot be presumed to
be the owner of the land because, while he is in Legal Remedies to Recover One’s Possession
actual possession of the land, he does not possess it

22 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

ACTIONS FOR RECOVERY OF POSSESSION:
Filed within 1 year from the Filed 1 year after disposition of
1. Regarding Personal Property: unlawful possession of the real the real property.
a. Replevin property.
2. Regarding Real Property:
a. Forcible entry or unlawful detainer; As to the Issue Concerned:
b. Accion Publiciana;
c. Accion Reivindicatoria
Right to the physical possession Better right to possession over
REPLEVIN: of the real property. the real property.
- The action for recovery for personal property is by
Replevin under Rule 60, ROC, which requires the As to the Court of Jurisdiction:
plaintiff to state in an affidavit that he is the owner of
the property claimed, particularly describing it, or that
he is entitled to the possession thereof and that it is MTC (Summary Action) RTC (Plenary Action
“wrongfully detained by the adverse party.” Source: Regis, Jr. vs. CA, 528 SCRA 611)
- Replevin is both a form a principal remedy and of a
provisional remedy that would allow the plaintiff to Meaning of “Better Right of Possession Over the Real
retain the thing wrongfully detained by another Property”:
pendente lite. A property that is validly in custodia - In these actions, the only issue is who between the
legis cannot be the subject of a replevin suit. (Calub contending parties has the better of right to possess
vs. CA, 331 scra 55) the contested property, independent of any claim of
- The action for replevin shall prescribe for 4 or 8 ownership. (Fernandez, Sr. vs. Co., 625 SCRA 379)
years from the time the possession thereof is lost. - The plaintiff need only to allege and prove prior
(Art. 1132, NCC) possession de facto and undue deprivation thereof. It
does not even matter if the possessor’s title to the
property is questionable because, as a rule, a
A. FORCIBLE ENTRY OR UNLAW DETAINER (Accion pending civil action involving ownership of the same
Interdictal): property does not justify the suspension of the
ejectment proceedings. Only in rare cases has the
Concept: Supreme Court allowed a suspension of the
- Forcible entry and unlawful detainer are actions for ejectment proceedings. (Amagan vs. Marayag, 326
the recovery of possession de facto which must be SCRA 581; Bernachea vs. CA, 559 SCRA 363)
brought before the inferior court within 1 year from
unlawful possession under Rule 70, ROC. C. ACCION REIVINDICATORIA:
- Both are summary in nature because they involve a
disturbance of social order which must be abated as Concept:
promptly as possible without any undue reliance on - A reivindicatoria action to recover possession based
technical and procedural rules which only cause on allegations of ownership of property by the
delay. (Co kENG kian vs. IAC, 189 SCRA 112) plaintiff. (Reyes vs. Sta. Maria, 91 SCRA 168)
- When a party refused to deliver possession of a
Difference Between Forcible Entry and Unlawful Detainer: property due to his adverse claim of ownership over
FORCIBLE ENTRY UNLAWFUL DETAINER said property, the action is clearly an Accion
Reivindicatoria. (Miraflor vs. ca, 142 SCRA 18)
Unlawful possession is from the Possession was at first lawful
time of entry of the illegal and later became illegal due to When Accion Publician or Accion Reivindicatoria May Be
possessor to the property of the the expiration or termination of Filed?
lawful owner. the right to possess. - When the complaint fails to aver facts constitute of
forcible entry or unlawful detainer, as where it does
Source: De La Paz vs. Panis, 245 SCRA 242; Sarmiento vs.
not state how entry was effected or how and when
CA, 250 SCRA 10)
dispossession started, the remdy should either be an
accion publiciana or an accion reivindicatoria in the
B. ACCION PUBLICIANA:
proper Regional trial Courts. (Heirs of Demetrio
mechor vs. Mechor, 415 SCRA 726)
Concept:
- Accion publiciana is an ordinary civil proceeding to
determine the better right of possession of realty
MATRIX OF DISTINCTIONS:
independently of title and refers likewise to an
ejectment suit filed after the expiration of 1 year from ACCION ACCION ACCION
the accrual of the cause of action or from the INTERDICTAL: PUBLICIANA: REINVINDICAT
ORIA:
unlawful withholding of possession of the realty.
(Encarnacion vs. Amigo, 502 SCRA 172)
Basis Possession Possession Ownership

Difference Between Between Accion Interdictal and Nature of the Who has the Who has the Who Owns the
Accion Publiciana: Issue: Right to Better right to real property?
Physically Possess the
ACCION INTERDICTAL ACCION PUBLICIANA Possess the Real
Real Property? Property?
As to the Filing:
Prescriptive 1 year 10 Years 10 Years

PROPERTY, OWNERSHIP AND ITS MODIFICATION 23

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

motion within thirty (30) days from the filing thereof.
Period:
(Art. 539, par. 2, NCC)
Court of MTC (Summary RTC (Plenary RTC (Plenary
Jurisdiction: Action) Action) Action) Rationale:
- There are at present prolonged litigations between
the owner and the usurper, and the former is
frequently deprived of his possession even when he
has an immediate right thereto. (Civil Code
ANCILLARY REMEDIES FOR RECOVERY OF Commission Report, p. 98)
POSSESSION:
1. Writ of Possession; and
2. Writ of Preliminary Mandatory Injunction:
ACTION TO RECOVER PROPERTY:
A. WRIT OF POSSESSION: - In an action to recover, the property must be
identified, and the plaintiff must rely on the strength
Concept: of his title and not on the weakness of the
- This writ is generally an order whereby a sheriff is defendant's claim. (Art. 434, NCC)
commanded to place a person in possession of a real
property or personal property, such as, when a REQUISITES OF AN ACTION TO RECOVER PROPERTY:
property is extrajudicially foreclosed. (Autocorp group 1. To clearly identify the land he is claiming in
and Autographics, Inc. vs. CA, 437 SCRA 678) accordance with the title/s on which he bases his
right of ownership; and
When the Writ of Possession is Proper: 2. To prove that he has a better title than the
1. In a land registration proceeding, which a proceeding defendant.
in rem. (Estipona vs. Navarro, GR no. L-41825,
January 30, 1976); REASONS WHY PLAINTIFF IS NOT ALLOWED TO RELY
2. In an extrajudicial foreclosure of a realty mortgage ON THE WEAKNESS OF DEFENDANT’S TITLE:
(Sec. 7, Act no. 3135); 1. There is the possibility that neither the plaintiff nor the
3. In judicial foreclosure of mortgage (a quasi in rem defendant is the true owner of the property, in which
proceeding), provided that the mortgagor is in case, the defendant who is in possession wil be
possession of the mortgaged realty and no third preferred;
person, not a party to the foreclosure suit, had 2. The one in possession is presumed to be the owners,
intervened. (Ramos vs. Manalac and Lopez, 89 Phil. and he cannot be obliged to show or prove a better
207); and title;
4. In execution sales (Sec. 35, last par., Rule 39, ROC) 3. The possessor in the concept of an owner is
presumed to be in good faith. And he cannot be
The Issuance of a Writ of Possession is a Ministerial expected to be carrying every now and then his
Function: proofs of ownership over the property;
- After the consolidation of title in the buyer’s name, for 4. The plaintiff who is affirmatively asserting something
failure of the mortgagor to redeem, the writ of must prove his assertion under the principle that “he
possession becomes a matter of right - its issuance who alleges must prove.” If he cannot prove, the
to a purchaser in an extrajudicial foreclosure is defendant does not have to prove. The complaint for
merely a ministerial function. until the foreclosure sale recovery must outrightly be dismissed. (Art. 541,
of the property in question is annulled by a court of NCC; Santos vs. Espinosa, 26 Phil. 398)
competent jurisdiction, the mortgagor is bereft of
valid title and right to prevent the issuance of a writ of EXAMPLE CASES:
possession in favor of the buyer. *Yulienco vs. CA, 1. To maintain an action to recover ownership of a
393 SCRA 143) parcel of land, the claimant must prove not only his
ownership but also the identity of the property.
When Issuance Ceases To Be Ministerial: (Laluan vs. Malpaya, 65 SCRA 494)
- once it appears that there is a third party in 2. Tax declarations and receipt alone are not conclusive
possession of the property who is claiming a right proofs of ownership, however if it is accompanied by
adverse to that of the debtor/mortgagor. (PNB vs. possession for a period of time sufficient for
CA, 374 SCRA 22) prescription, the same are strong evidence. (Bautista
vs. CAM 131 SCRA 532);
3. Survey plans or technical descriptions prepared at
B. WRIT OF PRELIMINARY MANDATORY the instance of the plaintiffs are self-serving evidence
INJUNCTION: of ownership. And a mere tax declarations cannot
serve as reliable basis for a finding of ownership in
Concept: favor of the plaintiffs. (Chan vs. CA, 33 scra 740;
- This is an injunction requiring the defendant to do Rizal Cement vs. Villareal, 135 SCRA 151)
something. (Sec. 1, Rule 58, ROC) 4. To allow the erroneous inclusion in a Torrens Title of
- A possessor deprived of his possession through Another’s land would put a premium on landgrabing.
forcible entry may within ten days from the filing of (Almarza vs. Arguelles, 156 SCRA 718)
the complaint present a motion to secure from the
competent court, in the action for forcible entry, a
Surface Rights
writ of preliminary mandatory injunction to restore
him in his possession. The court shall decide the
BASIS:

24 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- The right of the owner of a piece of land extends to
everything above the surface and to the substance of AERIAL OR SPACE RIGHTS:
the earth beneath the surface. but he may not forbid - ideally, the owner of a parcel of land should be the
anything which is done at such a height or depth that owner of the aerial space exactly corresponding to
he has no interest in its prevention. (Art. 905, German the size and contours of that land vertically imagined.
Code; Tolentino, Book II) - On the surface of his land, the owner can construct
or build structures thereon by reason of his
SURFACE RIGHTS OF LANDOWNERS: ownership over the lands. his vertical space
- The owner of a parcel of land is the owner of its ownership is limitless.
surface and of everything under it, and he can
construct thereon any works or make any plantations RESTRICTIONS ON RIGHT OF OWNERSHIP
and excavations which he may deem proper, without 1. Police power, taxation power, and eminent domain;
detriment to servitudes and subject to special laws 2. The works, plantations and excavations he made
and ordinances. He cannot complain of the must not prejudice easements or servitudes;
reasonable requirements of aerial navigation. (Art. 3. Special laws and ordinances must be compiled with;
437, NCC) 4. Reasonable requirements of aerial navigation must
be respected.
REPUBLIC vs. RURAL BANK OF KALOOKAN, INC.
GR no. 185124, January 25, 2012 CONCEPT OF REVERSION:
- It is an action where the ultimate relief sought is to
Consequently, the CA’s findings which upheld those of the trial revert the land back to the government under the
court that respondents owned and possessed the property and Regalian Doctrine. Considering that the land subject
that its substrata was possessed by petitioner since 1978 for the of the action originated from a grant by the
underground tunnels, cannot be disturbed. Moreover, the Court government, its cancellation is a matter between the
sustains the finding of the lower courts that the sub-terrain portion grantor and grantee. (Caro vs. Sucaldito, 458 SCRA
of the property similarly belongs to respondents. This conclusion is
595)
drawn from Article 437 of the Civil Code which provides:
- A private individual may not bring an action for
“ART. 437. The owner of a parcel of land is the owner of reversion or any action which would have the effect
its surface and of everything under it, and he can of cancelling a free patent and the corresponding
construct thereon any works or make any plantations and certificate of title issued on the basis thereof, such
excavations which he may deem proper, without that the land covered thereby will again form part of
detriment to servitudes and subject to special laws and the public domain. (Alvarico vs. Sola, 383 SCRA 232)
ordinances. He cannot complain of the reasonable - Only the government, through the Solicitor General,
requirements of aerial navigation.
may institute an action to recover ownership of a
Thus, the ownership of land extends to the surface as public land. (VSC Commercial Enterprises vs. CA,
well as to the subsoil under it. 394 SCRA 74)

xxx xxx xxx

Hidden Treasures
Registered landowners may even be ousted of ownership and
possession of their properties in the event the latter are reclassified
CIVIL CODE PROVISION:
as mineral lands because real properties are characteristically
indivisible. For the loss sustained by such owners, they are entitled - Hidden treasure belongs to the owner of the land,
to just compensation under the Mining Laws or in appropriate building, or other property on which it is found.
expropriation proceedings. Nevertheless, when the discovery is made on the
property of another, or of the State or any of its
Moreover, petitioner’s argument that the landowners’ right extends subdivisions, and by chance, one-half thereof shall
to the sub-soil insofar as necessary for their practical interests be allowed to the finder. If the finder is a trespasser,
serves only to further weaken its case. The theory would limit the he shall not be entitled to any share of the treasure. If
right to the sub-soil upon the economic utility which such area
offers to the surface owners. Presumably, the landowners’ right
the things found be of interest to science or the arts,
extends to such height or depth where it is possible for them to the State may acquire them at their just price, which
obtain some benefit or enjoyment, and it is extinguished beyond shall be divided in conformity with the rule stated.
such limit as there would be no more interest protected by law. (Art. 438, NCC)
- By treasure is understood, for legal purposes, any
Hence, the CA correctly modified the trial court’s Decision when it hidden and unknown deposit of money, jewelry, or
ruled thus: “We agree with the OSG that NIA, in the construction of other precious objects, the lawful ownership of which
irrigation projects, must necessarily make excavations in order to does not appear. (Art. 439, NCC)
build the canals. Indeed it is preposterous that NIA will be made to
pay not only for the value of the land but also for the soil excavated
from such land when such excavation is a necessary phase in the CONCEPT OF HIDDEN TREASURE:
building of irrigation projects. That NIA will make use of the - Any hidden and unknown deposit of money, jewelry,
excavated soil is of no moment and is of no concern to the or other precious objects, the lawful ownership of
landowner who has been paid the fair market value of his land. As which does not appear. (Pineda (2009), p. 112)
pointed out by the OSG, the law does not limit the use of the
expropriated land to the surface area only. Further, NIA, now being REQUISITES OF HIDDEN TREASURE:
the owner of the expropriated property, has the right to enjoy and
1. There is a deposit of money, jewelry or other precious
make use of the property in accordance with its mandate and
objectives as provided by law. To sanction the payment of the objects;
excavated soil is to allow the landowners to recover more than the 2. This deposit is hidden or unknown even the owner
value of the land at the time when it was taken, which is the true does not know about it anymore or he has
measure of the damages, or just compensation, and would abandoned it, that it is now open to occupation. (Art.
discourage the construction of important public improvements.” 713, NCC);

PROPERTY, OWNERSHIP AND ITS MODIFICATION 25

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

3. The lawful owner cannot be traced or identified.

RIGHTS OF THE OWNER OF HIDDEN TREASURE:

1. If the owner is the finder himself and no one else:
- the treasure totally belongs to the finder who
found it. (Art. 438, par. 1, NCC)
2. If the finder is a third person and he discovered it
by chance:
- he is entitled to one-half (½) of the value
thereof. the other half pertains to the owner
of the property where it was found.
3. If the finder is an intruder:
- He is not entitled to anything.

RULE IF THE FINDER IS A USUFRUCTUARY:

a. If the finder is in possession of the property as a
usufructuary and he discovered the hidden treasure
by chance:
- The usufruct-finder is entitled to one-half (½)
of the value thereof. (Art. 566, NCC). The
other half belongs to the naked owner. ACCESSION IS NOT A MODE OF ACQUIRING
OWNERSHIP:
b. If the finder is a third person and he found the hidden - Art. 712, NCC, enumerates 7 modes of acquiring
treasure by chance in the property under usufruct: ownership. Accession is not included. The reason is
- The third person will not get anything as he that accession presupposes an existing ownership of
is considered a stranger who is not the an owner over the principal thing to which the
owner of the property where the discovery accession is dependent.
was made. The finder gets one-half (½) and - Accession is a right already included implicitly in the
the other and the other half belongs to the ownership without which it will have no basis for its
naked owner of the property. existence. It id one of the attributes and the right to
accession is automatic, ipso jure. (Villanueva vs.
MEANING OF “BY CHANCE”: Claustro, 23 Phil. 54
- This simply means that the finder had not intention to
search for the treasure. (Pineda (2009), p. 113) ARTICLE 44 (NCC) IS NOT APPLICABLE TO FORESHORE
- As long as there is no agreement between the owner LAND ADJACENT TO THE SEA:
of the property and the finder for the search of the
SPS. GULLA vs. HEIRS OF ALEJANDRO LABRADOR
trasure, “by chance” and “by good luck” do not make GR no. 149418, July 27, 2006
any difference. (Supra)
The trial court, the RTC and the CA were one in ruling that the 562-
RULE IF FINDER IS A MARRIED PERSON: square-meter property, Lot A, is part of the public domain, hence,
- if the finder is a married person ! He gets one-half of beyond the commerce of men and not capable of registration. In
the treasure or its value, and his spouse is entitled to fact, the land is within the salvage zone fronting the China Sea as
well as the property covered by OCT No. P-13350 in the name of
share one-half of that share (or ¼ of the entire value)
respondents. The provision relied upon is Article 440 of the New
it being a conjugal property. (Art. 117 (4), FC) Civil Code, which states that "[t]he ownership of property gives the
right by accession to everything which is produced thereby, or
CONCEPT OF TREASURE HUNTING: which is incorporated or attached thereto, either naturally or
- It refers to the searching for treasure based on an artificially." The provision, however, does not apply in this case,
express arrangement with the owner of the land or considering that Lot A is a foreshore land adjacent to the sea which
property. The parties are governed by the 1993 is alternately covered and left dry by the ordinary flow of the tides.
Guideline on Treasure-Hunting. Such property belongs to the public domain and is not available for
private ownership until formally declared by the government to be
no longer needed for public use. Respondents thus have no
RIGHT OF ACCESSION possessory right over the property unless upon application, the
government, through the then Bureau of Lands, had granted them
a permit.
DEFINITION OF “RIGHT OF ACCESSION”:
- Refers to the right of ownership of which an owner of There is no question that no such permit was issued or granted in
a thing has over the products of said thing, as well as favor of respondents. This being the case, respondents have no
cause of action to cause petitioners' eviction from the subject
to all things inseparably attached or incorporated
property. The real party-in-interest to file a complaint against
thereto whether naturally or artificially. (Pineda (2009), petitioners for recovery of possession of the subject property and
p. 116) cause petitioner's eviction therefrom is the Republic of the
Philippines, through the Office of the Solicitor General.
Consequently, petitioners cannot be required to pay any rentals to
respondents for their possession of the property.

ACCESSION IS DIFFERENT FROM ACCESSORY:

ACCESSION ACCESSORY

26 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- The offspring of two animals which belong to
Refers to the fruits of, or Refers to the things joined to, or
addition to, or improvements included with, the principal different owners belongs to the owner of the female
upon a principal thing. thong for the latter’s animal.
embellishment, better use, or - Basis:
completion. - Legal presumption that the calf belongs to
the owner of its mother, in the absence of
Not necessary to the principal Accessory and the Principal any proof to the contrary, by right of
thing thing must go together. accretion. (US vs. Caballero, 25 Phil. 356;
Source: De Leon (2011), Property, p. 134) Siari Valley Estate vs. Lucasan, 97 Phil. 987)

REIMBURSEMENT TO THIRD PERSON:

Accession Discreta - He who receives the fruits has the obligation to pay
the expenses made by a third person in their
production, gathering, and preservation. (Art. 443,
PRELIMINARY MATTERS:
NCC)
- Accession Discreta refers to the right to the fruits.
MEANING OF “THIRD PERSON”:
KINDS OF FRUITS:
- the third person is different from the landowner and
NATURAL INDUSTRIAL CIVIL from the builder, planter or sower, who are the
FRUITS: FRUITS: FRUITS: principal parties in accession.

Spontaneous Produced by lads The rents of buildings,

the price of leases of ILLUSTRATION:
products of the soil, of any kind
and the young and lands and other
through property and the “A” planted coconuts on the vast land of “B”. When the coconuts
other products of
cultivation or amount of perpetual or started to bear fruits, “A” engaged the services of “C”, a third
animals. life annuities or other
labor. person, to gather the fruits and to store them for manufacture of
similar income. copra. “C” got the manpower to perform the work and incurred
expense. Before “C” could be paid for the expenses he incurred in
Ex: Common grass, Ex: Cultivated Ex: Chattel the gathering and prevention of the fruits, “B” took possession of
mushrooms, Calves, vegetables, Palay, mortgage, Rents, the land and got the fruits.
Puppies Fruits of any Fruit- Contract of Lease,
Bearing tree planted by
man
Dividends Under Art. 443 (NCC), it is only just and proper that “B”be obliged
to pay the expenses of “C”, the third person.
Source: Art. 442, NCC; (US vs. Caballero, 25 Phil. 356

WHAT ARE CONSIDERED NATURAL OR INDUSTRIAL NO CONFLICT BETWEEN ART. 443 AND ART. 449, NCC:
FRUITS? - If the term third person will be read to include a
- Only such as are manifest or born are considered as builder, planter or sower, conflict will arise between
natural or industrial fruits. With respect to animals, it At. 443, NCC and Art. 449, NCC. However, simple
is sufficient that they are in the womb of the mother, terms, there will be no conflict whatever between the
although unborn. (Art. 444, NCC) two Articles.

RIGHT TO THE FRUITS (ACCESSION DISCRETA): EXCEPTION TO ARTICLE 443, NCC (THE RULE ON
- Gen. Rule: To the owner of the thing belongs the (a) “REIMBURSEMENT TO THIRD PERSON”):
Natural Fruits; (b) Industrial Fruits; and Civil Fruits. - He who builds, plants or sows in bad faith on the
(Art. 441, NCC) land of another, loses what is built, planted or sown
- Exception: without right to indemnity. (Art. 449, NCC)
1. Antichresis - the fruits pertain to the
antichretic creditor, with the obligation to TIME WHEN FRUITS ARE CONSIDERED TO EXIST:
apply the fruits to the payment of the PERENNIAL ANNUAL FRUITS YOUNG OF
interests firsts, if any is owing; otherwise, to FRUITS ANIMALS
the principal. (Art. 2132, NCC)
2. Lease - In a contract of lease of lands which Exist when they Exist from the Sufficient that
yield fruits, it is the lessee who gets the physically appear moment their they are
fruits, unless otherwise agreed upon. on the trees. seedlings appear or subsisting in the
3. Usufruct - the usufructuary is entitled to the sprout from the
womb of the dam.
fruits. (Art. 566, NCC) ground.
4. Possessor in Good Faith - such possessor is
entitled to the fruits received before the
possessor is legally interrupted in the
possession. (Art. 544, par. 1, NCC) Accession Continua
5. Property donated and subject to collation
- the Fruits thereof will belong to the estate PRELIMINARY MATTERS:
from the day the succession opened. (Art. - Sec. 2, Chapter 2,, Title II, Book II of the New Civil
1075, NCC) Code deals with Accession Continua.
- It comprehends Accession Industrial (Arts. 445-456,
OWNERSHIP OF AN ANIMAL OFFSPRING WHEN ITS NCC), and Accession Natural (Arts. 457-465, NCC)
PROGENITORS (MALE AND FEMALE ANIMALS) BELONGS which consists of alluvion, avulsion, change of course
TO DIFFERENT OWNERS: of rivers, and formation of islands.

PROPERTY, OWNERSHIP AND ITS MODIFICATION 27

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Accession Continua refers to the right to what has EXCEPTION (ART. 120, FC):
been attached or incorporated. - The ownership of improvements, whether for utility or
adornment, made on the separate property of the
CERTAIN BASIC PRINCIPLES IN ACCESSION CONTINUA: spouses at the expense of the partnership or through
1. Accession Follows The Principal: the acts or efforts of either or both spouses shall
- The owner of the latter acquires the pertain to the conjugal partnership, or to the original
ownership of the former. With respect to owner-spouse, subject to the following rules:
accession relating to immovables, the land
is usually the principal. (Arts. 447-448, 454, “When the cost of the improvement made
NCC). With respect to accession involving by the conjugal partnership and any resulting
movables, the law provides rules for increase in value are more than the value of the
determining which is the principal. (Art. 467 property at the time of the improvement, the entire
& 468, NCC) property of one of the spouses shall belong to the
2. Incorporation or Union Must Be Intimate: conjugal partnership, subject to reimbursement of the
- It must be such that removal or separation value of the property of the owner-spouse at the time
cannot be effected without substantial injury of the improvement; otherwise, said property shall be
to either or both. retained in ownership by the owner-spouse, likewise
3. Effect of Good Faith and Bad Faith: subject to reimbursement of the cost of the
- Generally, a person who acts in bad faith improvement.
has no rights. He may also be held liable for
damages. (Art. 447-455, NCC). In either case, the ownership of the entire
- However, a person (whether in good faith or property shall be vested upon the reimbursement,
bad faith) is entitled to reimbursement for which shall be made at the time of the liquidation of
necessary expenses of preservation (Art. the conjugal partnership.” (Art. 120, Family Code)
452, NCC) as well as expenses for
cultivation, gathering, and preservation. (Art.
CALTEX (Phil) INC. vs. FELIAS
443, NCC) 108 Phil. 873
4. Effect Where both Parties In Bad Faith:
- Bad faith of one party neutralizes the bad FACTS: Using conjugal funds, husband and wife built a house in a
faith of the other. Where the parties are lot belonging to the parents of the wife. Thereafter, the parents of
equally in bad faith, they shall both be the wife donated the said lot ot the latter.
considered as being in good faith (Art. 453,
NCC). ISSUE: Who owns the lot and the improvements?
- where the landowner and the builder, planter
RULING: The ot is praphernal (exclusive property) of the wife and is
or sower are both in good faith or bad faith, not conjugal property. When the building was constructed, the lot
neither party may demand as a matter of belonged to the parents by accession under the principle that the
right the removal of the improvements accessory follows the principal. When the llot was donated, the
against the will of the other. (Art. 447, 449- building is deemed included in the donation.
450, 453-455, ncc)
5. Principle Against Unjust Enrichment: Note: It would be different if the building was constructed after the
- The right of the owner of land to acquire donation was made, in which case, Art. 120, FC would apply.
what is built, planted, or sown with the
materials of another is subject to the CONCEPT OF BUILDING, PLANTING, SOWING:
obligation to pay their value (Art. 447, NCC);
and if the materials belong to a third person, BUILDING: PLANTING: SOWING:
the owner shall answer subsidiarily for their
value unless he exercises his right of Act of erecting a Act of setting into Act of scattering
removal. (Art. 455, NCC). structure or the soil or land seed over or spreading of
construction of any or seedlings of trees germinated seeds
- the builder, planter, or sower (although in
kind intended for such as coconuts, indiscriminately but
bad faith), is entitled to reimbursement for residential, office, mangoes, bananas, evenly through hand
the necessary expenses of preservation of social, commercial apples, etc. or mechanical
the land. (Art. 452, NCC) or other purposes. device into a
prepared land.

I. Accession As to Immovable Property Source: Philippine Sugar Estate Development vs. Poizat, 48
Phil. 536)

Accession Industrial RIGHTS WHERE THE LAND AND MATERIALS BELONG TO

DIFFERENT OWNERS:
- The owner of the land who makes thereon, personally
GENERAL RULES ON ACCESSION INDUSTRIAL: or through another, plantings, constructions or works
- Whatever is built, planted or sown on the land of with the materials of another, shall pay their value;
another and the improvements or repairs made and, if he acted in bad faith, he shall also be obliged
thereon, belong to the owner of the land, subject to to the reparation of damages. The owner of the
the provisions of the following articles. (Art. 445, materials shall have the right to remove them only in
NCC) case he can do so without injury to the work
- All works, sowing, and planting are presumed made constructed, or without the plantings, constructions
by the owner and at his expense, unless the contrary or works being destroyed. However, if the landowner
is proved. (Art. 446, NCC) acted in bad faith, the owner of the materials may

28 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

remove them in any event, with a right to be sale or otherwise for “where the true owner himself is
indemnified for damages. (Art. 447, NCC) the builder of works on his own land, the issue of
good faith or bad faith is entirely irrelevant.” (PNB vs.
RIGHTS AND LIABILITIES OF THE LANDOWNER WHO De Jesus, 411 SCRA 557)
USED THE MATERIALS OF ANOTHER: 2. Lessee or a tenant because such a person does not
claim or pretend to claim any ownership over the
ACTED IN GOOD FAITH ACTED IN BAD FAITH land. Beside, his rights are governed by Art.
1678,NCC. (Rivera vs. Trinidad, 48 Phil. 396)
Becomes the owner of the Becomes the owner of the
3. When the landowner is also the builder, planter or
materials but reimburse the material but must reimburse the
owner of the materials. owner of the materials and sower. (Coleongco vs. Regalado, 92 Phil. 2187)
indemnify the latter for
However, the owner of the damages. RATIONALE OF ART. 448, NCC:
material can remove the - Considering that the builder, planter or sower and the
materials if it can be done landowner are both in good faith, there is a conflict of
without injuring the principal rights between them. Whose right will prevail? Being
land. both in good faith, it becomes necessary to protect
them both without causing injustice to either.
RIGHTS AND LIABILITIES OF THE OWNER OF MATERIALS Because of the impracticability of creating a state of
WHO ACTED IN GOOD FAITH: forced co-ownership, the law has provided a solution
more just and equitable. (Bernardo vs. Bataclan, 37
IF LANDOWNER ACTED IN IF LANDOWNER ACTED IN OG. 74)
GOOD FAITH BAD FAITH
SPECIAL CASES WHEN ART. 448 WAS APPLIED BEYOND
Owner of the material is entitled Owner of the material is entitled THE RECOGNIZED AND LIMITED DEFINITION OF GOOD
to; (a) To indemnification for FAITH:
(a) Reimbursement for the damages; and
value of the materials; or (b) To remove the materials MACASAET vs. MACASAET
(b) To remove the materials it without injuring the GR no. 154391, September 30, 2004
can be done without principal thing
injuring the principal thing When a person builds in good faith on the land of another, the
applicable provision is Article 448, which reads:

RIGHTS AND LIABILITIES OF THE OWNER OF MATERIALS "Article 448. The owner of the land on which anything has
WHO ACTED IN BAD FAITH: been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or
IF LANDOWNER ACTED IN IF LANDOWNER ALSO planting, after payment of the indemnity provided for in
GOOD FAITH ACTED IN BAD FAITH Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who
Owner of the materials shall pay Landowner and Owner of the sowed, the proper rent. However, the builder or planter
damages without right of Material shall both be treated as cannot be obliged to buy the land if its value is
removal. good faith. (Art. 453, NCC) 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
ARTICLE 448 OF THE NEW CIVIL CODE: trees after proper indemnity. The parties shall agree upon
- The owner of the land on which anything has been the terms of the lease and in case of disagreement, the
built, sown or planted in good faith, shall have the court shall fix the terms thereof.”
right to appropriate as his own the works, sowing or
This Court has ruled that this provision covers only cases in which
planting, after payment of the indemnity provided for the builders, sowers or planters believe themselves to be owners of
in articles 546 and 548, or to oblige the one who built the land or, at least, to have a claim of title thereto. It does not
or planted to pay the price of the land, and the one apply when the interest is merely that of a holder, such as a mere
who sowed, the proper rent. However, the builder or tenant, agent or usufructuary. From these pronouncements, good
planter cannot be obliged to buy the land if its value faith is identified by the belief that the land is owned; or that -- by
is considerably more than that of the building or some title -- one has the right to build, plant, or sow thereon.
trees. In such case, he shall pay reasonable rent, if
However, in some special cases, this Court has used Article 448 by
the owner of the land does not choose to appropriate
recognizing good faith beyond this limited definition. Thus, in Del
the building or trees after proper indemnity. The Campo v. Abesia, this provision was applied to one whose house --
parties shall agree upon the terms of the lease and in despite having been built at the time he was still co-owner --
case of disagreement, the court shall fix the terms overlapped with the land of another. This article was also applied to
thereof. (Art. 448, NCC) cases wherein a builder had constructed improvements with the
consent of the owner. The Court ruled that the law deemed the
APPLICABILITY OF ARTICLE 448, NCC: builder to be in good faith. In Sarmiento v. Agana, the builders were
- Article 448 applies only if there is good faith on the found to be in good faith despite their reliance on the consent of
another, whom they had mistakenly believed to be the owner of the
part of the landowner and on the part of the builder,
land.
planter, or sower. (Geminiano vs. CA, 259 SCRA 344)
- It also refers to builder, planter or sowers who believe Based on the aforecited special cases, Article 448 applies to the
themselves to be owners of the land or, atleast, to present factual milieu. The established facts of this case show that
have a claim of title thereto. (Carrascoso, Jr. vs. CA, respondents fully consented to the improvements introduced by
477 SCRA 666) petitioners. In fact, because the children occupied the lots upon
their invitation, the parents certainly knew and approved of the
NON-APPLICABILITY OF ARTICLE 448, NCC: construction of the improvements introduced thereon. Thus,
petitioners may be deemed to have been in good faith when they
1. Where the owner of the land is the builder, planter or
built the structures on those lots.
sower who then later loses ownership of the land by

PROPERTY, OWNERSHIP AND ITS MODIFICATION 29

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

The instant case is factually similar to Javier v. Javier. In that case, But as Kee is a layman not versed in the technical
this Court deemed the son to be in good faith for building the description of his property, he had to find a way to
improvement (the house) with the knowledge and consent of his ascertain that what was described in TCT No. 69561
father, to whom belonged the land upon which it was built. Thus, matched Lot 8. Thus, he went to the subdivision
Article 448 was applied. developer's agent and applied and paid for the relocation
of the lot, as well as for the production of a lot plan by
CTTEI's geodetic engineer. Upon Kee's receipt of the
REMEDIES WHEN BUILDER, PLANTER, OR SOWER FAILS map, his wife went to the subdivision site accompanied
TO PAY VALUE OF THE LAND: by CTTEI's employee, Octaviano, who authoritatively
1. The parties may decide to leave things as they are declared that the land she was pointing to was indeed
and assume the relation of lessor and lessee; and Lot 8. Having full faith and confidence in the reputation of
CTTEI, and because of the company's positive
should they disagree as to the amount of the rental,
identification of the property, Kee saw no reason to
they can go to the court for the fixing of that amount.
suspect that there had been a misdelivery. The steps Kee
(Miranda vs. Fadullon, 97 Phil. 80); had taken to protect his interests were reasonable. There
2. The owner of the land is entitled to have the building was no need for him to have acted ex-abundantia
removed if after he had chosen to sell the land (where cautela, such as being present during the geodetic
value is not considerably more) to the builder or engineer's relocation survey or hiring an independent
planter, the latter failed to pay. If the parties cannot geodetic engineer to countercheck for errors, for the final
agree on the price, the court will fix the price and the delivery of subdivision lots to their owners is part of the
period of payment. (Ignacio vs. Hilario, 76 Phil. 605; regular course of everyday business of CTTEI. Because
of CTTEI's blunder, what Kee had hoped to forestall did
Grana vs. CA, 109 Phil. 260); and
in fact transpire. Kee's efforts all went to naught.
3. The land and improvements may be sold at public
auction, applying the proceeds thereof to the Good faith consists in the belief of the builder that the land he is
payment of the value of the land and the excess, if building on is his and his ignorance of any defect or flaw in his title.
any, to be delivered to the owner of the improvement And as good faith is presumed, petitioner has the burden of proving
in payment thereof. (Bernard vs. Bataclan, Supra; bad faith on the part of Kee.
Filipinas Colleges, inc. vs. Garcia Timbang, 106 Phil.
247) At the time he built improvements on Lot 8, Kee believed that said
lot was what he bought from petitioner. He was not aware that the
lot delivered to him was not Lot 8. Thus, Kee's good faith.
GOOD FAITH: Petitioner failed to prove otherwise.

CONCEPT OF GOOD FAITH: To demonstrate Kee's bad faith, petitioner points to Kee's violation
- A person is deemed a possessor in good faith who is of paragraphs 22 and 26 of the Contract of Sale on Installment.
not aware that there exists in histitle or mode of
acquisition any flaw which invalidates it. (Art. 526, We disagree. Such violations have no bearing whatsoever on
whether Kee was a builder in good faith, that is, on his state of
NCC)
mind at the time he built the improvements on Lot 9. These alleged
violations may give rise to petitioner's cause of action against Kee
GOOD FAITH IS ALWAYS PRESUMED: under the said contract (contractual breach), but may not be bases
- Good faith is always presumed, and upon him who to negate the presumption that Kee was a builder in good faith.
alleges bad faith on the part of the possessor rests
the burden of proof. (Art. 527, NCC)
GEMINIANO vs. CA
GR no. 120303, July 24, 1996
PLEASANTVILLE DEVELOPMENT CORP. vs. CA
GR no. 79688, February 1, 1996
The Court is confronted with the issue of which provision of law
governs the case at bench: Article 448 or Article 1678 of the Civil
Petitioner contends that the Court of Appeals erred in reversing the
Code?The crux of the said issue then is whether the private
RTC's ruling that Kee was a builder in bad faith. Petitioner fails to
respondents are builder in good faith or mere lessees.
persuade this Court to abandon the findings and conclusions of the
Court of Appeals that Kee was a builder in good faith. We agree
The private respondents claim they are builders in good faith,
with the following observation of the Court of Appeals:
hence, Article 448 of the Civil Code should apply. They rely on the
lack of title of the petitioners' mother at the time of the execution of
”The roots of the controversy can be traced directly to
the contract of lease, as well as the alleged assurance made by the
the errors committed by CTTEI, when it pointed the
petitioners that the lot on which the house stood would be sold to
wrong property to Wilson Kee and his wife. It is highly
them.
improbable that a purchaser of a lot would knowingly and
willingly build his residence on a lot owned by another,
It has been said that while the right to let property is an incident of
deliberately exposing himself and his family to the risk of
title and possession, a person may be lessor and occupy the
being ejected from the land and losing all improvements
position of a landlord to the tenant although he is not the owner of
thereon, not to mention the social humiliation that would
the premises let. After all, ownership of the property is not being
follow.
transferred, only the temporary use and enjoyment thereof.
Under the circumstances, Kee had acted in the manner
In this case, both parties admit that the land in question was
of a prudent man in ascertaining the identity of his
originally owned by the petitioners' mother. The land was allegedly
property. Lot 8 is covered by Transfer Certificate of Title
acquired later by one Maria Lee by virtue of an extrajudicial
No. T-69561, while Lot 9 is identified in Transfer
foreclosure of mortgage. Lee, however, never sought a writ of
Certificate of Title No. T-106367. Hence, under the
possession in order that she gain possession of the property in
Torrens system of land registration, Kee is presumed to
question. The petitioners' mother therefore remained in possession
have knowledge of the metes and bounds of the property
of the lot.
with which he is dealing. . . .
It is undisputed that the private respondents came into possession
xxx xxx xxx

30 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

of 126 square-meter portion of the said lot by virtue of contract of when he hired a surveyor, following his purchase of another
lease executed by the petitioners' mother as lessor, and the private adjoining lot, to survey all his newly acquired lots. Upon being
respondents as lessees, is therefore well-established, and carries apprised of the encroachment, petitioner immediately offered to
with it a recognition of the lessor's title. The private respondents, as buy the area occupied by its building — a species of conduct
lessees who had undisturbed possession for the entire term under consistent with good faith.
the lease, are then estopped to deny their landlord's title, or to
assert a better title not only in themselves, but also in some third In the second place, upon delivery of the property by Pariz
person while they remain in possession of the leased premises and Industries, as seller, to the petitioner, as buyer, the latter acquired
until they surrender possession to the landlord. This estoppel ownership of the property. Consequently and as earlier discussed,
applies even though the lessor had no title at the time the relation petitioner is deemed to have stepped into the shoes of the seller in
of lessor and lessee was created, and may be asserted not only by regard to all rights of ownership over the immovable sold, including
the original lessor, but also by those who succeed to his title. the right to compel the private respondent to exercise either of the
two options provided under Article 448 of the Civil Code.
Being mere lessees, the private respondents knew that their
occupation of the premises would continue only for the life of the
lease. Plainly, they cannot be considered as possessors nor BAD FAITH:
builders in good faith.
CONCEPT OF BAD FAITH:
It must be stressed, however, that the right to indemnity under - A person is deemed in bad faith who is aware that
Article 1678 of the Civil Code arises only if the lessor opts to there exists in his title or mode of acquisition any flaw
appropriate the improvements. Since the petitioners refused to
exercise that option, the private respondents cannot compel them
which invalidates it. (Art. 526, par. 2, NCC)
to reimburse the one-half value of the house and improvements. - It is understood that there is bad faith on the part of
Neither can they retain the premises until reimbursement is made. the landowner whenever the act was done with his
The private respondents' sole right then is to remove the knowledge and without opposition on his part. (Art.
improvements without causing any more impairment upon the 453, par. 2, NCC)
property leased than is necessary.

BAD FAITH ON THE

BAD FAITH ON THE
TECNOGAS PHILIPPINES vs. CA BUILDER, PLANTER OR
LANDOWNER
GR no. 108894, February 10, 1997 SOWER

Recall that the encroachment in the present case was caused by a There is bad faith whenever the There is bad faith when he
very slight deviation of the erected wall (as fence) which was act of building, planting or knowingly built, planted and
supposed to run in a straight line from point 9 to point 1 of sowing was done with his sowed on the land not
petitioner's lot. It was an error which, in the context of the knowledge and made no belonging to him and without
attendant facts, was consistent with good faith. Consequently, the opposition thereto. (Art. 453, the authority of the landowner.
builder, if sued by the aggrieved landowner for recovery of par. 2, NCC) (Arts. 526-527, NCC)
possession, could have invoked the provisions of Art. 448 of the
Civil Code, which reads: ”The owner of the land on which anything
has been built, sown or planted in good faith, shall have the right to BUILDER, PLANTER OR SOWER IN BAD FAITH (Art. 499,
appropriate as his own the works, sowing or planting, after NCC):
payment of the indemnity provided for in articles 546 and 548, or to - He who builds, plants or sows in bad faith on the
oblige the one who built or planted to pay the price of the land, and land of another, loses what is built, planted or sown
the one who sowed, the proper rent. However, the builder or without right to indemnity. (Art. 449, NCC)
planter cannot be obliged to buy the land if its value is considerably
- The builder, planter or sower in bad faith is entitled to
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 reimbursement for the necessary expenses of
appropriate the building or trees after proper indemnity. The parties preservation of the land. (Art. 452, NCC)
shall agree upon the terms of the lease and in case of - A builder, planter or sower in bad faith, may own the
disagreement, the court shall fix the terms thereof. The obvious materials used in the building, planting or sowing.
benefit to the builder under this article is that, instead of being Nonetheless, he is in bad faith because he knew he
outrightly ejected from the land, he can compel the landowner to does not own the land, and that he had no right to
make a choice between the two options: (1) to appropriate the use the land, nor the right to build, plant or sow
building by paying the indemnity required by law, or (2) sell the land
something on it. (Ysrael vs. Madrid, 45 PG 2177;
to the builder. The landowner cannot refuse to exercise either
option and compel instead the owner of the building to remove it Pineda (2009), p. 150)
from the land.”
EXCEPTION TO ART. 449, NCC:
The question, however, is whether the same benefit can be invoked - Although in bad faith, the builder, planter or sower is
by petitioner who, as earlier stated, is not the builder of the entitled to reimbursement for necessary expenses of
offending structures but possesses them as buyer. We answer preservation of the land under Art. 452,NCC.
such question in the affirmative.

In the first place, there is no sufficient showing that petitioner was LUMUNGO vs. USMAN
aware of the encroachment at the time it acquired the property GR no. L-25359, September 28, 1968
from Pariz Industries. We agree with the trial court that various
factors in evidence adequately show petitioner's lack of awareness FACTS: In the case at bar, the Court of Appeals found as a fact
thereof. In any case, contrary proof has not overthrown the that when Dominga Usman sold and transferred her rights in and to
presumption of good faith under Article 527 of the Civil Code, as the property in question to Jose Angeles "the latter made the
already stated, taken together with the disputable presumptions of purchase with the knowledge that the property subject matter of
the law on evidence. These presumptions state, under Section 3 (a) the sale was already in dispute by and between herein defendants,
of Rule 131 of the Rules of Court, that the person is innocent of a one of whom is the husband of intervenor Dominga Usman, on the
crime or wrong; and under Section 3 (ff) of Rule 131, that the law one hand, and herein plaintiffs on the other." Angeles was,
has been obeyed. In fact, private respondent Eduardo Uy himself therefore, aware of sufficient facts to induce a reasonably prudent
was unaware of such intrusion into his property until after 1971 man to inquire into the status of the title to the property in question,

PROPERTY, OWNERSHIP AND ITS MODIFICATION 31

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

sower, the owner of the property just the same would
which was an easy matter for him to ascertain, said property being
registered under the Torrens System. In short, Jose Angeles was a be spending for the preservation of his property.
purchaser and a builder in bad faith when he planted thereon about Otherwise, his property will be ruined, destroyed or
3,000 coconuts, most of which are now fruit-bearing. lost. (Pineda (2009), p. 155)
- Examples:
ISSUE: W/N Angeles is entitled to reimbursement for the coconuts 1. A fishpond where a person in bad faith
trees he planted on the property in litigation. released fingerlings in it for his personal
benefit, caused the reconstruction of the
RULING: In this connection, it should be noted that said trees are
dikes to preserve the fishpond, must be
improvements, not "necessary expenses of preservation," which a
builder, planter or sower in bad faith may recover under Arts. 452
reimbursed for the expenses he incurred;
and 546, first paragraph, of the Civil Code. The provision applicable 2. If he paid the land taxes due on the fishpond
to this case is, accordingly, Article 449 of the Civil Code, which to prevent its sale by the government for
provides that, "(h)e who builds, plants or sows in bad faith on the non-payment of taxes, he must also be
land of another, loses what is built, planted or sown without right to reimbursed for said expenses, for in
indemnity.” essence, the taxes preserve the property
from alienation.
Obviously, the alleged equity in favor of Jose Angeles, on which the
lower courts have relied, cannot prevail over the aforementioned
express statutory provision to the contrary, apart from the fact that
WHEN THE LANDOWNER AND THE BUILDER, PLANTER
he who seeks equity must come with clean hands. OR SOWER ARE BOTH IN BAD FAITH:
- If there was bad faith, not only on the part of the
person who built, planted or sowed on the land of
EFFECT WHEN LANDOWNER DOES NOT INSIST TO another, but also on the part of the owner of such
APPROPRIATION FOR HIMSELF THE IMPROVEMENTS: land, the rights of one and the other shall be the
- If the landowner does not insist on his right to same as though both had acted in good faith. (Art.
appropriate the improvements, the builder or planter 453, par. 1, NCC)
may remove the improvements provided no injury will
be suffered by the land. (Pineda (2009), p. 152)
MUNICIPALITY OF OAS vs. ROA
GR no. L-2017, November 24, 1906
RIGHTS OF THE LANDOWNER WHEN THE BUILDER,
PLANTER OR SOWER IS IN BAD FAITH: Defendant Roa was allowed to construct a building on the land
- The owner of the land on which anything has been belonging to the Municipality of Oas which used to be a part of the
built, planted or sown in bad faith may demand the public plaza. The defendant admitted in writing that he knew that
demolition of the work, or that the planting or sowing the land is owned by the Municipality and that the person from
be removed, in order to replace things in their former who, he bought the property did not own the land. The Municipality
condition at the expense of the person who built, did not oppose the construction made by Roa.
planted or sowed; or he may compel the builder or
The Court both held the parties in bad faith. Their right must,
planter to pay the price of the land, and the sower the
therefore, be determined as if both acted in good faith. Art. 448,
proper rent. (Art. 450, NCC) NCC shall apply
- the landowner is entitled to damages from the
builder, planter or sower. (Art. 451, NCC)
PURCHASER IN BAD FAITH:
CONSEQUENCES WHEN BUILDER IS AN ENEMY - A person who purchased a land, knowing that a
COUNTRY WHICH OCCUPIED THE COUNTRY IN A WAR: building was constructed thereon in good faith by a
third person, and he paid for the price of the land
CLAUDINA VDA. DE VILLARUEL vs. only but not of the construction, has placed himself in
MANILA MOTORS CO., INC.
a position of a landowner who acted in bad faith.
GR no. L-10394, December 13, 1958
(Gongon vs. Tiangco, 36 OG, 822)
An airfield was built or set upon private land by the japanese Army
in the Philippines during World War II. It was held that the airfield WHEN THE LANDOWNER IS IN BAD FAITH BUT THE
belongs to the Republic of the Philippines Philippines and not to BUILDER, PLANTER OR SOWER IS IN GOOD FAITH:
the owner of the land. The Japanese Army cannot be considered a - When the landowner acted in bad faith and the
possessor in bad faith as to make the airfield the property of the builder, planter or sower proceeded in good faith, the
landowner by industrial accession. international law allows the provisions of article 447 shall apply. (Art. 454, NCC)
temporary use by the enemy occupant of private lands and
buildings for all kinds of purposes demanded by the necessities of
war. (Republic vs. Lara, 96 Phil. 170). The Japanese Armey can WHEN THE OWNER OF THE MATERIALS BELONGS TO A
even disturb the possessions of lessees of buildings. The THIRD PERSON WHO ACTED IN GOOD FAITH
disturbance is rightful and not that of a mere trespasser. (OBLIGATION OF THE LANDOWNER):
- Gen. Rule: If the materials, plants or seeds belong to
a third person who has not acted in bad faith, the
NECESSARY EXPENSES FOR PRESERVATION MUST BE owner of the land shall answer subsidiarily for their
REIMBURSED WHETHER THE BUILDER, PLANTER OR value and only in the event that the one who made
SOWER IS IN BAD FAITH OR NOT: use of them has no property with which to pay. (Art.
- The builder, planter or sower in bad faith is entitled to 455, par. 1, NCC)
reimbursement for the necessary expenses of - Exception: This provision shall not apply if the owner
preservation of the land. (Art. 452, NCC) makes use of the right granted by article 450. If the
- Art. 452, NCC, directs the reimbursement to the owner of the materials, plants or seeds has been paid
builder, planter, sower of the expenses he incurred by the builder, planter or sower, the latter may
which are necessary for the preservation of the demand from the landowner the value of the
property. The reason for this is that even if nothing materials and labor. (Art. 455, par. 2, NCC)
was built, planted or sown by the builder, planter or

32 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

in every year is imperceptible in nature, one
GOOD FAITH DOES NOT NECESSARILY EXCLUDE could not discern it but can be measured
NEGLIGENCE: after the lapse of a certain time. (Agustin vs.
- In the cases regulated in the preceding articles (Arts. IAC, 187 SCRA 18)
447 to 455,NCC), good faith does not necessarily
exclude negligence, which gives right to damages 2. The accretion results from the effects or action of
under article 2176. (Art. 456, NCC) the current of the waters of the river; and
- The word “current” indicates the
participation of the body of water in the ebb
Accession Natural
and flow of waters due to high and low tide.
Therefore, alluvion must be the exclusive
I. ALLUVIUM: work of nature and not made artificially by
the riparian owner. The increase or accretion
CIVIL CODE PROVISION: which in a latent, incessant and
- To the owners of lands adjoining the banks of rivers spontaneous manner is received by the land
belong the accretion which they gradually receive from the natural effects of the current
from the effects of the current of the waters. (Art. deposition, in the course of time, sediments
457, NCC) and alluvial matter along the shore, must be
- The owners of estates adjoining ponds or lagoons do the work of nature. (Cortez vs. City of
not acquire the land left dry by the natural decrease Manila, 1- Phil. 567; Sioin Enterprise vs. FF
of the waters, or lose that inundated by them in Cruz, 500 SCRA 406)
extraordinary floods. (Art. 458, NCC)
REPUBLIC vs. CA
DEFINITION OF ALLUVION: GR no. L-61647, October 12, 1984
- It is the increment which lands abutting rivers
gradually receive as a result of the current of the It is preposterous to believe that almost four (4) hectares of
waters, or the gradual and imperceptible addition to land came into being because of the effects of the
the banks of rivers. (De Leon (2011), Property. p. 174) Meycauayan and Bocaue rivers. The lone witness of the
private respondents who happens to be their overseer and
whose husband was first cousin of their father noticed the four
ALLUVION DISTINGUISHED FROM ACCRETION: hectare accretion to the twelve hectare fishpond only in 1939.
ALLUVION ACCRETION The respondents claim that at this point in time, accretion had
already taken place. If so, their witness was incompetent to
testify to a gradual and imperceptible increase to their land in
Refers to the deposit of soil Refers to the act or process by
the years before 1939. However, the witness testified that in
or to the soil itself. which a riparian land gradually
that year, she observed an increase in the area of the original
and imperceptibly receives
fishpond which is now the land in question. If she was telling
addition made by the water to
the truth, the accretion was sudden. However, there is
which the land is contiguous.
evidence that the alleged alluvial deposits were artificial and
man-made and not the exclusive result of the current of the
Alluvion is brought about by Used to mean the addition or Meycauayan and Bocaue rivers.
accretion. increase received by the land.
The alleged alluvial deposits came into being not because of
the sole effect of the current of the rivers but as a result of the
DEFINITION OF A RIPARIAN OWNERS: transfer of the dike towards the river and encroaching upon it.
- These are owners of lands adjoining the banks of The land sought to be registered is not even dry land cast
rivers. (Heirs of Navarro vs. IAC, 268 SCRA 74) imperceptibly and gradually by the river’s current on the
fishpond adjoining it. It is under two meters of water. The
DEFINITION OF A LITTORAL OWNERS: private respondents’ own evidence shows that the water in
the fishpond is two meters deep on the side of the pilapil
- These are the owners of lands bordering the shore of
facing the fishpond and only one meter deep on the side of
the sea or lake or other tidal waters. (Heirs of Navarro the pilapil facing the river.
vs. IAC, 268 SCRA 74)

REQUISITES OF ALLUVION OR ACCRETION: 3. The land where accretion takes place must be
1. The deposit or accumulation of soil or sediment adjacent to the bank of a river. (Office of the City
must be gradual and imperceptible; Mayor vs. Ebio, 621 SCRA 555)
- When the boundary between two estates is - Art. 457 deals with accessions of lands
a river or a stream, the bed of which situated on banks of rivers but not on the
belongs to neither of them, the gradual seashore. (Pascual vs. Angeles, 13 Phil.
increase of one side is for the benefit thereof 441). Lands added to the shores by
and does not prejudice the property on the accretion and alluvial deposits caused by
opposite side because in accordance with the action of the sea form part of the public
Art. 457, the owner of adjoining estate domain. (Yacapin vs. cfi, 67 SCRA 18)
increased by alluvium acquires title thereto - Laguna de Bay is a lake and that part
by accretion. (Roxas vs. Tuason, 9 Phil. 408) around it which becomes covered with
- This requisite is present where the “Cagayan water 4 or 5 months a year, not due to tidal
River did move year by year from 1919 to action but due to rain, cannot be considered
1968” or for a period of 49 years and within as part of the bed or basin of the Bay nor as
this period,” the alluvium deposited has foreshore lands, and therefore, registrable
caused “the original lands of the plaintiffs to under the Torrens System. (Republic vs. CA,
become greater in area”, and “the addition 131 SCRA 532)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 33

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- When an island has been formed in a river from the effect of the current become the
(Cagayan River), and a grant for the part of property of the owners of the banks. (CN
the island is obtained from the State Hodges vs. garcia, 109 Phil. 133; Viajar vs.
accretion added thereto in the course of CA, 168 SCRA 405)
time belongs to the owner of that portion of 2. In case of increase of Area:
the island to which it is added. The island - Alluvion does not automatically becomes
must be treated as if it were mainland. registered land, just because the lot which
(Banatao vs. Dabbay, 38 Phil. 612) receives such accretion is covered by a
Torrens Title, thereby making the alluvial
ELEMENTS OF RIVER AND THEIR OWNERSHIP: property imprescriptible. (Heirs of Navarro
- A river is a compound consisting of (1) running vs. IAC, 268 SCRA 74)
watters; (2) the river bed; and (3) the river banks. (Art. - Ownership of a piece of land is one thing;
420(1), NCC) 2
registration under the Torrens System of
- Since a river is but one compound concept, it should that ownership is another. Ownership over
have only one nature (it should either be totally public the accretion received by the land adjoining
or completely private). And since rivers, whether a river is governed by the Civil Code.
navigable or not, are of public dominium, it is implicit Imprescriptibility of registered land is
that all the three component elements be of the same provided in the registration law.
nature also. (Hilario vs. City of Manila, 19 SCRA 931;
Binalay vs. Manalo, 195 SCRA 374) ESTATES ADJOINING PONDS OR LAGOONS:
- The owners of estates adjoining ponds or lagoons do
REASONS FOR ALLUVION: not acquire the land left dry by the natural decrease
1. To compensate him for the danger of loss or of the waters, or lose that inundated by them in
diminution that he suffers because of the location of extraordinary floods. (Art. 458, NCC)
his land (for estates bordering on rivers are exposed
to floods and other damage produced by the II. AVULSION:
destructive force of the waters;
2. To compensate him for the encumbrances and CIVIL CODE PROVISION:
various kinds of easements to which his property is - Whenever the current of a river, creek or torrent
subject; and segregates from an estate on its bank a known
3. To promote the interests of agriculture for the riparian portion of land and transfers it to another estate, the
owner is in the best position to utilize the accretion. owner of the land to which the segregated portion
(Republic vs. CA, 132 SCRA 514; Agustin vs. IAC, belonged retains the ownership of it, provided that he
187 SCRA 218; Ferrer vs. Bautista, 231 SCRA 257) removes the same within two years. (Art. 459, NCC)
- Trees uprooted and carried away by the current of
ALLUVION CAUSED BY ARTIFICIAL WORKS: the waters belong to the owner of the land upon
- A riparian owner cannot acquire the addition to his which they may be cast, if the owners do not claim
land caused by special works (eg. dikes) expressly them within six months. If such owners claim them,
intended by him to bring about accretion (ie. for they shall pay the expenses incurred in gathering
reclamation purposes) and not to protect his property them or putting them in a safe place. (Art. 460, NCC)
from the destructive force of the waters of the river.
(Republic vs. CA, Supra) DEFINITION OF AVULSION:
- However, where the accreted land had been formed - It is the accretion which takes place when the current
gradually due to the effect of the water current of the of a river, creek or torrent segregates from an estate
creek, the riparian owner may invoke the benefit of on its bank a known portion and transfers it to
alluvion to support his claim of title thereto. The fact another estate on its bank a known portion and
that the fish traps set up in the creek might have transfers it to another estate, in which case, the
slowed down its current, and might have been owner of the state to which the segregate portion
brought about or caused accretion, will not affect his belonged, retains the ownership thereof. (De Leon
ownership, in the absence of evidence, to show that (2011), Property, p. 185)
the setting up of erection of the fish traps was
expressly intended to cause or bring about the AVULSION IS DIFFERENT FROM ALLUVION:
accretion. (Zapata vs. Director of Lands, 6 SCRA
335) ALLUVION AVULSION

Refers to the gradual deposit of Refers to the sudden or abrupt

ACCRETIONS AFFECTING LANDS REGISTERED UNDER
soil deposit of soil
THE TORRENS SYSTEM:
1. In case of Diminution of Area: Deposit of the soil belongs to The owner of the property from
- Accretions under Art. 457, NCC are natural the owner of the property where which a part was detached
incidents to land bordering on running rivers the same was deposited. retains the ownership thereof
or streams and are not affected by the
registration law. The soil cannot be identified The detached portion can be
- Registration does not protect the riparian identified
owner against diminution of the area of his
Source: Agustin vs. IAC, 187 SCRA 218)
land through gradual changes in the course
of the adjoining stream. Accretions which
REQUISITES OF AVULSION:
the banks of rivers may gradually receive
1. The segregation and transfer must be caused by
the current of a river, creek,or torrent:
2 See further discussion under Title IV - Waters

34 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Suppose a known portion of land is remove it as soon as possible and within 2 years. (De
transferred from one estate to another by Leon (2011), Property, p. 189)
other forces of nature than the current of a
river, such as when land from a mountain TREES UPROOTED AND CARRIED AWAY BY THE
slope rolls down to another estate by reason CURRENT:
of an earthquake, will Art. 459 apply? - Trees uprooted and carried away by the current of
Annotated authority has opined that in the the waters belong to the owner of the land upon
absence of an express provision on the which they may be cast, if the owners do not claim
matter, Article 459 can be applied by them within six months. If such owners claim them,
analogy. (Tolentino, Book II, p. 122) they shall pay the expenses incurred in gathering
2. The segregation and transfer must be sudden or them or putting them in a safe place. (Art. 460, NCC)
abrupt; and
- In a case, the evidence conclusively showed III. CHANGE OF RIVER COURSE:
that prior to or about the year 1888 the
parcels of lans in questioned formed an CIVIL CODE PROVISION:
integral part of the Payatas Estate and that - River beds which are abandoned through the natural
in that year and subsequent years owing to change in the course of the waters ipso facto belong
the sudden and marked changes in the to the owners whose lands are occupied by the new
course of the San Mateo River, the parcels course in proportion to the area lost. However, the
were separated from the main part of the owners of the lands adjoining the old bed shall have
Payatas Estate and were transferred to the right to acquire the same by paying the value
another side of the river. It was held that thereof, which value shall not exceed the value of the
said parcels still belonged to the Payatas area occupied by the new bed. (Art. 462, NCC)
Estate, pursuant to Art. 459, NCC.(Martinez - Whenever a river, changing its course by natural
vs. Municipality of San Mateo, 6 Phil. 3) causes, opens a new bed through a private estate,
- In the absence of evidence as to whether this bed shall become of public dominion. (Art. 463,
the change in the course of a river was NCC)
caused by accretion and erosion (alluvion) or - Whenever the current of a river divides itself into
whether it had occurred through avulsion, branches, leaving a piece of land or part thereof
the presumption is that the change was isolated, the owner of the land retains his ownership.
gradual and was caused by alluvion. He also retains it if a portion of land is separated from
(Payatas Estate Improvement vs. Tuason, 53 the estate by the current. (Art. 463, NCC)
Phil. 55).
3. The portion of land transported must be known or CHANGE OF RIVER BED; ABANDONMENT:
identifiable: - If due to forces of nature (floods, earthquakes, etc.) a
- In avulsion,the detached portion must be river changed its usual course and occupied the land
known or at least, identifiable. The law of another creating therein a new river bed and
contemplates mass of earth suddenly leaving the oldbed dry, the owner of the invaded land
transferred from one estate to another and becomes the owner of the old bed in proportion to
removable by the original owner. Even if the the area he lost. However, the government has the
detached portion be placed on top of right and power to revert back the course of the new
another land instead of being adjoined to it, river to its original location. (Panlilio vs. Mercado, 44
Art. 459 is still applicable as long as it an be Phil. 695)
identified as coming from the estate from
which it was detached. (Art. 463, NCC) RATIONALE OF ART. 461, NCC:
- If only is remove by the water and spread - To compensate for the loss of the land occupied by
over another’s land such that no known the new bed. It is more equitable to compensate the
portion can be said to exist which can be actual losers than to add land to those who have lost
removed, there is no avulsion. The latter nothing. (Pineda (2009), p. 175)
acquires ownership by right of accretion.
NON-APPLICABILITY OF ARTICLE 461, NCC:
REASONS FOR CLAUSE ON REMOVAL: - Art. 461, NCC will not apply if the river has branched
1. The segregated portion is usually very small and it is out and created new courses without however
thus useless to the original owner of the land from abandoning the river bed.
which it originated and which is generally far from the
other hand; OWNERS OF THE AFFECTED LANDS MAY UNDERTAKE
2. The principle involved is similar to that underlying Art. THE REVERSION OF THE RIVER TO ITS ORIGINAL
460 (NCC) whereby the owner of uprooted trees must COURSE:
claim them within 6 months; - The owners can secure a permit for the purpose of
3. If the owner if the separated portion retains his reverting a river to its original course from the
ownership without any qualification, he would have a Secretary of Public Works; but the work must be
right to enter the other estate at any time, and this commerce within 2 years from the change of the
easement, aside from preventing the owner of the course of the river or stream.(Art. 58, par. 2, PD 1067)
latter estate from enjoying his property, may create
ill-feeling between them; and RIGHT OF THE RIPARIAN OWNERS TO THE ABANDONED
4. After a time the transferred portion may become RIVER BED:
permanently attached, physically speaking to the - The law allows the riparian owners whose lands
other land; the original owner should, therefore, adjoin the abandoned river bed, to reimburse the
owners of the lands intruded by the changing course

PROPERTY, OWNERSHIP AND ITS MODIFICATION 35

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

of the river for the value of the land lost by the latter, i. It belongs to the nearest riparian owner or
which value shall not be more than the actual value of owner of the margin or bank nearest to it as
the property lost. This is allowed in the interest of he is considered in the best position to
agriculture for the riparian owners are in the best cultivate and develop the island. (Art.
position to utilize the old river bed as it is adjacent to 457,NCC). However, if the riparian owner
their property. fails to assert his claim thereof, the same
- If the one who lost property is also a riparian owner, may yield to the adverse possession of third
then he can refuse any offer of reimbursement parties,as indeed even accretion to land
because as riparian owner he is also in a position to titled under the Torrens System must itself
cultivate or develop the old river bed which is be registered.
bordering his property. ii. The island is divided longitudinally in halves,
if it is in the middle of the river (Banatao vs.
NEW RIVER BEDS BECOME PROPERTY OF PUBLIC Dabbay, 38 Phil. 612). If the island formed is
DOMINION: longer than the property of the riparian
- Whenever a river, changing its course by natural owner, the latter is deemed ipso jure to be
causes, opens a new bed through a private estate, the owner of that portion of his property
this bed shall become of public dominion. (Art. which corresponds to the length of that
462,NCC) portion of his property along the margin of
the river. (Jagualing vs. CA, 194 SCRA 607)
EFFECTS OF ABANDONMENT OF THE SUBSEQUENT OR iii. If a new island is formed between an
NEW RIVER BED: existing island and an opposite bank, the
- The new river bed may itself be abandoned, due to owner of the older island is considered a
natural causes or artificial causes authorized by law. riparian owner together with the owner of
In such eventuality, said owners will get back this the lad adjoining the bank for the purpose of
previous property if the course of the river reverts determining ownership of the island under
back to its original place. (Sanchez vs. Pascual, 11 Art. 465, NCC.
Phil. 395)
CONCEPT OF NAVIGABLE RIVER:
CONSEQUENCES WHEN A RIVER DIVIDES ITSELF INTO - It refers to one which forms in its ordinary condition
BRANCHES: by itself or by uniting with other waters a continuous
1. Some parts of the original estate may be isolated but highway over which commerce is or may be carried
remaining steady and secure on their location; on. (Webster’s Dictionary, p. 1509)
2. Other parts may be separated and pushed away from - The rule of civil law is that a navigable river is one
the original estate. that is “floatable”, that is, a river admitting floats.
Thus, a floatable stream is considered a navigable
- In either case, the owner retains his ownership over stream. (Macatangay vs. Secretary of Public Works,
the properties. 17 SCRA 31)

IV. FORMATION OF ISLANDS:

II. Accession As to Movable Property
CIVIL CODE PROVISION:
- Islands which may be formed on the seas within the I. ADJUNCTION OR CONJUNCTION:
jurisdiction of the Philippines, on lakes, and on
navigable or floatable rivers belong to the State. (Art. CIVIL CODE PROVISION:
464, NCC) - Whenever two movable things belonging to different
- Islands which through successive accumulation of owners are, without bad faith, united in such a way
alluvial deposits are formed in non-navigable and that they form a single object, the owner of the
non-floatable rivers, belong to the owners of the principal thing acquires the accessory, indemnifying
margins or banks nearest to each of them, or to the the former owner thereof for its value. (Art. 466, NCC)
owners of both margins if the island is in the middle
of the river, in which case it shall be divided CONCEPT OF ADJUNCTION OR CONJUNCTION:
longitudinally in halves. If a single island thus formed - Refers to a process whereby two movable things
be more distant from one margin than from the other, owned by different persons are joined together
the owner of the nearer margin shall be the sole without bad faith, in such a way that they form a
owner thereof. (Art. 465, NCC) single object.

RULES REGARDING OWNERSHIP OF ISLANDS FORMED OWNERS OF THE RESULTING OBJECT:

THROUGH ALLUVION: - Gen. Rule: The resulting object shall belong to the
a. If formed: owner of the principal thing.
i. On the seas within jurisdiction of the - Condition: He has the obligation to indemnify the
Philippines ! the island belongs to the State owner of the accessory ofr the value of the latter’s
as part of its patrimonial property. thing.
ii. On lakes ! the island belongs to the State
as part of its patrimonial property. ILLUSTRATION:
iii. On navigable or floatable rivers ! the island “A” owns a car which needed repainting. In good faith
belongs to the State as part of its there was a mixed-up of paint containers, some belonging to “B”.
patrimonial property. “A” by honest mistake, made use of the paint of “B” in repainting
b. If formed in non-navigable and non-floatable his (“A”) car. Adjunction thus arose.
rivers:

36 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

“A” who is the owner of the principal thing (car) will be
the owner of the paint used but with the obligation to pay “B” for
the value thereof.

GOOD FAITH IS NECESSARY IN ADJUNCTION:

- If the owner of the principal thing acted in bad faith,
Art. 466 will not apply. Instead Art. 470, par. 2, will
operate.

CLASSES OF ADJUNCTION OR CONJUNCTION:

1. Escritura (Writing) - such as writing a poem on
papers belonging to another. The papers will pertain
to the writer.
2. Inclusion - such as setting a precious stone on a
golden ring. The stone will pertain to the owner of the
- The stone is mounted as an ornament to the ring.
ring.
3. Pintura (Painting) - such as painting a scenic view
SECONDARY FACTORS TO DETERMINE PRINCIPAL AND
on a canvass belonging to another. The cavas will
ACCESSORY:
pertain to the painter.
1. The one which has greater value shall be considered
4. Soldering - such as joining a piece of metal to
as the principal;
another metal of same kind belonging to a different
2. If they happen to be of equal value, then the one with
owner. This is feruminatio, the objects of the same
greater volume shall be considered as the principal.
metal. If the metals are of different kinds, the process
is called plumbatura. The object will belong to the
Illustration:
owner of the principal as determined under Art. 467
a. Cement and sand belonging to different owners were
or 468, NCC.
mixed to make hollow-blocks for building purposes.
5. Weaving - such as making a baby dress using
If the cement utilized is higher in price than the sand
threads belonging to another. The dress will pertain
used, the cement shall be the principal and the sand,
to the weaver who owns the cloth.
the accessory.
b. If the cement and the sand were of same value or
Note: In all these cases, the owner of the principal, who by law price, then the principal shall be the one which is of
becomes the owner of the resulting object, will indemnify the owner greater volume. If there is more sand used than the
of the accessories for the values thereof. cement, the latter is the accessory and the former the
principal.
PRINCIPAL THING AND THE ACCESSORY:
- The principal thing, as between two things SPECIAL CRITERIA IN PAINTING, SCULPTURE,
incorporated, is deemed to be that to which the other WRITINGS, ETC.:
has been united as an ornament, or for its use or - In painting and sculpture, writings, printed matter,
perfection. (Art. 467, NCC) engraving and lithographs, the board, metal, stone,
- If it cannot be determined by the rule given in the canvas, paper or parchment shall be deemed the
preceding article which of the two things accessory thing. (Art. 468, par. 2, NCC)
incorporated is the principal one, the thing of the
greater value shall be so considered, and as between RULE WHEN THREE OR MORE MOVABLES ARE
two things of equal value, that of the greater volume. INVOLVED IN ADJUNCTION:
(Art. 468, par. 1, NCC) - When there are more than 2 movables incorporated
together, the principal must be determined. Once it is
PRIMARY FACTORS TO DETERMINE THE PRINCIPAL determined, the rest must be considered as all
AND THE ACCESSORY: accessories. Only one principal must come out to
1. The thing which is incorporated to another thing as avoid confusion in the determination of the ownership
an ornament is the accessory. The other is the of the resulting thing.
principal.
2. The thing to which is added to or joined to another Illustration:
for the use or perfection of the latter is the accessory. - Special hollow blocks were made out of gravel, sand,
The other is the principal. iron and cement belonging to different owners. The
rules in Articles 467-468 must be applied to
Illustration: determine which of the four things shall be
considered the principal. The rest will be merely
accessories.

SEPARATION WITHOUT INJURY:

- Whenever the things united can be separated without
injury, their respective owners may demand their
separation. (Art. 469, par. 1, NCC)
- Example: A radio belonging to someone is set in a
car belonging to another. The radio can be removed
from the car without injury. The owner of the radio
can demand its separation from the car.

PROPERTY, OWNERSHIP AND ITS MODIFICATION 37

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

WHEN SEPARATION WITH INJURY IS ALLOWED - When by accident or other fortuitous event, movables
(EXCEPTION TO THE ABOVE RULE): separately pertaining to two or more persons are
- In case the thing united for the use, embellishment or commingled or confused, the rules on co-ownership
perfection of the other, is much more precious than shall be applicable. (Art. 2170, NCC)
the principal thing, the owner of the former may
demand its separation, even though the thing to RULES ON MIXTURE:
which it has been incorporated may suffer some 1. Mixture by will of the owners:
injury. (Art. 469, par. 2, NCC) - Their rights shall be first governed by their
stipulations. In the absence of any
Illustration: stipulation, each owner acquires a right or
- If a golden ring worth P5,000.00 has a mounted interest in the mixture in proportion to the
diamond worth P100,000.00, the owner of the value of his material as in co-ownership.
accessory (diamond) may demand the separation of (Art. 485, NCC)
the stone from the ring even if the ring will suffer 2. Mixture caused by an owner in good faith or by
injury. This is premised on the proposition that both chance: The share of each owner shall also be
owners acted in good faith. More, the adjunction proportional to the value of the part which belonged
must be by inclusion or soldering which are the only to him. (Art. par. 1, NCC). There is no accession in
forms where separation is possible. mixture since there is neither a principal nor
- It is but just and logical that the expenses of accessory.
separation shall be borne by the owner of the thing a. If things mixed are exactly of the same kind
who caused the incorporation. (Pineda (2009), p. 184) and quality ! there is no conflict of rights
and all that is needed to do is to divide the
CONSEQUENCES WHEN THE OWNER OF THE mixture equally or proportionally by the
ACCESSORY ACTED IN BAD FAITH: different owners.
- Whenever the owner of the accessory thing has b. If the things mixed can be separated without
made the incorporation in bad faith, he shall lose the injury ! their respective owners may
thing incorporated and shall have the obligation to demand their separation. The expenses
indemnify the owner of the principal thing for the incident to separation shall be borne by all
damages he may have suffered. (Art. 470, par. 1, the owners in proportion to their respective
NCC) interests in the mixture. (Note: that good
faith does not necessarily exclude
CONSEQUENCES WHEN THE OWNER OF THE PRINCIPAL negligence which gover right to damages.
IS ACTING IN BAD FAITH: The owner of the accessory has Art. 456, NCC)
the right to demand either of the following: 3. Mixture caused by an owner in bad faith:
a. The payment of the value of the accessory thing with - the actor not only forfeits the thing
damages; or belonging to him but also becomes liable to
b. The separation of the accessory thing from the pay indemnity for the damages caused to
principal, even though the principal would be the owner. (Art. 473, par. 2, NCC)
destroyed plus damages. (Art. 470, par. 2, NCC) 4. Mixture made with the knowledge and without the
objection of the other owner:
ABSENCE OF OBJECTION TO THE INCORPORATION: - Their respective rights shall be determined
- If either one of the owners has made the as though both acted in good faith. (Apply
incorporation with the knowledge and without the Art. 470,par. 3, NCC)
objection of the other, their respective rights shall be
determined as though both acted in good faith. (Art.
470, par. 3, NCC) SANTOS vs. BERNABE
GR no. L-31163, November 6, 1929
WAYS OF PAYING INDEMNITY: FACTS: On March 20, 1928, there were deposited in Jose C.
1. Delivery of a thing similar in kind and value and in all Bernabe's warehouse by the plaintiff Urbano Santos 778 cavans
other respects, of that thing used or incorporated by and 38 kilos of palay and by Pablo Tiongson 1,026 cavans and 9
the other party. (Art. 471, NCC) kilos of the same grain. Pablo Tiongson filed with the Court of First
2. Payments of the price as appraised by experts in Instance of Bulacan a complaint against Jose C. Bernabe, to
case the parties cannot stipulate on the price. recover from the latter the 1,026 cavans and 9 kilos of palay
Sentimental value shall be considered. (Art. 475, deposited in the defendant's warehouse. At the same time, the
application of Pablo Tiongson for a writ of attachment was granted,
NCC)
and the attachable property of Jose C. Bernabe, including 924
cavans and 31 1/2 kilos of palay found by the sheriff in his
II. MIXTURE; warehouse, were attached, sold at public auction, and the
proceeds thereof delivered to said defendant Pablo Tiongson, who
CLASSES OF MIXTURE: obtained judgment in said case.

CONFUSIO COMMIXTIO The plaintiff-appellee Urbano Santos contends that Pablo Tiongson
cannot claim the 924 cavans and 31 ½ kilos of palay attached by
When liquids belonging to When solid mattes are mixed by the defendant sheriff as part of those deposited by him in Jose C.
different owners got mixed by agreement or by chance. Bernabe's warehouse, because, in asking for the attachment
agreement or by chance thereof, he impliedly acknowledged that the same belonged to
Jose C. Bernabe and not to him.

CO-OWNERSHIP ARISES WHEN THE THINGS MIXED ARE ISSUE: What is the extend of Santos’ right to said attached palay
OF DIFFERENT KINDS OR QUALITY: or the value thereof?

38 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

1. To appropriate the work to himself
RULING: The 778 cavans and 38 kilos of palay belonging to the
plaintiff Urbano Santos, having been mixed with the 1,026 cavans
without paying the maker; or
and 9 kilos of palay belonging to the defendant Pablo Tiongson in 2. To demand the value of the
Jose C. Bernabe's warehouse; the sheriff having found only 924 material plus damages.
cavans and 31 1/2 kilos of palay in said warehouse at the time of - Exception: In case the value of the work (for
the attachment thereof; and there being no means of separating artistic or scientific reasons) is considerably
form said 924 cavans and 31 1/2 of palay belonging to Urbano more than that of the material, the owner of
Santos and those belonging to Pablo Tiongson, the following rule the material cannot invoke the first option (to
prescribed in article 472 of the Civil Code for cases of this nature, is
appropriate the work to himself without
applicable.
paying the maker). The rationale is that the
The number of kilos in a cavan not having been determined, we will said option prevents unjust enrichment of
take the proportion only of the 924 cavans of palay which were the owner of the materials at the expense of
attached and sold, thereby giving Urbano Santos, who deposited the maker.
778 cavans, 398.49 thereof, and Pablo Tiongson, who deposited 3. Person made use of material of another with the
1,026 cavans, 525.51, or the value thereof at the rate of P3 per consent and without objection of the latter: Their
cavan. rights shall be determined as though they both acted
in good faith. (Apply Art. 470, par. 3, NCC)
III. SPECIFICATION:

CIVIL CODE PROVISIONS:

- One who in good faith employs the material of SENTIMENTAL VALUE:
another in whole or in part in order to make a thing of
a different kind, shall appropriate the thing thus CONCEPT OF SENTIMENTAL VALUE:
transformed as his own, indemnifying the owner of - It refers to the value placed by the owner on the
the material for its value. property is more than the actual value by reason of
- If the material is more precious than the transformed some sentiments like love, affection, respect and
thing or is of more value, its owner may, at his option, honor. (Pineda (2009), p. 190)
appropriate the new thing to himself, after first paying
indemnity for the value of the work, or demand APPRECIATION OF SENTIMENTAL VALUE:
indemnity for the material. - In the preceding articles, sentimental value shall be
- If in the making of the thing bad faith intervened, the duly appreciated. (Art. 475, NCC)
owner of the material shall have the right to - in the adjudication of moral damages, the sentimental
appropriate the work to himself without paying value of property, real or personal, may be
anything to the maker, or to demand of the latter that considered. (Art. 2218, NCC)
he indemnify him for the value of the material and the
damages he may have suffered. However, the owner
Quieting of Title
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. (Art. CONCEPT OF QUIETING OF TITLE (ACTION FOR
474, NCC) QUIETING OF TITLE OR TO REMOVE A CLOUD ON A
TITLE):
CONCEPT OF SPECIFICATION: - It is a proceeding in equity, the purpose of which is
- It means the giving of a new form to a material the declaration of the invalidity of a claim on a title or
belonging to another person through the application the invalidity of an interest in property adverse to that
of labor or industry. The material used is transformed of the plaintiff, and thereafter to free the plaintiff and
into another thing or changed in identity. all those claiming under him from any hostile claim
- Example: Mango Fruit = Mango Juice; Grapes = thereon. (Pineda (2009), p. 191)
Wine
NATURE OF THE ACTION OF QUIETING OF TITLE OR TO
RULES GOVERNING SPECIFICATION: REMOVE CLOUD ON A TITLE:
1. Person made use of material of another in good - These suits are quasi in rem. Not action in rem nor
faith: suits in personam. (Realty Sales Enterprises vs. IAC,
- Gen. Rule: The worker becomes the owner 154 SCRA 328)
of the new thing but he must indemnify the - An action for quieting of title is a remedy which may
owner (also in good faith) of the material for be availed of only when by reason of any instrument,
its value. record, claim, encumbrance or proceeding, which
- Exception: If the material is more precious appears valid but is (in fact) invalid, ineffective,
or of more value than the new thing, the voidable or unenforceable, a cloud is thereby cast on
owner of the material may choose the the complainant’s title to real property or any interest
following: therein. (Heirs of Enrique Diaz vs. Virata, 498 SCRA
1. To appropriate the new thing to 141)
himself but must pay for the value
of the work or labor; or ONLY REAL PROPERTY COULD BE THE SUBJECT
2. To demand indemnity for the MATTER IF QUIETING OF TITLE:
material. - In an action to quiet title, the plaintiffs or
2. Person made use of material of another in bad complainants claim must demonstrate a legal or an
faith: equitable title to, or an interest in the subject
- Gen. Rule: The owner of the materials has property, and that they must show that the deed,
the following options: claim or encumbrance or proceeding that purportedly

PROPERTY, OWNERSHIP AND ITS MODIFICATION 39

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

casts a cloud on their title is in fact invalid or b. Such instrument, etc., is (in truth and in fact) invalid,
inoperative despite its prima facie appearance of in effective, voidable, or unenforceable (despite its
validity or legal efficacy. (Secuya vs. Vda. de Selma, prima facie appearance of validity or legal efficacy),
326 SCRA 244) or has been extinguished or terminated, or has been
barred by extinctive prescriptive. (Art. 478, NCC); and
CIVIL CODE PROVISION: c. Such instrument, etc., may be prejudicial to said title.
- Whenever there is a cloud on title to real property or (Tolentino, Book II, P.152)
any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is INSTANCES OF CLOUD OF TITLE:
apparently valid or effective but is in truth and in fact a. An absolute fictitious concept of sale or a sale with
invalid, ineffective, voidable, or unenforceable, and simulated consideration;
may be prejudicial to said title, an action may be b. A sale by an agent without written authority or after
brought to remove such cloud or to quiet the title. expiration of his authority;
- This refers to a remedial action to remove c. A forged contract;
cloud on title or to quiet the title. (Bautista d. A contract of sale or donation which has become
vs. Exconde, 70 Phil. 398) inoperative because of non-performance by the
- An action may also be brought to prevent a cloud vendee or donee of a condition precedent. (Art. 1181,
from being cast upon title to real property or any NCC); and
interest therein. (Art. 476, NCC) e. A voidable contract (such as under Art. 1330,or Art.
- This refers to a prevent or precautionary 1326, NCC).
action to prevent a future cloud on being
cast upon the title to real property or any RULES ON PRESCRIPTION OF AN ACTION TO QUIET
interest therein. TITLE:
a. When Plaintiff is in Possession:
DISTINCTION BETWEEN ACTION FOR QUIETING OF - An action to quiet title brought by a person
TITLE AND ACTION FOR REMOVAL OF CLOUD: who is in possession of the property is
imprescriptible. (Mendoza vs. Navarette, 214
BASIS ACTION TO QUIET ACTION TO
SCRA 337)
TITLE REMOVE CLOUD
- Rationale: One who is in actual possession
of a piece of land claiming to be the owner
Purpose To put an end to To procure the
vexatious litigation in cancellation, release of
thereof may wait until his possession is
respect to the property an instrument, disturbed or his title is attacked before
concerned. encumbrance or claim in taking steps to vindicate his right ! the
the plaintiff’s title - which reason for the rule being that his
affects the title or undisturbed possession gives him a
enjoyment of the continuing right to seek the aid of a court of
property.
equity to ascertain and determine the nature
of the adverse claim of third party and its
Nature Plaintiff asserts his own Plaintiff declares his own
claim and declares that claim and title, and at the
effect on his own title, which right can be
the claim of the time indicates the source claimed only by one who is in possession.
defendant is unfounded and nature of the (Alino vs. Heirs of Lorenzo, 556 SCRA 139)
and calls on the defendant’s claim, b. When Plaintiff is Not in Possession:
defendant to justify his pointing its defects and - If the plaintiff is not in a possession of the
claim on the property prays for the declaration property, he must invoke his remedy within
that the same may be of its invalidity. the proper prescriptive period of 10 or 30
determined by the
years depending on ordinary or
court.
extraordinary prescription. (Gallar vs.
Hussain, 20 SCRA 186; Arts. 1134, 1137,
REQUISITES FOR AN ACTION TO QUIET TITLE: NCC)
1. The plaintiff has a legal or an equitable title to, or - In addition to the action to quiet to quiet
interest in, the real property subject of the action. title, the plaintiff who is not in possession
(Art. 477, NCC); and may also bring an action for ejectment, or to
2. The defendant claims an interest therein adverse to recover the better right of possession, or to
the plaintiff arising from an instrument. the deed, recover ownership limitation governing such
claim, or proceeding claimed to be invalid or action. (Gallar vs. Hussain, Supra)
inoperative despite its prima facie appearance of
validity or legal efficacy. (Calcala vs. Republic, 464 CONCEPT OF LACHES:
SCRA 438) - Laches is failure or neglect, for an unreasonable
length of time to assert a right, warranting a
MEANING OF CLOUD IN THE TITLE: presumption that the party entitled to assert it has
- A semblance of title, legal or equitable, or a claim or a abandoned or declined to assert it. (San Miguel
right in real property, appearing in some legal form Corp., vs. Cruz, 31 SCRA 819)
but which is, in fact, invalid or unfounded, or which - Although the action to quiet title is brought within the
would be inequitable to enforce. (Iglesia ni Cristo vs. period of limitations, it may be barred by laches
Ponferrada, 505 SCRA 828) whose essence is the doctrine of estoppel. (Art.
1431, 1433, 1437, NCC)
REQUISITES FOR EXISTENCE OF CLOUD:
a. There is an instrument, record, claim, encumbrance INDISPENSABLE REQUIREMENT FOR ACTION TO QUIET
or proceeding which is apparently valid or effective; TITLE:

40 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- In addition with the requirement under Art. 476 - Whenever a large tree threatens to fall in such a way
(NCC), the plaintiff must have legal or equitable title as to cause damage to the land or tenement of
to, or interest in the real property which is the subject another or to travelers over a public or private road,
matter of the action. He need not be in possession of the owner of the tree shall be obliged to fell and
said property. (Art. 477, NCC) remove it; and should he not do so, it shall be done
at his expense by order of the administrative
TWO CASES WHEN ACTION TO QUIET TITLE IS authorities. (Art. 483, NCC)
ALLOWED:
1. When the contract, instrument, or other obligation
Title III - CO-OWNERSHIP
has been extinguished, or has terminated, as where
the right of the defendant to the property has been
extinguished by the happening of a condition
subsequent. (Art. 478, NCC); and CONCEPT OF CO-OWNERSHIP
a. Eg. Donation of land shall be cancelled upon
failure of donee municipality to built a school DEFINITION OF CO-OWNERSHIP:
house thereon within a certain period) - There is co-ownership whenever the ownership of an
2. When the contract, instrument or other obligation has undivided thing or right belongs to different persons.
been barred by extinctive prescription, as where the (Art. 484, par. 1, NCC)
plaintiff has possessed in bad faith the property
publicly, adversely, and uninterruptedly for 30 years. CONCEPT OF CO-OWNERSHIP
(Supra) - Co-ownership is the ownership of two or more
persons over a thing or right which had not been
RESTORATION OF BENEFITS RECEIVED BY PLAINTIFF: physically divided between, or by and among them.
- The plaintiff must return to the defendant all benefits The moment there is a physical division of the
he may have received from the latter, or reimburse property where the shares of the co-owner had been
him for expenses that may have redounded to the concretely determined, co ownership ceases.
plaintiff's benefit. (Art. 479, NCC) (Eusebio vs. IAC, 144 SCRA 1541; Sanchez vs. CA,
404 SCRA 540)
PRINCIPLES OF GENERAL LAW APPLICABLE:
- The principles of the general law on the quieting of REQUISITES OF CO-OWNERSHIP:
title are hereby adopted insofar as they are not in 1. Plurality of owners - there must be at least two or
conflict with this Code. (Art. 480, NCC) more persons.
- In case of irreconcilable conflicts between the Civil 2. Unity of the Object - the thing (object) is not yet
Code provisions and Principles of the General Law divided materially and the co-owners are tied up to
on Quieting of Title, the Civil Code provisions shall one another because of this unity.
prevail. (Art. and Art. 17, NCC) 3. Recognition of the Ideal Shares of the Co-Owners
- each co-owner’s right must be limited only to his
PROCEDURE FOR PURSUING CASES FOR QUIETING OF ideal share of the physical whole.
TITLE:
- The principles of the general law on the quieting of RULES THAT GOVERN CO-OWNERSHIP:
title are hereby adopted insofar as they are not in 1. By Contracts;
conflict with this Code. (Art. 481, NCC) 2. By Special Provisions; and
3. By the rule of co-ownership under Title III, Book II of
CONCEPT OF ACTION FOR RECONVEYANCE: the New Civil Code. (Art. 484, par. 2, NCC)
- An action for quieting of title is equivalent to an
action for reconveyance of title wrongfully or HOW CO-OWNERSHIP IS ESTABLISHED (SOURCES OF
erroneously registered in another’s name. (Premiere CO-OWNERSHIP)?
Development Bank vs. CA, 453 SCRA 630) 1. By Contract;
- An action for reconveyance is an action in personam - When two or more persons agreed to obtain
(filed in the ordinary courts of justice and not with the an undivided property to be owned by them
land registration court) available to a person whose pro-indiviso. (Gallemit vs. Tabiliran, 20 Phil.
property has been wrongfully registered under the 241)
Torrens System in another’s name. (Heirs of Eugenio 2. By Law;
Lopez, Sr. vs. Enriquez, 449 SCRA 173) - When the law declares the existence of co-
ownership.
Ruinous Buildings and Trees in Danger of Falling - Examples:
- When a man and a woman live
together without the benefit of
RULE ON RUINOUS BUILDINGS AND TREES IN DANGER marriage under Art. 147 of the
OF FALLING: Family Code under which they
- If a building, wall, column, or any other construction become co-owners of properties
is in danger of falling, the owner shall be obliged to acquired by them during their
demolish it or to execute the necessary work in order coverture.
to prevent it from falling. (Art. 482, par. 1, NCC) - A party wall )a kind of forced co-
- If the proprietor does not comply with this obligation, ownership)
the administrative authorities may order the 3. By Succession;
demolition of the structure at the expense of the - When a deceased who died intestate left
owner, or take measures to insure public safety. (Art. inheritance, his heirs become ipso facto co-
482, par. 2, NCC)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 41

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

owners of the estate until the actual partition
NCC)
thereof. (Art. 1078, NCC)
4. By Occupation; Disposition of Co-owner may A partner cannot
- When two or more persons have seized a Share dispose of his share dispose of his share
res nullius thing like a whale in the ocean. without the consent of and substitute the
(Art. 713, NCC) the others - except buyer/assignee in his
5. By Chance; when personal rights place without the
- When by mixture or confusion of two or are involved. (Art. 493, consent of the others.
more movable things belonging to different NCC) (Arts. 1804; 1813,
NCC)
persons, the resulting ting will be owned in
co-ownership. (Arts/ 472-473, NCC);
Representatio Generally, there is no Generally, there is
- The discovery of hidden treasure by chance n mutual representation. mutual representation
by someone who is not the owner of the Exception: When a co- (Art. 1818, NCC),
land or property where found, the finder and owners files a suit for unless otherwise
the land or property owner become co- ejectment, the rest are stipulated.
owners of the hidden treasure. (Art. 438, represented. (Art. 487,
NCC) NCC)

CO-OWNERSHIP DISTINGUISHED FROM JOINT Period of Agreement to exist in No limit is fixed by law.
Existence co-ownership for not However, it is
OWNERSHIP:
more than 10 years is dissolution by the
BASIS CO-OWNERSHIP JOINT valid (Art. 494, NCC). happening of certain
This is subject to contingencies. (Arts.
OWNERSHIP
extension by a new 1830-1831, NCC)
agreement.
Extent of Each co-owner owns Each joint-tenant and
Ownership only his ideal share on all of them own the
Effect of Death or incapacity of Death of a partner
the whole property. whole property.
death a co-owner does not dissolves the
dissolve the co- partnership. (Art. 1830
Right to Each co-owner may Each joint-tenant ownership. The (3), NCC)
dispose share dispose of his ideal cannot dispose of his deceased will be
share without the own share without the represented by his
consent of the others. consent of all the estate or heirs in the
others. co-ownership.

Effect of The share of a co- The share of a joint-

Death owner descends to his tenant goes or CO-OWNERSHIP DISTINGUISHED FROM CONJUGAL
estate. accrues to the other PARTNERSHIP OF GAINS (CPG):
joint-tenants.
CONJUGAL
Prescription Prescription runs Prescription does not BASIS CO-OWNERSHIP PARTNERSHIP OF
against all co-owners, run against all the GAINS (CPG)
even if one of them joint-tenants if one of
happens to be a minor them is a minor or is Ordinary Contract or Special Partnership
Nature
under legal disability. relationship arising from marriage

CO-OWNERSHIP IS DISTINGUISHED FROM ORDINARY Number of More than 2 parties Only 2 parties (Man
Parties and Woman)
PARTNERSHIP:
ORDINARY Share in the Share is proportionate Generally, profits are
BASIS CO-OWNERSHIP
PARTNERSHIP Profits to the respective divided on a 50/50
interests of the parties. basis, unless another
Creation Created by contract, Created only by percentage has been
law, chance, Contract agreed upon in a
succession or marriage settlement.
occupation
Effect of Death of a co-owner Death of a party
Legal No Legal Personality It has a legal or Death does not dissolve the dissolves the conjugal
Personality juridical personality co-ownership partnership
separate and distinct
from the personality of Governing Book II, Title III of the Chapter 4, Family
the individual Law Civil Code Code
members.

Purpose Common enjoyment of It is for profit of CO-OWNERSHIP DISTINGUISHED FROM EASEMENT:

the property. (Art. 486, advancement of
NCC), and pecuniary interest. (Art. CO-OWNERSHIP EASEMENT
preservation of the 1767, NCC)
property There is in each co-owner a A limitation on the right of
right of dominion over the whole dominion
Share in the Share is proportionate Shares or profits may property and over his undivided
Benefits to the respective be subject to share
interests of the co- stipulation. (Art. 1790,
owners. (Art. 485, 1767, NCC) The right of ownership rests The right of dominion is in

42 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

being limited to the portion which may be allotted to
solely on each and every co- favor of one or more
him upon the partition of the property.
owner over a single object. persons and over two or
- A mere part owner cannot alienate or mortgage the
more different things.
shares of the other co-owners because no one can
Source: De Leon (2011), Property, p. 236) give what he does not have. Therefore, the mortgage
of the inherited property is not binding against the
SHARE OF CO-OWNERS IN BENEFITS AND CHARGES: co-heirs who never benefited. (Nufable vs. Nufable,
- The share of the co-owners, in the benefits as well as 309 SCRA 692)
in the charges, shall be proportional to their
respective interests. Any stipulation in a contract to DEFINITE PORTION:
the contrary shall be void. (Art. 485, par. 1, NCC) - The sale is valid only on the condition that the
- The portions belonging to the co-owners in the co- interests acquired by the vendee must be limited to
ownership shall be presumed equal, unless the the part that may be assigned to the co-owner-
contrary is proved. (Art. 485, par. 2, NCC) vendor in the division upon the termination of the co-
ownership. (Mercado vs. Viardo, 5 SCRA 859; Bailon-
EFFECT OF ACCRETION ON THE PROPERTY UNDER CO- Casilao vs. CA, 160 SCRA 138)
OWNERSHIP: - There may be a valid sale of a definite portion of the
- The co-owners will share proportionately on the property co-owned even before actual partition
increase in proportion to their respective interests. where the rule of estoppel applies. In a case, where
the co-owner as vendor pointed out the location and
EXCEPTION TO ART. 485, NCC: even indicated the boundaries of the portion of a
- The exception of Art. 48, NCC is found under Art. particular land he was selling without objection,
147, FC. A partner who did not actually contribute in protest or complaint by the other co-owners, but in
the acquisition of a property shall be deemed to have the contrary acquiesced in and tolerated such
contributed jointly and shall received a 50/50 share alienation and the occupation of said portion, it was
thereof, if he or she took charge of the care and held that a factual partition or termination of the co-
maintenance of the family and the household. ownership (although partial) was created and barred
not only the vendor but also his heirs from asserting
as against the vendee any right or title in derogation
RIGHTS OF EACH CO-OWNER of the deed of sale executed by the said vendor.
(Pamplona vs. Moreto, 96 SCRA 775)
RIGHTS OF EACH CO-OWNER:
1. Rights under Arts. 493-494, NCC: WHEN THE CO-OWNER SELLS THE WHOLE PROPERTY:
2. Right before partition: - A co-owner is entitled to sell his undivided share, a
3. Legal Right of Redemption sale of the entire property by one-co-owner will only
4. Renunciation of Interest. transfer the rights of said co-owner to the buyer,
thereby making the buyer a co-owner of the property.
(Del Campo vs. CA, 351 SCRA 1)
A. RIGHTS UNDER ARTS. 493-494, NCC: - The appropriate recourse of co-owners in cases
where their consent was not secured in a sale of the
entire property as well as in a sale merely of the
FOLLOWING RIGHTS:
undivided share of a co-owner is an action for
a. He shall have full ownership of his part, that, his
partition under Rule 69, ROC)
undivided interest or share in the common property;
b. He shall have full ownership of the fruits and benefits
pertaining thereto; B. RIGHT BEFORE PARTITION:
c. He may alienate, assign or mortgage his ideal interest
or share independently of the other co-owners;
d. He may even substitute another person in the PRELIMINARY NOTE:
enjoyment of his part, except when personal rights - Before a property owned in common is actually
are involved; and partitioned, all that the co-owner has is an ideal or
e. He may demand at any time the partition of the thing abstract quota or proportionate share in the entire
owned in common, insofar as his share is concerned. property. (Engreso vs. Dela Cruz, 401 SCRA 217)

MORTGAGE: C. LEGAL RIGHT OF REDEMPTION:

- A co-owner does not lose his part ownership of a co-
owned property where his share is mortgaged by
another co-owner without the former’s knowledge RIGHT OF REDEMPTION:
and consent. (Mercado vs. CA, 240 SCRA 616) - A co-owner of a thing may exercise the right of
redemption in case the shares of all the other co-
SALE OR MORTGAGE OF THE UNDIVIDED PORTION OF owners or of any of them, are sold to a third person.
THE COMMON PROPERTY: (Art. 1620, NCC)
- Even while an estate remains undivided, a co-owner
has the absolute and full ownership of his undivided REQUISITES FOR THE EXERCISE OF THE RIGHT OF
interest in the co-owned property and is free to LEGAL REDEMPTION:
dispose of his pro indiviso share and of the fruits and 1. There must be a co-ownership;
other benefits arising from that share. 2. One of the co-owners sold his right to a stranger;
- A transferee does not acquire any specific or 3. The sale was made before the partition of the co-
determinate physical portion o the whole, his right owned property;

PROPERTY, OWNERSHIP AND ITS MODIFICATION 43

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

4. The right of redemption must be exercised by oe injure the interest of the co-ownership or prevent the
ormoreco-owners within a period of 30 days to be other co-owners from using it according to their
counted from the time that he or they were notified in rights. The purpose of the co-ownership may be
writing by the vendee or by the co-owner vendor; and changed by agreement, express or implied. (Art. 486,
5. The vendee must be reimbursed for the price of the NCC)
sale. (Aguilar vs. Aguilar, 478 SCRA 187)
PARDELL vs. BARTOLOME
APPROPRIATE RECOURSE OF CO-OWNERS WHEN GR no. L-4656, November 18, 1912
THEIR CONSENT WAS NOT SECURED IN A SALE OF THE
PROPERTY: FACTS: Two sisters (Vincenta Pardell and Matilde Bartolome),
- The remedy is an action for redemption under Rule owned in common a two-story house with an upper floor used as a
69, ROC. (Aguirre vs. CA, 421 SCRA 310) dwelling and a lower floor available for rent by stores. Vicenta
resided in the province while Matilde lived with her husband in a
REDEMPTION DOES NOT TERMINATE CO- OWNERSHIP: room on the upper floor. In the other room were kept things owned
in common with Vicenta. Matilde occupied a portion of the lower
- The right of redemption may be availed of by a co-
floor which her husband used as his office. The other portions were
owner, only when the shares of the other owners are rented to others.
sold to a third person. There is no legal redemption,
either in a case of a mere lease and if the purchaser Vicenta brought suit to recover, among others, rents from Matilde
is also a tenant. (Fernandez vs. Tarun, 391 SCRA and her husband.
653)
ISSUE: Is Matilde to pay rents?

FRANCISCO vs. BOISER RULING: NO, for the use of the room of the upper floor; one-half,
GR no. 137677, May 31, 2000 for the use of the portion of the lower floor occupied by her
husband as his office.
Art. 1623 of the Civil Code is clear in requiring that the written
notification should come from the vendor or prospective vendor, 1. Use of Upper Floor:
not from any other person. There is, therefore, no room for - Matilde Ortiz and her husband occupied the upper story,
construction. Indeed, the principal difference between Art. 1524 of designed for use as a dwelling, in the house of joint
the former Civil Code and Art. 1623 of the present one is that the ownership; but the record shows no proof that, by so
former did not specify who must give the notice, whereas the doing, the said Matilde occasioned any detriment to the
present one expressly says the notice must be given by the vendor. interest of the community property, nor that she prevented
Effect must be given to this change in statutory language. It makes her sister Vicenta from utilizing the said upper story
sense to require that the notice is required in Art. 1623 be given by according to her rights. It is to be noted that the stores of
the vendor and by nobody else. As explained by this Court through the lower floor were rented and accounting of the rents
Justice J B.L. Reyes in Butte, the vendor of an undivided interest is was duly made to the plaintiffs.
in the best position to know who are his co-owners who under the
law must be notified of the sale. 2. Use of Portion of Lower Floor:
- Notwithstanding the above statements relative to the joint-
Receipt by a co-owner of summons in a Civil Case for Collection of ownership rights which entitled the defendants to live in
in the rentals by an alleged buyer of a co-owned property the upper story of the said house, yet in view of the fact
constitutes actual knowledge on the basis of which petitioner may that the record shows it to have been proved that the
now exercise her right of redemption within 30 days from finality of defendant Matilde's husband, Gaspar de Bartolome,
this decision.c occupied for four years a room or a part of the lower floor
of the same house on Calle Escolta, using it as an office
for the justice of the peace, a position which he held in the
WHO CAN REDEEM? capital of that province, strict justice, requires that he pay
- Legal redemption can be exercised only by the co- his sister-in-law, the plaintiff, one half of the monthly rent
owner/s who did not part with his or their pro indiviso which the said quarters could have produced, had they
share in the property held in common. (Cabales vs. been leased to another person.
CA, 531 SCRA 691) - This conclusion as to Bartolome's liability results from the
fact that, even as the husband of the defendant coowner
of the property, he had no right to occupy and use
D. RENUNCIATION OF INTEREST: gratuitously the said part of the lower floor of the house in
question, where he lived with his wife, to the detriment of
the plaintiff Vicenta who did not receive one-half of the
RIGHT TO RENOUNCE INTEREST: rent which those quarters could and should have
- A co-owner may exempt himself from the obligation produced, had they been occupied by a stranger, in the
to contribute to the expenses of preservation of the same manner that rent was obtained from the rooms on
the lower floor that were used as stores.
thing or right owned in common and to the taxes by
renouncing so much of his interest as may be
equivalent to his share of the expenses and taxes. ACTION IN EJECTMENT:
(Art. 488, NCC) - Any one of the co-owners may bring an action in
ejectment. (Art. 487, NCC)
- Any co-owner may file an action under Art. 487,
NCC, not only against a third person but also against
OBLIGATIONS OF EACH CO-OWNER
another co-owner who takes exclusive possession
and asserts exclusive ownership of the property. (De
EQUAL RIGHTS OF CO-OWNERS TO USE COMMON Guia vs. CA, 413 SCRA 114)
PROPERTIES:
- Each co-owner may use the thing owned in common, REQUISITES IN ORDER THAT THE TITLE MAY
provided he does so in accordance with the purpose PRESCRIBE IN FAVOR OF A CO-OWNER:
for which it is intended and in such a way as not to

44 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

1. THe owner has performed unequivocal acts of REMEDY OF A CO-OWNER WHO DOES NOT WANT TO
repudiation amounting to an ouster of the other co- CONTRIBUTE:
owners; - A co-owner who does not want to contribute may
2. Such positive acts of repudiation have been made exempt himself by renouncing “so much of his
known to the other co-owners; and undivided interest as may be the equivalent to his
3. The evidence thereof is clear and convincing. (Robles share of the expenses for preservation and taxes.”
vs. CA, 328 SCRA 97) - Exception: No co-owner should be allowed to
renounce if the renunciation will spell the doom or the
PRESCRIPTION OBTAINED BY CO-OWNER: destruction of the co-ownership, or prejudicial to the
- Prescriptions obtained by a co-owner benefits the co-ownership.
others. (Art. 1111, NCC)
PARTIAL RENUNCIATION:
WHAT IS DEEMED INCLUDED IN THE ACTION FOR - The co-owner need only renounce or give up in favor
EJECTMENT? of the other co-owners so much of his undivided
a. Unlawful detainer; share as may be equivalent to his share of expenses
b. Forcible entry; and taxes. (NOTE: This rule is different in easement
c. Accion publiciana; and of party wall although the situation is similar ) 3

d. Accion reivindicatoria.
Illustration:
EFFECT OF ADVERSE DECISION: Where the interests of co-owners A,B, and C are 3/6, 2/6, and 1/6 ,
- An adverse decision in the action is not necessarily respectively, and the expenses and taxes advanced by A amount
res judicata with respect to the other co-owners not to P30,000, their shares shall be the following:
being parties to the action (there is no mutual
representation between the co-owners) but they are A - P15,000
bound where it appears that the action was instituted B - P10,000
in their behalf with express and implied consent, or C- P5,000
where their rights in the co-ownership are derived
B may exempt himself from contributing his share by renouncing
from the title of their predecessor-in-interest found by P10,000 of his 2/6 interest in the co-ownership. If his interest is
the court to be invalid or inexistent. (Santiago vs. JM P100,000, He must renounce 1/10 thereof. The share of B shall
Tuazon & Co., Inc., 110 Phil 16) accrue to A and C proportionately because they bear the expenses
- Therefore, where the deceased father was not the proportionately. On the basis of their interest of 3/6 and ⅙, the
owner of the land inherited, the children cannot be proportion is 3/1 or P7,500: P2,500
considered as co-heirs or co-owners. (Santiago vs.
JM Tuazon, Supra; Resuena vs. CA, 454 SCRA 42)
NATURE OF THE RENUNCIATION:
- Renunciation is (in reality) a case of “Dacio en pago ” 4

OBLIGATION TO CONTRIBUTE TO EXPENSES OF

involving expenses and taxes already paid.
PRESERVATION AND TO TAXES:
- Since the “renunciation” (in favor of the co-owners)
- Each co-owner shall have a right to compel the other
constitutes a novation by change of the object of the
co-owners to contribute to the expenses of
obligation (ie. sum of money to interest in the co-
preservation of the thing or right owned in common
ownership), the consent of the other co-owners is
and to the taxes. Any one of the latter may exempt
necessary.
himself from this obligation by renouncing so much of
- If the creditor has not yet been paid, the
his undivided interest as may be equivalent to his
“renunciation” cannot be made without his consent
share of the expenses and taxes. No such waiver
for this would be a case of novation by substitution of
shall be made if it is prejudicial to the co-ownership.
debtor. Such consent is also required where the
(Art. 488, NCC)
renunciation is in favor of the creditor, being a case
of dacio en pago. (See. Art. 12,93, NCC)
COVERAGE OF ARTICLE 488, NCC:
- Article 488, NCC, refers only to necessary expenses
RENUNCIATION IS A FREE ACT:
for the preservation of the co-ownership such as
- A co-owner who failed or refused to waive his share
those incurred for repairs of the building in a ruinous
in the co-ownership is not tantamount to renunciation
condition, and to preserve the rights of joint owners
and may be compelled (by an action in court) to pay
to mining claims. (See Art. 546, NCC; Tinidad vs.
his share in the cost of its maintenance. (De Leon
ricafort, 7 Phil. 449; Hibberd vs. Estate of McElroy, 25
(2011), Property, p. 247)
Phil. 164)
- Taxes on the thing owned in common are to be
WHEN RENUNCIATION IS NOT ALLOWED:
considered as necessary expenses because if they
- Renunciation is not allowed if it is prejudicial to the
are not paid, the property may be sold for tax
co-ownership.
delinquency or forfeited to the government.
- A co-owner having the means cannot renounce to
- It is premature to go to court to seek contribution if
exempt himself from the duty to contribute for the
they had not been incurred yet. (Jalandoni vs.
repair of a ruinous building in danger of falling. The
Guanzon, 102 Phil. 862)

ACTION TO COMPEL CONTRIBUTION:

- If a co-owner refused or failed to give proportional 3 See discussion under Easement of party Wall (Art. 662,
contribution he can be sued in court to compel him to par., NCC)
pay. The action may take the form of collection of 4 Dacion En Pago - Whereby property is alienated to the
sum of money. (Jalandoni vs. Guanzon, Supra.)
creditor in satisfaction of a debt in money, shall be
governed by the law of sales. (Art. 1291, NCC)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 45

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

other owners can proceed to have the building CIVIL CODE PROVISION:
repaired and the former would still be liable in spite of - Repairs for preservation may be made at the will of
his renunciation. one of the co-owners, but he must, if practicable, first
notify his co-owners of the necessity for such repairs.
RENUNCIATION BY AN HEIR: Expenses to improve or embellish the thing shall be
- The “declaration of heirship and waiver of rights” decided upon by a majority as determined in article
relates to an abdication of a right in favor of other 492. (Art. 489, NCC)
persons who are co-heirs in the succession and
does not sufficiently show how a stranger to the REPAIRS FOR PRESERVATION:
succession acquired ownership of the property. - A co-owner has the right to compel the other co-
(Ungab-Valeroso vs. Ungab-Grado, 524 SCRA 599) owners to contribute to the expenses of
preservation, maintenance, or necessity repairs of the
RULES ON DIFFERENT STORIES OF A HOUSE thing or right owned in common and to the taxes,
BELONGING TO DIFFERENT OWNERS: even if incurred without the knowledge of the other
1. The main and party walls, the roof and the other co-owners or prior notice to them, in view of the
things used in common, shall be preserved at the nature of the expenses.
expense of all the owners in proportion to the value
of the story belonging to each; NOTIFY THE OTHER CO-OWNERS:
2. Each owner shall bear the cost of maintaining the - The law requires that the co-owner must (if
floor of his story; the floor of the entrance, front door, practicable) first notify the co-owners of the
common yard and sanitary works common to all, necessity for the repairs. the absence of this
shall be maintained at the expense of all the owners requirement would open the door to bad faith or
pro rata; fraud and would not exempt him from the obligation
3. The stairs from the entrance to the first story shall be to contribute to the expenses.. If impracticable or
maintained at the expense of all the owners pro rata, where the repairs are very urgent and the other co-
with the exception of the owner of the ground floor; owners are in remote places and cannot be reached
the stairs from the first to the second story shall be by ordinary means of communication, the notice
preserved at the expense of all, except the owner of may be dispensed with.
the ground floor and the owner of the first story; and
so on successively. (Art. 490, NCC) EXPENSES TO IMPROVE OR EMBELLISH:
- Those expenses are a matter of administration and
COVERAGE OF ART. 490, NCC : 5
better enjoyment of the thing owned in common.
- The rules provided under Art. 490, NCC govern the Since they are not essential or important to the
manner the different owners of different stories of a preservation of the thing owned in common,
house shall contribute to the necessary expenses for therefore, can afford to be delayed, the consent of
the preservation or maintenance of the house. (De the majority of the co-owners is required shall
Leon (2011), Property, p. 249) determined by Art 492, NCC)
- This Article apply only if the titles of ownership of the
co-owners do not specify the terms under which they
B. ACTS OF ADMINISTRATION:
will contribute to the necessary expenses of the
things owned in common by all or by some. (Pineda
(2009), p. 228) CONCEPT OF ACTS OF ADMINISTRATION:
- These are acts of management that do not involve
HORIZONTAL AND VERTICAL CO-OWNERSHIP: alteration of the property; those which are temporary
in character so much so that they do not bind the
HORIZONTAL CO- VERTICAL CO-
property for a long time, although they may be
OWNERSHIP OWNERSHIP
renewed; and those which do not create real rights
over the common property. (Pineda (2009), p. 235)
Exemplified by a row of Exemplified by a
- They contemplate acts or decisions for the common
townhouses, each unit Condominium Building or
benefit of all the co-owners and not for the benefit of
belonging to a different Apartment Building, each
only one or some of them. (De Leon (2011), Property,
owner but with common Unit belongs to different
p. 252)
areas like sidewalks, owner but with common
common fence, gates, corridors, roof, stars,
Instances of Acts of Administration:
drainage, playground and entrance and exit, etc.
1. Leasing a parcel of land for not more than 1
clubhouse, etc,
year and not to be registered;
2. Borrowing money for the preservation of the
CLASSIFICATION OF ACTS OR DECISIONS AFFECTING property which needs urgent repairs. (Art.
THE THING OWNED IN COMMON: 1878, par. 7, NCC);
1. Acts of Preservation (Art. 489, NCC); 3. paying workers and employees of their
2. Acts of Administration (Art. 492, NCC); salaries;
3. Acts of Alteration (Art. 491, NCC). 4. Paying taxes due to the Government;
5. Filing a representative suit for the co-owners
(Art. 482, NCC)
A. ACTS OF PRESERVATION:
VOTES NEED:
● For the administration and better enjoyment of the
thing owned in common, the resolutions of the
5 See further discussion under the Condominium Act

46 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

majority of the co-owners shall be binding. (Art. 492, - estoppel will operate against the co-owners who
par. 1, NCC) were aware of the execution of the acts of
● There shall be no majority unless the resolution is alterations, but did not object thereto. They are
approved by the co-owners who represent the deemed to have given their implied consent.
controlling interest in the object of the co-ownership. (Manresa; Pineda (2009), p. 233)
(Art. 492, par. 2, NCC)
● Should there be no majority, or should the resolution SALE, DONATION, MORTGAGE , LEASE, ETC., OF THE
of the majority be seriously prejudicial to those PROPERTY WITHOUT UNANIMOUS CONSENT ARE VOID:
interested in the property owned in common, the - it is void because of the lack of unanimous consent
court, at the instance of an interested party, shall required by law - as acts of alienation such as sale,
order such measures as it may deem proper, donation, mortgage, lease for more than 1 year, etc.,
including the appointment of an administrator. (Art. are acts of ownership which could be exercised only
492, par. 3, NCC) by all.
- The transaction is valid only with respect to the share
APPLICATION OF ARTICLE 491, NCC): of the co-owner alienating. (Mindanao Academy, Inc.
- Whenever a part of the thing belongs exclusively to vs. Yap, 13 SCRA 190; cASTRO VS. atienza, 53
one of the co-owners, and the remainder is owned in SCRA 254)
common, the preceding provision shall apply only to EFFECT OF REPLACEMENT:
the part owned in common. (Art. 492, last par., NCC) - A property owned in common may be replaced by
another property. Such replacement does not
constitute alteration (Enriquez vs. Watson, 22 Phil.
C. ACTS OF ALTERATION:
623; Bongalon vs. CA, 441 SCRA 553)
- A co-owner may validly lease his undivided interest
CIVIL CODE PROVISION: to a third party independently of the other co-
- None of the co-owners shall, without the consent of owners. (Sanchez vs. CA, 404 SCRA 540)
the others, make alterations in the thing owned in
common, even though benefits for all would result REMEDY OF CO-OWNERS WHO DID NOT GIVE CONSENT:
therefrom. However, if the withholding of the consent - The remedy is an action for partition under Rule 69,
by one or more of the co-owners is clearly prejudicial ROC. (Aguirre vs. CA, 421 SCRA 310)
to the common interest, the courts may afford
adequate relief. (Art. 491, NCC)
EXTINGUISHED OF CO-OWNERSHIP
- This article refers to changes or transformations
made in ting owned in common, which modify its
essence and nature. TERMINATION OF CO-OWNERSHIP:
1. By the consolidation or merger in only one of the co-
CONCEPT OF ALTERATION: owners of all the interests of the other;
- It is a change which more or less permanently - A co-owner who redeems the property in its
changes the use of a thing and adversely affecting entirety does not make him the owner of all
the condition of the thing or its enjoyment by the of it. the property remains in a condition of
other. (Manresa) co-ownership as the redemption does not
provide for a mode of terminating a co-
Instances of Alteration: ownership. (Cabales vs. CA, 561, SCRA 691)
1. Converting a riceland into a fishpond; 2. By the destruction or loss of the property co-owned;
2. Turning a house into a hotel; 3. By acquisitive prescription in favor of a third person
3. Transforming an hacienda into a residential (Art. 1106, NCC), or a co-owner who repudiates the
subdivision. co-ownership (Art. 494, last par.,NCC);
4. By the partition, judicial or extrajudicial (Art. 496,
ALTERATION VS. ADMINISTRATION: NCC), of the respective undivided shares of the co-
- Alteration is more or less permanent, on the other owners;
hand, act of administration have transitory effects (ie. - the actual possession and enjoyment of
not of long duration which is a question of fact) and several portions of the common property by
have for their purpose the preservation, preparation some of the co-owners does not of itself
and better enjoyment of the thing and which do not provide proof that the property has already
affect its essence, nature or substance. (De Leon been partitioned and co-ownership
(2011), Property, p. 253) terminated. A co-owner cannot, without the
conformity of the other co-owners or a
LIABILITY OF THE CO-OWNER WHO CAUSES THE judicial decree of partition, adjudicate to
ALTERATIONS WITHOUT THE UNANIMOUS CONSENT OF himself in fee simple a determinate portion
ALL CO-OWNERS: of the property owned in common as his
- The alteration effect becomes illegal and the co- share therein, to the exclusion of the other
owner responsible is considered that he acted in bad co-owners. (Del Banco vs. IAC, 156 SCRA
faith and can be compelled to restore the thing to its 55)
former condition at his own expense. - There is juridical dissolution of co-
- If demolition or restoration is not possible, the other ownership when the thing is sold (publicly or
co-owners may seek indemnity from him for the privately) to a third person. (Republic vs.
damages caused without any obligation to share in Baltazar-Ramirez, GR no. 148103, July 27,
the expenses incurred in the alterations. (Manresa; 2006)
Pineda (2009), p. 233)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 47

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

5. By the termination of the period agreed upon or property of the husband and wife, family
imposed by the doner or testator,or of the period home, and party walls and fences, where by
allowed by law. (Art. 494, pars., 2 and 3, NCC); and reason of their origin or juridical nature,
6. By the sale of the co-owners of the thing to a third partition is prohibited by law.
person and the distribution of its proceeds among 4. When partition would render the thing unserviceable
them. (Art. 498, NCC) for the use for which it is intended (Art. 495, NCC);
and
- The co-ownership may be terminated in
accordance with Art. 498, NCC.
RULES ON PARTITION: 5. When another co-owner has possessed the property
as exclusive owner and for a period sufficient to
CONCEPT OF PARTITION: acquire it by prescription.
- Partition is the division between two or more persons
of real or personal property which they own in ACTION TO COMPEL PARTITION IS IMPRESCRIPTIBLE:
common so that each may enjoy and possess his - Generally, prescription does not run in favor of or
sole estate to the exclusion of and without against a co-owner or co-heir. The possession of the
interference from the others. (Art. 1079, NCC; co-owner or co-heir is ordinarily not adverse to the
Villamor vs. CA, 162 scra 574) others but beneficial to all of them.
- An action to compel partition may be filed at any time
RIGHT OF A CO-OWNER TO DEMAND PARTITION: by any of the co-owners against the actual
- The policy of the law is not to favor co-ownership possessor.
because it is not conducive to the development of
community property particularly where it involves real DOCTRINE OF EQUITY CANNOT BE INVOLVED IN
estate. PRESCRIPTION AGAINST A CO-OWNER:
- Art. 494, NCC, grants to each co-owner the right to - Art. 494, NCC, confers imprescriptibility to actions of
demand at any time partition of the thing owned in a co-owner or co-heir against his co-owners or co-
common, insofar as his share is concerned for “no heirs should preempt and prevail over all abstract
co-owner shall be obliged to remain in the co- arguments based only on equity which should be
ownership.” This implies that the action to demand applied only in the absence of, and never against
partition is imprescriptible or cannot be barred by statutory law.
laches, absent a clear repudiation of the co- - Acquisitive prescription as laches which is based on
ownership by a co-owner clearly communicated to the doctrine of equity, cannot be invoked to defeat
the other co-owners. (Bailon Casilao vs. CA, 160 justice. It cannot be set up to resist the enforcement
SCRA 738) of an imprescriptible legal right. (Generosa vs.
Prangan-Valera, 500 SCRA 620)
BASIC ISSUES IN AN ACTION FOR PARTITION:
1. Is the plaintiff really a co-owner of the property? THERE IS PRESCRIPTION WHERE CO-OWNERSHIP IS
2. If the plaintiff is a co-owner, how should the REPUDIATED:
community property be divided between him and the - Where a co-owner or co-heir repudiates the co-
other co-owners? (See Rodriguez vs. Ravilan, 17 Phil. ownership or co-heirship, prescription begins to run
63) from the time of repudiation. Hence, the
imprescriptibility of the action to demand partition
Note: If the defendant alleged exclusive ownership in an action for
partition, the said action became one for recovery of property. cannot be invoked when one of the co-owners has
(Dela Cruz vs. CA, 412 scra 282) claimed the property as exclusive owner and
possessed it for a period sufficient to acquire it by
prescription. (Roque vs. IAC, 165 SCRA 118)
EXCEPTION TO THE RIGHT TO DEMAND PARTITION:
1. When the co-owners have agreed to keep the thing CO-OWNERSHIP IS A FORM OF TRUST:
undivided for a certain period of time, not exceeding - A co-ownership is a form of a trust, with each owner
10 years; being a trustee for each other. A trust relations
- The term may extend for as many times as inheres in a co-ownership. (Mallilin, Jr. vs. Castillo,
the co-owners may stipulate provided that 333 SCRA 628)
each extension does not exceed 10 years. - Generally, no one of the co-owners may acquire
2. When the partition is prohibited by the donor or ownership of the common property through
testator for a certain period not exceeding 20 years; prescription for possession by the trustee alone is not
- The wish of the donor or testator should be deemed adverse to the rest. (Castrillo vs. CA, 10
respected but as it is against public policy to SCRA 549)
allow property to remain undivided for all
time, a maximum period of 20 years is REQUISITES FOR A TRUSTEE TO CLAIM TITLE BY
provided, which period is deemed sufficient PRESCRIPTION FOUNDED ON ADVERSE POSSESSION:
for the fulfillment of the particular reasons of 1. Trustee had performed unequivocal acts of
the donor or testator. repudiation of the co-ownership amounting to an
- Although the law is silent as to the effect of ouster of the cestui que trust or the other co-owners;
the indivision of the property for more than 2. Such positive acts of repudiation have been made
20 years. known to the cestui que trust or the other co-owners;
3. When the partition is prohibited by law (Art. 494, 3. The evidence thereon is clear, complete, and
NCC); conclusive in order to establish prescription without
- there are cases of co-ownership created by any shadow of doubt; and
law, such as the community or conjugal

48 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

4. His possession is open, continuous, exclusive, and SCRA 375; Salvador vs. CA, GR no. 109910, April 5,
notorious. (Adille vs. CA, 157 SCRA 455) 1995)

ACTS SUFFICIENTLY ADVERSE TO OTHER CO-OWNERS: WHERE PARTITION WILL RENDER THING
- Acts which may be adverse to strangers may not be UNSERVICEABLE:
sufficiently adverse to the cestui que trust or other - Notwithstanding the provisions of the preceding
co-owners. article (which is Art. 494, NCC), the co-owners
cannot demand a physical division of the thing
owned in common, when to do so would render it
DELIMA vs. CA
GR no. L-46296, September 24, 1991
unserviceable for the use for which it is intended. But
the co-ownership may be terminated in accordance
When a co-owner of the property in question executed a deed of with article 498. (Art. 495, NCC)
partition and on the strength thereof obtained the cancellation of
the title in the name of their predecessor and the issuance of a new GOVERNING LAW ON PARTITIONS:
one wherein he appears as the new owner of the property, thereby - Partitions may be made by agreement between the
in effect denying or repudiating the ownership of the other co- parties or by judicial proceedings. Partition shall be
owners over their shares, the statute of limitations started to run
governed by the Rules of Court insofar as they are
from such issuance for the purpose of the action instituted by the
latter seeking a declaration of the existence of the co-ownership consistent with this Code. (Art. 496, NCC)
and of their rights thereunder. As the certificate of title was notice
to the whole world of his exclusive title to the land, the issuance of PURPOSE AND EFFECT OF PARTITION:
the new title constituted an open and clear reputation of the trust or - The purpose of partition is to put an end to co-
co-ownership and the lapse of 10 years of adverse possession ownership. Every act intended to put an end to
(See. Art. 1134, NCC) was sufficient to vest title in the co-owner by indivision among co-heirs is deemed to be a
prescription. partition. (Art. 1082, NCC)
- The effect of partition is to vest in each a sole estate
EXAMPLES OF SPECIFIC ACTS WHICH ARE in specific property, giving to each one a right to
CONSIDERED AS ACTS OF REPUDIATION: enjoy his estate without supervision or interference
a. Filing by a trustee of an action in court against the from the other. (Lopez vs. CA, 398 SCRA 550)
trustor to quiet title to property, or for recovery of
ownership thereof, held in possession by the former, HOW PARTITION IS EFFECTED:
may constitute an act of repudiation of the trust - Partition may be effected through agreement
reposed on him by the latter. between, or by and among the parties. The
b. The issuance of the certificate of title would agreement may be oral or in writing. It can also be by
constitute an open and clear repudiation of any trust, judicial proceedings if realty is involved through an
and the lapse of more than 20 years, open and action for partition against the other co-owners,
adverse possession as owner would certainly suffice governed by Rule 69, ROC.
to vest title by prescription. - In case of personality, if actual partition could not be
c. An action for the reconveyance of land based on made, it may be sold under the discretion of the court
implied or constructive trust prescribes within 10 and the proceeds divided among the owners after
years. And it is from the date of the issuance of such deducting necessary expenses. (De Cal vs. Del Val,
title that the effective assertion of adverse title for 29 Phi. 534)
purposes of the statute of limitation is counted. - Although a partition might have been informal, it is of
d. The prescriptive period may only be counted from the no moment for even an oral agreement of partition is
time petitioners repudiated the trust relation in 1955 valid and binding upon the parties. (Vda. de Ape vs.
upon the filing of the complaint for recovery of CA, 456 SCRA 193)
possession against private respondents so that the
counterclaim of the private respondents contained in PARTITION BY ORAL AGREEMENT IS NOT BARRED BY
their amended answer wherein they asserted THE STATUTE OF FRAUDS:
absolute ownership of the disputed realty by reason - The Statute of Frauds is not applicable in partition
of the continuous and adverse possession of the agreements because a partition is not a conveyance
same is well within the l0-year prescriptive period. of property but simply a matter of segregation and
e. There is clear repudiation of a trust when one who is designation of the portion of the community property
an apparent administrator of property causes the which belong to the co-owners. (Hernandez vs.
cancellation of the title thereto in the name of the Andal, 78 Phil.196)
apparent beneficiaries and gets a new certificate of
title in his own name. PARTICIPATION OF CREDITOR AND ASSIGNEES IN THE
f. It is only when the defendants, alleged co-owners of PARTITION:
the property in question, executed a deed of partition - The creditors or assignees of the co-owners may
and on the strength thereof obtained the cancellation take part in the division of the thing owned in
of the title in the name of their predecessor and the common and object to its being effected without their
issuance of a new one wherein they appear as the concurrence. But they cannot impugn any partition
new owners of a definite area each, thereby in effect already executed, unless there has been fraud, or in
denying or repudiating the ownership of one of the case it was made notwithstanding a formal
plaintiffs over his alleged share in the entire lot, that opposition presented to prevent it, without prejudice
the statute of limitations started to run for the to the right of the debtor or assignor to maintain its
purposes of the action instituted by the latter seeking validity. (Art. 497, NCC)
a declaration of the existence of the co-ownership
and of their rights thereunder. (Pangan vs. CA, 166 RULES REGARDING THE RIGHT TO OBJECT TO OR
IMPUGN PARTITION:

PROPERTY, OWNERSHIP AND ITS MODIFICATION 49

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

a. If no notice is given, the creditors or assignees may
Lopez filed an action to partition the 2 parcels of land against the
question the partition already made; defendant son. The latter claimed that the 2 parcels of land had
b. If notice is given, it is their duty to appear and make been given to him in the judicial partition.
known their position; they may concur with the
proposed partition or object to itss bein affected; and ISSUE: W/N Lopez had the right to recover his share in the 2
c. They cannot impugn a partition already executed or parcels of land in question.
implemented unless;
i. There has been fraud, whether or not notice RULING: All that Francisco Martinez undertook to do in this case
was to convey his undivided interest in these two properties. This
was given, and whether or not formal
he had a perfect right to do, in accordance with the terms of said
opposition was presented; or article. There is nothing in the last clause of the article inconsistent
ii. The partition was made notwithstanding that with this position. That declares simply that when the property is
formal opposition was presented to prevent divided the purchaser gets an interest only in that part which may
it, even if there has been no fraud. be assigned to him. For the purposes of this case we see no
difference between it and a case in which the tenant in common
REMEDIES WHERE PROPERTY CANNOT BE PHYSICALLY makes an absolute conveyance of his undivided interest in the
DIVIDED WITHOUT RENDERING IT USELESS OR property, without reserving the right to repurchase. In the case of
an absolute conveyance of that character, the relation between the
UNSERVICEABLE:
grantor in the deed and his cotenant is terminated. They are no
a. Co-owners can agree on the allotment of the entire longer cotenants. The grantee in the deed takes the place of the
property to one of them who in turn will indemnify the grantor, and he and the other owner of the property become
others for their respective interests; or cotenants. In such a case the grantor loses all interest in the
b. The property shall be sold and the proceeds property, and of course has no right to take any part in the partition
distributed to the co-owners. (Art. 498, NCC) of it. It would be absurd to say that after such conveyance the
grantor, who had lost all his interest in the property, could by
WHERE THERE ARE IMPROVEMENTS MADE BY A CO- agreement with the other owner make a partition of property in
which he had no interest that would be binding upon his grantee.
OWNER, RULE OF EQUITY TO BE FOLLOWED: The partition made between the defendant and his father did not
ARCENAS vs. CINCO affect the rights of the plaintiff who acquired an undivided half
GR no. L-29288, November 29, 1976 interest in the 2 parcels of land in question.

It appears to be the settled rule that in an action for partition, where

it is practicable to make a division of the property, "the generally if SERVITUDES OR EASEMENTS CONSTITUTED ON A
not universally recognized rule is that a court of equity, on PROPERTY OWNED IN COMMON MUST BE RESPECTED:
ascertaining that one of two or more tenants in common has made - If a property in common is subject to an easement
permanent and valuable improvements on the property involved, such as to a right of way, the easement will stay on
will allot to him that portion on which the improvements are the entire property where the easement is attached,
located, or so much thereof as represents his share of the whole even if said property had already been divided by and
tract." Thus, "in keeping with the familiar principle of equity among the co-owners. All co-owners will have their
jurisprudence requiring that one who seeks equity must do equity,
share of the burden where the easement lies. (Pineda
the rule has been generally adopted that a court of equity should
take improvements into account when decreeing partition, and (2009), p. 255)
should award to the cotenant in possession who has necessarily
and in good faith improved the common property and enhanced its OBLIGATIONS OF CO-OWNERS UPON PARTITION:
value at his own cost such equitable compensation as will leave 1. Mutual accounting for benefits, profits, or income
only the value of the estate without the improvements to be divided received for the fruits and other benefits of the thing,
among the tenants in common." Indeed, the rule requires that the belong to all the co-owners;
properties should be partitioned in a manner that would be most
2. Mutual reimbursements for expenses (ie. necessary
advantageous and equitable to the parties, having "due regard to
the improvements, situation and quality of the different parts" of the
expenses, taxes, and others in proper cases), for if
properties subject of the partition. they share in the benefits, they should also share in
the charges;
3. Indemnity for damages caused by reason of
RIGHTS OF THIRD PERSONS BEFORE PARTITIONS negligence or fraud, for example, in the making of
PROTECTED: expenses or alterations, for it is logical and just; and
- The partition of a thing owned in common shall not 4. Reciprocal warranty for defects of title or quality of
prejudice third persons, who shall retain the rights of the portion assigned to a co-owner (eg. land allotted
mortgage, servitude or any other real rights belonging to a co-owner belongs to a third person or property
to them before the division was made. Personal assigned is of inferior quality or has hidden defects),
rights pertaining to third persons against the co- for it is also justified by consideration of reason and
ownership shall also remain in force, notwithstanding justice. (See. Art. 485, 500-501, NCC)
the partition. (Art. 499, NCC)

ILLUSTRATIVE CASE: CONDOMINIUM ACT (RA 4726)

LOPEZ vs. ILUSTRE

GR no. 2426, January 24, 1906 CONCEPT OF A CONDOMINIUM:
- A condominium is an interest in real property
FACTS: Father and son (both surnamed Martinez) were co-owners consisting of separate interest in a unit in a
of 28 parcels of land each owning an undivided half of each residential, industrial or commercial building and an
property. The father sold his undivided shares in two parcels of undivided interest in common, directly or indirectly, in
land to Lopez. The sale is subject to a pacto de retro within 1 year.
the land on which it is located and in other common
Before the expiration of 1 year, father and son had a judicial
partition of 28 parcels of land. The two parcels sold to Lopez were areas of the building. A condominium may include, in
allotted to the son. The father (Francisco) did not repurchase. addition, a separate interest in other portions of such
real property. Title to the common areas, including

50 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

the land, or the appurtenant interests in such areas, - In case of conflict in the provision of the two laws,
may be held by a corporation specially formed for the the Condominium Act will prevail, it being the special
purpose (hereinafter known as the "condominium law on the subject and being the latter in point of
corporation") in which the holders of separate interest time.
shall automatically be members or shareholders, to
the exclusion of others, in proportion to the
Title IV - SOME SPECIAL PROPERTIES
appurtenant interest of their respective units in the
common areas. (Sec. 2, RA 4726)

OWNERSHIP OF UNIT WHEN ACQUIRED UNDER THE WATERS 6

CONDOMINIUM ACT: (PD 1067 - WATER CODE OF THE PHILIPPINES)

- Ownership over a condominium unit is acquired by
the buyer only after he had fully paid the purchase DEFINITION OF WATERS:
price. (Condominium Corp vs. Campos, jr., 104 - It refers to water under the grounds, water above the
SCRA 295) ground, water in the atmosphere and the waters of
- The ownership of the unit is what makes the buyer a the sea within the territorial jurisdiction of the
shareholder in the condominium. (Condominium Philippines. (Art. 4, PD 1067)
Corp. vs. Campos, Jr., Supra)
THE STATE OWNS THE FOLLOWING WATERS:
INCIDENTS OF A CONDOMINIUM GRANT: a. Rivers and their natural beds;
a. The boundary of the unit granted are the interior b. Continuous or intermittent waters of springs and
surfaces of the perimeter walls, floors, ceilings, brooks running in their natural beds and the beds
windows and doors thereof. The following are not themselves;
part of the unit bearing walls, columns, floors, roofs, c. Natural lakes and lagoons;
foundations and other common structural elements d. All other categories of surface waters such as water
of the building; lobbies, stairways, hallways, and flowing over lands, water from rainfall whether natural
other areas of common use, elevator equipment and or artificial, and water from agricultural runoff,
shafts, central heating, central refrigeration and seepage and drainage;
central air-conditioning equipment, reservoirs, tanks, e. Atmospheric water;
pumps and other central services and facilities, f. Subterranean or ground waters; and
pipes, ducts, flues, chutes, conduits, wires and other g. Seawater. (Art. 5, PD 1067)
utility installations, wherever located, except the
outlets thereof when located within the unit. WATER RIGHT:
b. There shall pass with the unit, as an appurtenance - Except as otherwise herein provided, no person,
thereof, an exclusive easement for the use of the air including government instrumentalities or
space encompassed by the boundaries of the unit as government-owned or controlled corporations, shall
it exists at any particular time and as the unit may appropriate water without a water right, which shall
lawfully be altered or reconstructed from time to time. be evidenced by a document known as a water
Such easement shall be automatically terminated in permit. (art. 13, PD 1067)
any air space upon destruction of the unit as to - A water right shall be exercised in such a manner that
render it untenantable. the rights of third persons or of other appropriators
c. Unless otherwise provided, the common areas are are not prejudiced thereby. (Art. 24, PD 1067)
held in common by the holders of units, in equal
shares, one for each unit. WATER PERMITS:
d. A non-exclusive easement for ingress, egress and - Only citizens of the Philippines, of legal age, as well
support through the common areas is appurtenant to as juridical persons, who are duly qualified by law to
each unit and the common areas are subject to such exploit and develop water resources, may apply for
easements. water permits. (Art. 15, PD 1067)
e. Each condominium owner shall have the exclusive
right to paint, repaint, tile, wax, paper or otherwise APPROPRIATION OF WATER WITHOUT PERMIT: Subject
refinish and decorate the inner surfaces of the walls, to the provisions of this Code concerning the control,
ceilings, floors, windows and doors bounding his own protection, conservation, and regulation of the appropriation
unit. and use of waters, any person may appropriate or use natural
f. Each condominium owner shall have the exclusive bodies of water without securing a water permit for any of the
right to mortgage, pledge or encumber his following:
condominium and to have the same appraised a. Appropriation of water by means of hand-carried
independently of the other condominiums but any receptacles; and
obligation incurred by such condominium owner is b. Bathing or washing, watering or dipping of domestic
personal to him. or farm animals, and navigation of watercrafts or
g. Each condominium owner has also the absolute right transportation of logs and other objects by flotation.
to sell or dispose of his condominium unless the (Art. 15, PD 1067)
master deed contains a requirement that the property
be first offered to the condominium owners within a PROHIBITION AGAINST RAISING AND LOWERING OF
reasonable period of time before the same is offered WATER LEVEL OF STREAMS:
to outside parties; (Sec. 6, RA 4726)

CONFLICT BETWEEN THE CONDOMINIUM ACT AND 6 Title IV, Chapter 1, Book II, New Civil Code covering Arts.
ARTICLE 490, NCC:
502 to 518 had been repealed by PD 1067 or the Water
Code of the Philippines

PROPERTY, OWNERSHIP AND ITS MODIFICATION 51

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- No person shall raise or lower the water level of a thereof shall be made without prior permit. (Art. 40,
river stream, lake, lagoon or marsh nor drain the PD 1067)
same without a permit. (Art. 43, PD 1067) - No person shall develop a stream, lake, or spring for
recreational purposes without first securing a permit
DRAINAGE OF WATER FROM HIGHER TO LOWER LAND: from the Council. (Art. 41, PD 1067)
- When artificial means are employed to drain water
from higher to lower land, the owner of the higher JURISDICTION INVOLVING WATER DISPUTES FALLS IN
land shall select the routes and methods of drainage THE NWRC:
that will cause the minimum damage to the lower - All disputes relating to appropriation, utilization,
lands, subject to the requirements of just exploitation, development, control, conservation, and
compensation. (Art. 46, PD 1067) protection of waters within the meaning and context
of the Water Code falls within the jurisdiction of the
DRAINAGE SYSTEMS; HOW TO BE CONSTRUCTED: national Water Resources Council. (Art. 88, PD 1067;
- Drainage systems shall be so constructed that their Amistoso vs. Ong, 130 SCRA 228)
outlets are rivers, lakes, the sea, natural bodies of - The decisions of the Council on water rights
water, or such other water course as may be controversies may be appealed to the Court of First
approved by the proper government agency. (Art. 44, Instance (now RTC) of the province where the subject
PD 1067) matter of the controversy is situated within fifteen (15)
days from the date the party appealing receives a
RECYCLING OF WASTE WATER: copy of the decision, on any of the following grounds:
- When the reuse of waste water is feasible, it shall be (1) grave abuse of discretion; (2) question of law; and
limited as much as possible, to such uses other than (3) questions of fact and law. (Art. 89, PD 1067)
direct human consumption. No person or agency
shall distribute such water for public consumption
MINERALS
until it is demonstrated that such consumption will
not adversely affect the health and safety of the
public. (Art. 36, PD 1067) CIVIL CODE PROVISION:
- Mining claims and rights and other matters
ENTRY INTO THE SERVIENT LAND: concerning minerals and mineral lands are governed
- Any person having an easement for an aqueduct may by special laws. (Art. 519, NCC)
enter upon the servient land for the purpose of
cleaning, repairing or replacing the aqueduct or the MINERAL LANDS; MEANING:
removal of obstructions therefrom. (Art. 49, PD 1067) - These are those in which minerals exist in sufficient
quantity or quality to justify the necessary
AUTHORITY FOR CONSTRUCTION OF DAMS, BRIDGES expenditures to be incurred in extracting and utilizing
AND OTHER STRUCTURES: such minerals. (Sec. 2(h), PD 463)
- Authority for the construction of dams, bridges and
other structures across of which may interfere with MEANING OF MINERALS:
the flow of navigable or floatable waterways shall first - Includes all inorganic substances found in nature,
be secured from the Department of Public Works, whether in solid, liquid, gaseous, or any intermediate
Transportation and Communications. (Art. 38, PD state, with the exception of soil which supports the
1067) organic life, and of ordinary earth, gravel, sand, and
stone which are used for building or construction
APPROVAL OF PLANS AND SPECIFICATIONS: purposes. (Sec. 2(i), PD 463)
- Except in cases of emergency to save life or
property, the construction or repair of the following GOVERNING LAWS ON MINERALS:
works shall be undertaken only after the plans and 1. Special Law
specifications therefor, as may be required by the a. PD 463 - Mineral Resources Development
Council, are approved by the proper government Decree
agency; dams for the diversion or storage of water; b. Commonwealth Act 137 - Mining Law
structures for the use of water power, installations for c. Act no. 2719 - Coal Act
the utilization of subterranean or ground water and d. Act no. 2932 - Oil and Gas Law
other structures for utilization of water resources. e. RA 387 - Petroleum Act of 2949
(Art. 39, PD 1067) 2. Constitutional Provision - Art. XII, Sec. 2, 1987
Constitution
POWER TO PROHIBIT, REMOVE OR DEMOLISH
CONSTRUCTIONS OF DAMS, DIKES, ETC.:
LA BUGAL-B’ LAAN TRIBAL ASSOC. vs RAMOS
- The Secretary of Public Works is vested with the
GR no. 127882, December 1, 2004
authority to prohibit the construction of dams, dikes
or any other works encroaching on navigable rivers or Section 2, Article XII likewise requires that "agreements … involving
public waterways and to order their removal. financial or technical assistance" be "based on real contributions to
However, works constructed on communal fishing the economic growth and general welfare of the country." This
grounds are exempted. (De Villongco vs. Moreno, provision articulates the value which the Constitution places on
114 Phil. 266; Syquio vs. Sta. Maria, 55 SCRA 736) natural resources, and recognizes their potential benefits. It
likewise acknowledges the fact that the impact of mining
operations is not confined to the economy but, perhaps to a greater
DEVELOPMENT OF HOT SPRING; STREAMS FOR
extent, affects Philippine society as a whole as well.
RECREATIONAL PURPOSES:
- No excavation for the purpose of emission of a hot "Minerals, petroleum and other mineral oils," are part of the non-
spring or for the enlargement of the existing opening

52 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

renewable wealth of the Filipino people. By pursuing large scale good reputation; it is more popularly applied to the good will of a
exploration, development and utilization of these resources, the business,and need not be affixed to the goods sold. In other words
State would be allowing the consumption or exhaustion of these it is not regarded as a trade-mark in the strict technical sense.
resources, and thus deprive future Filipino generations the
enjoyment thereof. Mining – especially large-scale mining – often
results in the displacement of local residents. Its negative effects TRADEMARK, COPYRIGHT AND PATENTS;
on the environment are well-documented. DISTINGUISHED:

In the exploration, development and utilization of the nation's KHO vs. CA, SUMMERVILLE
natural resources, the Government is in a position analogous to a GR no. 115758, March 19, 2002
trustee, holding title to and managing these resources for the
benefit of the Filipino people, including future generations. As the Trademark, copyright and patents are different intellectual property
trustee of the sovereign, the Government has a fiduciary duty to rights that cannot be interchanged with one another. A trademark is
ensure that the gains, rewards and advantages generated by the any visible sign capable of distinguishing the goods (trademark) or
Philippines' natural resources accrue to the benefit of the Filipino services (service mark) of an enterprise and shall include a stamped
people. Corollary to this, the Government cannot, without violating or marked container of goods. In relation thereto, a trade name
its sacred trust, enter into any agreement or arrangement which means the name or designation identifying or distinguishing an
effectively deprives the Filipino people of their beneficial ownership enterprise. Meanwhile, the scope of a copyright is confined to
of these resources – e.g., when it enters into an agreement literary and artistic works which are original intellectual creations in
whereby the vast majority of the resources, or the profit generated the literary and artistic domain protected from the moment of their
from the resources, is bargained away in favor of a foreign entity. creation. Patentable inventions, on the other hand, refer to any
technical solution of a problem in any field of human activity which
is new, involves an inventive step and is industrially applicable.

TRADEMARK AND TRADE NAMES

OWNERSHIP OF TRADEMARKS AND TRADE NAMES:
- A trade-mark or trade-name duly registered in the
GOVERNING LAW: proper government bureau or office is owned by and
- Trademarks and trade names are governed by pertains to the person, corporation, or firm registering
special law. (Art. 522, NCC) the same, subject to the provisions of special laws.
- The special law governing trademarks, trade names, (Art. 520, NCC)
patents and copyrights is the “Intellectual Property - the rights in a mark shall be acquired through
Code of 1997” (RA 8293), became effective on registration made validly in accordance with
January 1, 1998. provisions of RA 8293. (Sec. 122, RA 8293)
DEFINITION OF TRADEMARK, COLLECTIVE MARK, GOODWILL IS A TRANSFERABLE BUSINESS ASSET:
TRADE NAME: - The goodwill of a business is property, and may be
1. Trademark - any visible sign capable of transferred together with the right to use the name
distinguishing the goods (Trademark) or services under which the business is conducted. (Art. 521,
(service-mark) of an enterprise and shall include a NCC)
stamped or marked container of goods (Sec. 121, RA
8293) WHEN TRADEMARK CANNOT BE REGISTERED:
2. Collective Mark - Any visible sign designated as 1. Consists of immoral, deceptive or scandalous matter,
such in the application for registration and capable of or matter which may disparage or falsely suggest a
distinguishing the origin or any other common connection with persons, living or dead, institutions,
characteristics, including the quality of goods or beliefs, or national symbols, or bring them into
services of different enterprises which use the sign contempt or disrepute;
under the control of the registered owner of the 2. Consists of the flag or coat of arms or other insignia
collective mark. (Sec. 121(2), RA 8293) of the Philippines or any of its political subdivisions,
3. Trade name - means the name or designation or of any foreign nation, or any simulation thereof;
identifying or distinguishing an enterprise. (Sec. 3. Consists of a name, portrait or signature identifying a
121(3), RA 8293) particular living individual except by his written
consent, or the name, signature, or portrait of a
FUNCTION OF A TRADEMARK: deceased President of the Philippines, during the life
- To point distinctively, either by its own meaning or by of his widow, if any, except by written consent of the
association, to the origin or ownership of the wares to widow;
which it is applied. (See Ang vs. Teodoro, 74 Phil. 50) 4. Is identical with a registered mark belonging to a
different proprietor or a mark with an earlier filing or
DISTINCTION BETWEEN TRADEMARK AND TRADE priority date, in respect of:
NAME: 5. The same goods or services, or
ARCE SONS AND CO vs. SELECTA BISCUITS 6. Closely related goods or services, or
GR no. L-14761, January 28, 1961 7. If it nearly resembles such a mark as to be likely to
deceive or cause confusion;
A trade-mark is generally described as a sign, device, or mark by 8. Is identical with, or confusingly similar to, or
which the articles produced or dealt in by a particular person or constitutes a translation of a mark which is
organization are distinguished or distinguishable from those considered by the competent authority of the
produced or dealt in by others,and must be affixed to the goods or
Philippines to be well-known internationally and in
articles, while a trade-name is descriptive of the manufacturer or
dealer himself as much as his own name is and frequently includes the Philippines, whether or not it is registered here,
the name of the place where the business is located; it involves the as being already the mark of a person other than the
individuality of the maker or dealer for protection in trade, and to applicant for registration, and used for identical or
avoid confusion in business, and to secure the advantages of a similar goods or services: Provided, That in
determining whether a mark is well-known, account

PROPERTY, OWNERSHIP AND ITS MODIFICATION 53

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

shall be taken of the knowledge of the relevant sector
RIGHT TO POSSESSION RIGHT OF POSSESSION
of the public, rather than of the public at large,
including knowledge in the Philippines which has
been obtained as a result of the promotion of the An incident or attribute of An independent right,
mark; ownership over a thing. separate from ownership.
9. Is identical with, or confusingly similar to, or
The owner of an apartment The lessee of a property (not the
constitutes a translation of a mark considered well-
has the right to possess it. owner thereof) is entitled to
known in accordance with the preceding paragraph, possess it for the period of the
which is registered in the Philippines with respect to lease provided he does not
goods or services which are not similar to those with violate the terms and conditions
respect to which registration is applied for: Provided, thereof.
That use of the mark in relation to those goods or
Source: Paras (1989), Vol. II, p. 380
services would indicate a connection between those
goods or services, and the owner of the registered
ELEMENTS OF POSSESSION:
mark: Provided, further, That the interests of the
1. The existence of the thing or right;
owner of the registered mark are likely to be
2. Holding (actual or constructive) of the thing;
damaged by such use;
3. Enjoyment or exercise of a right (if the right is
10. Is likely to mislead the public, particularly as to the
involved);
nature, quality, characteristics or geographical origin
4. There is a conscious and deliberate intention to
of the goods or services;
possess the thing; and
11. Consists exclusively of signs that are generic for the
5. The holding is by virtue of one’s right (either as an
goods or services that they seek to identify;
owner or as a holder). (Pineda (2009), p. 292)
12. Consists exclusively of signs or of indications that
have become customary or usual to designate the
OWNERSHIP vs. POSSESSION:
goods or services in everyday language or in bona
fide and established trade practice; OWNERSHIP POSSESSION
13. Consists exclusively of signs or of indications that
may serve in trade to designate the kind, quality, Confers certain rights to the The holding of a thing or the
quantity, intended purpose, value, geographical owner, among which are the enjoyment of a right. It means to
origin, time or production of the goods or rendering right to enjoy the thing owned actually and physically occupy a
of the services, or other characteristics of the goods and the right to exclude other thing with or without a right.
or services; persons from possession
thereof
14. Consists of shapes that may be necessitated by
technical factors or by the nature of the goods
themselves or factors that affect their intrinsic value; - The possessor of a thing need not be the owner
15. Consists of color alone, unless defined by a given thereof.
form; or - Possession and ownership are two different legal
16. Is contrary to public order or morality. (Art. 123, RA concepts - just as possession is not a definite proof
8293) of ownership, neither is non-possession inconsistent
with ownership. (Medina vs. Greenfield Development,
443 SCRA 150).
Title V - POSSESSION
DEGREES OF POSSESSION:
1. Possession without any title whatever:
CONCEPT OF POSSESSION - Mere holding or possession without any
right or title at all, such as that of a thief or
DEFINITION OF POSSESSION: squatter (informal settlers).
- Possession is the holding of a thing or the enjoyment 2. Possession with a juridical title:
of a right. (Art. 523, NCC) - Possession is predicated on a juridical
relation existing between the possessor and
KINDS OF POSSESSION: the owner (or one acting in his behalf) of the
thing but not in the concept of owner such
as that of a lessee, usufructuary, depository,
agent, plegdee and trustee.
3. Possession with a just title:
- Possession of an advance claimant whose
title is sufficient to transfer ownership but is
defective, such as when the seller is not the
true owner or could not transmit his rights
thereto to the possessor who acted in good
faith.
4. Possession with a title in fee simple:
- Possession derived from the right of
dominion or possession of an owner.
(Highest degree of possession)

DOCTRINE OF CONSTRUCTIVE POSSESSION:

RIGHT TO POSSESSION vs. RIGHT OF POSSESSION: - It is the occupancy of part on the name of the whole
under such circumstances that the law extends the

54 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

occupancy to the possession of the whole. (Republic
vs. Jacob, 495 SCRA 529) 1. CONCEPT OF AN OWNER:
- Generally, the possession and cultivation of a portion - The possession of the possessor proceeds
of a tract of land under claim of ownership of all is from the person’s belief or pretension that
constructive possession of all. he is the owner of the thing as manifested
- Where the petitioner took possession of the by certain acts of ownership and the public
land by planting coconut, Ipil-ipil and fruit believes he is the owner.
trees, and 2 years later, he started the
construction of a building thereon, the SC
REPUBLIC vs. CA, PLAZA
held that the same is immaterial that the
GR no. 108926, July 12, 1996
building was unfinished and that he left the
place for employment reasons and visited Although tax declarations or realty tax
the property only intermittently. It is payments of property are not conclusive
sufficient that the possessor was able to evidence of ownership, nevertheless, they are
subject the property to the action of his will. good indicia of possession in the concept of
(Somodio vs. CA, 236 SCRA 307) owner for no one in his right mind would be
paying taxes for a property that is not in his
actual or at least constructive possession.
WHAT IS THE OBJECT OF POSSESSION? They constitute at least proof that the holder
- Only things and rights which are susceptible of being has a claim of title over the property. The
appropriated may be the object of possession. (Art. voluntary declaration of a piece of property for
530, NCC) 7
taxation purposes manifests not only one's
sincere and honest desire to obtain title to the
A. POSSESSION ACCORDING TO THE NAME USED AS property and announces his adverse claim
TO ITS EXERCISE: against the State and all other interested
parties, but also the intention to contribute
needed revenues to the Government. Such an
DIRECT AND INDIRECT POSSESSION act strengthens one's bona fide claim of
DIRECT INDIRECT POSSESSION acquisition of ownership
POSSESSION
2. CONCEPT OF A HOLDER:
A person actually holds the The person does not - The possession of the possessor does not
thing or exercises the right, actually hold the thing or arise from any belief or conviction that he is
in which case, he is the exercise the right and is the owner of the hthing, because the
possessor. therefore not in actual possessor acknowledges the ownership of a
possession but who thing by another person. Thus, a lessee,
exercises the possession depositary, or a bailee holds the thing in the
through another. concept of a holder.

The owner is in actual Exercised through agents. C. POSSESSION ACCORDING TO THE CONDITION OF
possession of the thing. THE MIND:
Source: Art. 524, NCC, Santos vs. Manalili, 475 SCRA 679)
POSSESSOR IN GOOD FAITH AND POSSESSOR IN BAD
KINDS OF INDIRECT POSSESSION (OR POSSESSION IN FAITH:
THE NAME OF ANOTHER): POSSESSOR IN POSSESSOR IN
VOLUNTARY INVOLUNTARY GOOD FAITH BAD FAITH

He is deemed in good faith if he He is deemed in bad faith if he

When it is effected through When it arises by operation
is not aware of any existing flaw is aware of any flaw or defect in
the mutual consent of the of law. or defect in his title or mode of his title or mode of acquisition
parties. acquisition, which flaw or defect which renders it invalid.
renders it invalid.
Possession of an agent or Possession of a person who
administrator of the property holds a thing under an Source: Art. 526, NCC)
appointed or designated by implied trust for the
the owner, with the consent beneficiary. GOOD FAITH AND BAD FAITH ARE STATES OF THE MIND:
of the former. - The state of good faith or the lack of it is in the last
analysis a question of intention. “Good faith, or the
want of it is not a visible or tangible fact that can be
B. POSSESSION ACCORDING TO THE CONCEPT OF touched, but rather a state or condition of mind that
POSSESSION: can only be judged by actual fancied tokens or signs”
(Leung Lee vs. Strong, 37 Phil. 644)
CONCEPT OF POSSESSION: - He who alleges bad faith must prove the allegation.
- The possession of things or rights may be had in one Good faith is always presumed. (Art. 527, NCC)
of two concepts: either in the concept of owner, or in
that of the holder of the thing or right to keep or enjoy CONVERSION OF GOOD FAITH INTO BAD FAITH:
it, the ownership pertaining to another person. (Art. - A person becomes a possessor in bad faith from the
525, NCC) time he receives the judicial summons - which is an
order of the Court requiring a defendant to answer
the attached Complaint within a certain period. From
7 See discussion under Art. 414, NCC

PROPERTY, OWNERSHIP AND ITS MODIFICATION 55

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

that time, “he is obliged to return the fruits received - The possession of a bailee over the thing
by him.” (Tacas vs. Tabon, 53 Phil. 356) lent to him.
- Possessor in good faith becomes a possessor in bad
faith after having acquired knowledge of certain facts KINDS OF POSSESSION ACCORDING TO PERSON OF
that put in doubt his title on the property. However, POSSESSOR (ART. 532, NCC):
the declaration of nullity does not imply that the 1. Personal Possession - refers to the possession
property was acquired in bad faith. (Ortiz vs. acquired by the same who enjoys it (either the owner
Fuentabella, 27 Phil. 537) or a mere holder).
- Possession acquired in good faith does not lose this - Elements:
character except in the case and from the moment a. Capacity to possess;
facts exist which show that the possessor is not b. Intent to possess; and
unaware that he possesses the thing improperly or c. Susceptibility of the object to be
wrongfully. (Art. 528, NCC) possessed.
- It is presumed that possession continues to be 2. Possession Through a Legal Representative -
enjoyed in the same character in which it was refers to the acquisition of possession through a legal
acquired, until the contrary is proved. (Art. 529, NCC) representative as provided by law or by appointing
an agent.
- Elements:
ACQUISITION OF POSSESSION
a. Capacity of the representative or
agent to possess;
WAY OF ACQUIRING POSSESSION: b. Authority of the representative or
1. By the material occupation or exercise of a right; agent to possess;
a. Tradicion brevi-manu: When the possessor c. Intent of the representative or agent
who is possessing the thin by a title other to possess for and in behalf of the
than ownership, continues to possess it principal, and nor for the
under a new title, now of ownership. (Ex: A representative or agent himself;
lessee of a property who continues his and
possession over the property under a new d. Capacity and intent to possess on
title, that of an owner, after having the part of the principal.
purchased it from the previous owner.) 3. Possession Through a Person Without Authority -
b. Tradition constitutum possessorium: The refers to the acquisition of possession through a
possessor who is the owner of the property person who is not clothed with authority by the
continues his possession no longer under a supposed “principal”.
title of ownership but under a title less than - Elements:
ownership. (Ex. An owner who sold his a. Capacity of the “principal” to
property but continues to possess it as a possess;
lessee.) b. Intent of the unauthorized person
2. By the subjection of the thing or right to our will; to possess for the “principal”; and
a. Tradicion symbolica - refers to constructive c. The act of ratification by the
delivery of a thing by the delivery of a mere “principal” over the acquisition of
symbol placing the thing under the control possession effected by the
of the transferee. unauthorized person.
b. Tradicion longa manu - refers to the
constructive delivery of a thing by the
Note: Under Art. 523, “ x x x in the last case, the possession shall
transferor to the transferee effected by the not be considered as acquired until the person in whose name the
pointing by the former of the things to be act of possession was executed has ratified the same, without
transferred, prejudice to the juridical consequences of negotiorum gestio in a
3. By proper acts and legal formalities established for proper case.” (Art. 523, NCC)
acquiring such right of possession. (Art. 531, NCC)
- Refers to judicial acts or the acquisition of
POSSESSION OF HEREDITARY PROPERTY:
possession by sufficient title evidenced by
- The possession of hereditary property is deemed
the performance of required formalities.
transmitted to the heir without interruption and from
(Pharma Industries vs. Pajarillaga, 100
the moment of the death of the decedent, in case the
SCRA 339)
inheritance is accepted. One who validly renounces
- KINDS:
an inheritance is deemed never to have possessed
- Donations (Arts. 748-749, NCC)
the same. (Art. 533, NCC)
- Succession (arts. 805 & 810, NCC)
- Deeds of Sale and other contracts;
EFFECT OF POSSESSION IN GOOD FAITH OR BAD FAITH
- Execution of Judgment culminating
ON THE PART OF THE HEIR:
in the sale of property at public
auction supervised by the Sheriff. - One who succeeds by hereditary title shall not
(Muyco vs. Montila, 7 Phil. 498) suffer the consequences of the wrongful
possession of the decedent, if it is not shown
MEANING OF MATERIAL OCCUPATION: that he was aware of the flaws affecting it; but
- The possession acquired by material occupation is the effects of possession in good faith shall not
only possession as a fact not a right to possession. benefit him except from the date of death of the
- Example: decedent. (Art. 534, NCC)
- The possession of a pledgee over the thing
pledged to him;

56 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
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POSSESSION OF MINORS AND INCAPACITATED is the one who is entitled to maintain the action
PERSONS: granted by law. (Gaza vs. Lim, 395 SCRA 261)
- Minors and incapacitated persons may acquire the
possession of things; but they need the assistance of RULE ON PREFERENCE IN POSSESSION MUST BE
their legal representatives in order to exercise the DISTINGUISHED FROM RULE ON PREFERENCE IN
rights which from the possession arise in their favor. OWNERSHIP UNDER ART. 1544, NCC:
(Art. 535, NCC) - If the same thing should have been sold to different
- Minors and incapacitated persons may acquire vendees, the ownership shall be transferred to the
possession of things given or granted through modes person who may have first taken possession thereof
like donations, testate or intestate succession and in good faith, if it should be movable property.
prescription.
- In the execution of formalities required by law for the Should it be immovable property, the ownership shall
effectuation of the modes of acquisition,, they must belong to the person acquiring it who in good faith
be assisted by their parents or guardians. In case of first recorded it in the Registry of Property.
judicial controversy on things donated or transmitted
to them, they must also be represented by their legal Should there be no inscription, the ownership shall
representatives. pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the
POSSESSION CANNOT BE ACQUIRED THROUGH FORCE person who presents the oldest title, provided there
OR INTIMIDATION, EVEN BY THE OWNER OF THE is good faith. (Art. 1544, NCC)
PROPERTY
- In no case may possession be acquired through
EFFECTS OF POSSESSION
force or intimidation as long as there is a possessor
who objects thereto. He who believes that he has an
action or a right to deprive another of the holding of a RIGHTS OF EVERY POSSESSOR:
thing, must invoke the aid of the competent court, if 1. The right to be respected in his possession;
the holder should refuse to deliver the thing. (Art. 2. Right to be protected in or restored to said
536, NCC) Exception: Art. 429, NCC or the Principle possession by legal means should be disturbed
of Self-Help. therein (Art. 539, par. 1, NCC); and
3. Right to secure from a competent court in an action
ACT MERELY TOLERATED: for forcible entry the proper writ to restore him in his
- Acts merely tolerated, and those executed possession (Art. 428, NCC)
clandestinely and without the knowledge of the
possessor of a thing, or by violence, do not affect BETTER RIGHT TO POSSESS EVEN AGAINST OWNER OF
possession. (Art. 537, NCC) PROPERTY:
- Acts merely tolerated are those allowed by the owner - A person with a legal right of possession to property
(not by reason of duty or obligation but) by the may set up his right even against the owner thereof.
impulse of a sense of neighborliness or good - One who has never been in possession of a property
familiarity with persons. may acquire a better right to possess as where he
- Possession of land by tolerance becomes unlawful acquires title to it through a sale between him and a
detainer from the time there is a demand to vacate. mortgage thereby divesting the mortgagor of
(Lesaca vs. Cuevas, 125 SCRA 385) ownership and the right to retain possession thereof.
(Ayson vs. Enriquez De Carpio, 432 SCRA 449).
RULE ON POSSESSION AS A FACT:
- Gen. Rule: Possession as a fact cannot be REMEDIES OF PERSON DEPRIVED OF POSSESSION:
recognized at the same time in 2 different 1. Immediate Legal Remedies:
personalities. (Art. 538, NCC). [Example: A depositor a. Forcible entry or Unlawful detainer;
and a depository cannot be recognized as actual b. Accion publiciana;
possessors at the same time over the object c. Accion reivindicatoria; and
deposited.] d. Replevin (manual delivery of persona
- Exception: Where there is co-possession as in co- property).
ownership over a community property, possession as 2. Ancillary Remedy:
a fact is recognized in two or more persons. (Art. 538, a. Writ of preliminary injunction.
NCC) - A possessor deprived of his
possession through forcible entry
RULES TO FOLLOW REGARDING CONFLICTING CLAIMS may within ten days from the filing
OF POSSESSION: of the complaint present a motion
1. Present possessor shall be preferred; to secure from the competent
2. If both claimants are presently in possession ! the court, in the action for forcible
longer in possession will have the preference who is entry, a writ of preliminary
usually the one who has come and took possession mandatory injunction to restore him
ahead of the other; in his possession. The court shall
3. If both claimants began their possession at the same decide the motion within thirty (30)
time ! The one who presents a title; days from the filing thereof. (Art.
4. If both claimants have titles ! the competent court 539, par. 2, NCC)
will determine the rightful possessor or owner. (Art. 3. Immediate Execution of judgement
538, NCC) 4. Reasonable compensation for use and occupation of
5. Where a dispute over possession arises between two property.
persons ! the person first having actual possession

PROPERTY, OWNERSHIP AND ITS MODIFICATION 57

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

POSSESSION AS BASIS FOR ACQUIRING OWNERSHIP: - The abandoner may be the owner or a mere
- Only the possession acquired and enjoyed in the possessor, but the latter cannot abandon
concept of owner can serve as a title for acquiring ownership which belongs to another
dominion. (Art. 540, NCC) because the abandoner must have a right
to the thing possessed and the legal
TAX DECLARATIONS, ASSESSMENT, OR PAYMENT AS capacity to renounce it. (Arts.. 38-39, NCC)
INDICATION OF OWNERSHIP/POSSESSION: - There must be an intention to abandon. A
- Mere tax declarations of ownership do not vest or piece of land along the seashore which is
prove ownership of the property in the declarant, nor within the reach of high tide but completely
are they even sufficient to sustain a claim for bare at low tide and which was registered in
possession for possession over a land in the absence the name of a person who owned it for a
of actual possession of the same. They are merely an long time under an undisputed claim of
indicium of a claim of ownership. (Bartolome vs. IAC, ownership is not considered an abandoned
183 SCRA 102; De Luna vs. CA, 212 SCRA 276) property insofar as the owner himself is
concerned (Aragon vs. The Insular
PRESUMPTION OF JUST TITLE: Government,19 Phil. 223)
- A possessor in the concept of owner has in his favor 2. By an assignment made to another either by
the legal presumption that he possesses with a just onerous or gratuitous title:
title and he cannot be obliged to show or prove it. - Assignment is understood to mean the
(Art. 541, NCC) complete transmission of the thing or right
to another by any lawful manner.
“JUST TITLE”; MEANING: - The effect is that he who was the owner or
- The Just Title under Art. 541, NCC, is presumed to be possessor is no longer so.
the title which by itself is sufficient to transfer 3. By the destruction or tidal loss of the thing, or
ownership without need of possessing the property because it goes out of commerce:
for the period necessary for acquiring title by - Destruction or total loss covers not only that
prescription. It is the title that is true and valid.(Art. which is caused voluntarily or intentionally
1130, NCC) but also that which is caused by accident.
- the presumption of just title does not apply in - A thing is lost when it perishes, or goes out
acquisitive prescription. the adverse possessor must of commerce, or disappears in such a way
prove his just title. (Art. 1131, NCC) that its existence is unknown, or it cannot be
recovered. (Art. 1189, NCC)
“COLORABLE TITLE”; CONCEPT: 4. By the possession of another, subject to the
- This is one which a person when he buys a thing in provisions of Art. 537, if the new possession has
god faith, from one who is not the owner but whom lasted longer than 1 year. But the real right of
he believes to be the owner. The just title required for possession is not lost till after the lapse of 10
acquisitive prescription is colorable title. (Solis vs. years:
CA, 176 SCRA 678) - This refers to possession de facto
(possession as a fact or material
PUTATIVE TITLE; MEANING: possession).
- One which a person believes he has but in fact he - See the following:
has not because there is no mode of acquiring - Art. 537, NCC
ownership, as when one is in possession of a thing in - Sec. 1, Rule 70, ROC)
the mistaken belief that it had been bequeathed to - Arts. 1134 & 1137, NCC)
him. (Doliendo vs. Biarnesa, 7 Phil. 232)
MEANING OF ABANDONMENT:
PRESUMPTION REGARDING POSSESSION OF REAL - It is the voluntary renunciation of all rights which a
PROPERTY: person has over a thing thereby allowing a third
- The possession of real property presumes that of the person to acquire ownership or possession thereof
movables therein, so long as it is not shown or by means of occupancy. (De Leon (2011), Property,
proved that they should be excluded. (Art. 542, NCC) p. 407)

EXCLUSIVE POSSESSION OF PREVIOUS CO-OWNER LOSS OF POSSESSION OF MOVABLES:

DEEMED CONTINUOUS: - The possession of movables is not deemed lost so
- Each one of the participants of a thing possessed in long as they remain under the control of the
common shall be deemed to have exclusively possessor, even though for the time being he may
possessed the part which may be allotted to him not know their whereabouts. (Art. 556, NCC)
upon the division thereof, for the entire period during
which the co-possession lasted. Interruption in the LOSS OF POSSESSION OF IMMOVABLES AND REAL
possession of the whole or a part of a thing RIGHTS WITH RESPECT TO THIRD PERSONS:
possessed in common shall be to the prejudice of all - The possession of immovables and of real rights is
the possessors. However, in case of civil interruption, not deemed lost, or transferred for purposes of
the Rules of Court shall apply. (Art. 543, NCC) prescription to the prejudice of third persons, except
in accordance with the provisions of the Mortgage
Law and the Land Registration laws. (Art. 557, NCC)
LOSS OF POSSESSION
- Third persons are not prejudiced except in
accordance with the provisions of, now, PD 1529 or
MODES OF LOSING POSSESSION (ART. 555, NCC): the Property Registration Decree.
1. By the abandonment of the thing:

58 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- Against a recorded title, ordinary prescription of possessor acquired it in a public sale. (Azanar vs.
ownership or real rights shall not take place to the Yapdiangco, 13 SCRA 486)
prejudice of a third person, except by virtue of
another title also recorded and the time shall begin to EXCEPTIONS TO THE RULE THAT NO ONE CAN GIVE
run from the recording of the latter. (Art. 1126, NCC) WHAT HE HAS NOT.
1. Where the owner of the movable is (by his conduct)
POSSESSORY ACTS OF A MERE HOLDER: precluded from denying the seller’s authority to sell;
- Acts relating to possession, executed or agreed to by 2. Where the law enables the apparent owner to
8

one who possesses a thing belonging to another as a dispose of the movable as if he were the true owner
mere holder to enjoy or keep it, in any character, do thereof;
not bind or prejudice the owner, unless he gave said 3. Where the sale is sanctioned by statutory or judicial
holder express authority to do such acts, or ratifies authority;
them subsequently. (Art. 558, NCC) 4. Where the sale is made at merchant’s stores, fairs or
markets. (Art. 1505, NCC);
LIABILITY FOR LOSS OR DETERIORATION: 5. Where the seller has a voidable title which has not
1. If the possessor is in good faith: been avoided at the time of the sale to the buyer in
- A possessor in good faith shall not be liable good faith for value and without notice of the seller’s
for the deterioration or loss of the thing defect of title. (Art. 1506, NCC);
possessed, except in cases in which it is 6. Where recovery is no longer possible because of
proved that he has acted with fraudulent prescription. (Art. 1132, NCC); and
intent or negligence, after the judicial 7. Where the possessor becomes the owner of the ting
summons. (Art. 552,par. 1, NCC) in accordance with the principle of finder’s keeper.
2. If the possessor is in bad faith: (Art. 719, NCC)
- A possessor in bad faith shall be liable for
deterioration or loss in every case, even if
FRUITS
caused by a fortuitous event. (Art. 552, par.
2, NCC)
RIGHT OF THE POSSESSOR TO RECEIVE FRUITS UNTIL
THE CESSATION OF GOOD FAITH:
THEORY OF IRREVINDICABILITY
- The fruits of a thing generally belong to the owner but
a possessor in good faith is entitled to the fruits
CIVIL CODE PROVISION: received until good faith ceases and bad faith begins.
- The possession of movable property acquired in Legal interruption of possession in good faith takes
good faith is equivalent to a title. Nevertheless, one place upon service of judicial summons to the
who has lost any movable or has been unlawfully possessor. (Art. 544, par.1, NCC; Mindanao
deprived thereof, may recover it from the person in Academy vs. Yap, 13 SCRA 190)
possession of the same. - Whenever there is a cessation of good faith in the
- If the possessor of a movable lost or which the owner eyes of the law (whether by reason of filing of a
has been unlawfully deprived, has acquired it in good complaint or not) possession in good faith should be
faith at a public sale, the owner cannot obtain its deemed legally interrupted from such cessation and
return without reimbursing the price paid therefor. not merely from the service of judicial summons.
(Art. 559, NCC)
AZARCON & ABOBO vs. EUSEBIO
DOCTRINE OF IRREVINDICABILITY: GR no. L-11977, April 29,1959
- Possession in good faith of a movable is presumed
ownership. It is equivalent to a title and no further The evidence shows that in spite of the receipt by the defendants
proof is necessary. (Aznar vs. Yapdiangco, 12 SCRA of the notice of the writ of execution of October 3, 1955, which writ
486) of execution commanded defendants "to forthwith remove from
- If X buys in good faith books from Y (an impostor) said premises and that plaintiff have restitution of the same,"
who succeeded in purchasing the books from Z by defendants-appellants nevertheless entered the land to gather
palay which was then pending harvest. We gather further from the
falsely identifying himself and paying the price by
record that the rice found on the disputed land at the time of the
means of a check which was dishonored, the law service of the order of execution had been planted by defendants-
establishes an actual right thereto in favor of X. appellants, who appear to have been in possession of the land
(EDCA Publishing vs. Santos, 186 SCRA 614) from 1951. While the court order of October 3, 1955 ordered the
defendant-appellant to move out from the premises, it did not
EXCEPTIONS TO THE THEORY OF IRREVINDICABILITY: prohibit them from gathering the crop then existing thereon. Under
- The lower court was correct in applying Article 559 of the law a person who is in possession and who is being ordered to
the Civil Code to the case at bar, for under it, the rule leave a parcel of land while products thereon are pending harvest,
has the right to a part of the net harvest, as expressly provided by
is to the effect that if the owner has lost a thing, or if
Article 545 of the Civil Code.
he has been unlawfully deprived of it, he has a right
to recover it, not only from the finder, thief or robber, As the order of execution did not expressly prohibit the defendants-
but also from third persons who may have acquired it appellants from gathering the pending fruits, which fruits were the
in good faith from such finder, thief or robber. The result of their possession and cultivation of the land, it cannot be
said article establishes two exceptions to the general said that the defendants-appellants committed an act which is
rule of irrevindicability, to wit, when the owner (1) has clear violation of the courts' order. Besides, the defendants-
lost the thing, or (2) has been unlawfully deprived
thereof. In these cases, the possessor cannot retain
the thing as against the owner, who may recover it 8 PD 1529; Negotiable Instruments Law (Art. 2031); and
without paying any indemnity, except when the
Warehouse receipts Law (Act no. 2137)

PROPERTY, OWNERSHIP AND ITS MODIFICATION 59

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- If there are no fruits, each should bear his own
appellants had presented, after receipt of the order of execution, a
motion to set aside the said order of execution, and this motion to expenses subject to the right of the possessor in
stay execution was granted. Defendants furthermore presented a good faith to be refunded for necessary expenses
bond in accordance with the order of the court and had it approved under Art. 546, NCC, unless the owner or new
by the Court of First Instance. It was perhaps in expectation of this possessor exercises his option referred to above.
resolution of the court setting aside the order of execution that
defendants-appellants may have felt justified in entering the land GENERAL RULES AS TO EXPENSES
and harvesting the fruits existing thereon. - Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may
retain the thing until he has been reimbursed therefor.
CORDERO vs. CABRAL - Useful expenses shall be refunded only to the
GR no. L-36789, July 25, 1983
possessor in good faith with the same right of
The defendants, by their own admission, are in possession of the
retention, the person who has defeated him in the
disputed land. There is no evidence that they were possessors in possession having the option of refunding the
bad faith. However, their good faith ceased when they were served amount of the expenses or of paying the increase in
with summons to answer the complaint. (Art. 528, Civil Code; value which the thing may have acquired by reason
Tacas vs. Tobon, 53 Phil. 356 [1929].) As possessors in bad faith thereof. (Art. 546)
from the service of the summons they "shall reimburse the fruits
received and those which the legitimate possessor could have CONCEPT OF NECESSARY EXPENSES:
received, ... (Art. 549, Civil Code.)
- These are expenses made for the preservation of the
thing or those which seek to prevent the waste,
WHEN THE FRUITS CONSIDERED RECEIVED? deterioration, or loss of the thing, or those without
1. In the case of natural and industrial fruits: which the thing would deteriorate or be lost.
- Natural and industrial fruits are considered - Examples:
received from the time they are gathered or - Those incurred for cultivation, production
severed. (Art.544, par. 2, NCC) and upkeep. (Mendoza vs. De Guzman, 52
2. In the case of civil fruits: Phil.. 164)
- Civil fruits are deemed to accrue daily and - Those incurred for ordinary repairs required
belong to the possessor in good faith in that by the wear and tear due to the natural use
proportion. (Art. 544, last par., NCC) of the thing and are indispensable for its
preservation (Art. 592, NCC)

EXPENSES NOT CONSIDERED AS NECESSARY EXPENSES:

- In introducing improvements consisting of the
PROPORTIONATE DIVISION OF FRUITS AND EXPENSES: addition of a dining, kitchen, closet and kitchen for
- If at the time the good faith ceases, there should be without them the house would have continued to
any natural or industrial fruits, the possessor shall stand just as before. (Robles vs. Lazarraga Hermano,
have a right to a part of the expenses of cultivation, 42 Phil. 584)
and to a part of the net harvest, both in proportion to - in paying the costs of litigation over the property for
the time of the possession. The charges shall be they shall be borne by every possessor. (Art. 550,
divided on the same basis by the two possessors. NCC)
- The owner of the thing may, should he so desire, give RIGHTS OF POSSESSOR WITH RESPECT TO NECESSARY
the possessor in good faith the right to finish the EXPENSES:
cultivation and gathering of the growing fruits, as an POSSESSOR IN POSSESSOR
indemnity for his part of the expenses of cultivation GOOD FAITH: IN
and the net proceeds; the possessor in good faith BAD FAITH:
who for any reason whatever should refuse to accept
this concession, shall lose the right to be indemnified Right to ✔ ✔
in any other manner. (Art. 545, NCC) reimbursement:
SHARING OF EXPENSES AND CHARGES: Right of Retention: ✔ ✖
- If there are pending natural and industrial fruits at the
time good faith ceases, the two possessors shall
Right of Removal: ✖ ✖
share in the expenses of cultivation and the charges
(ie. expenses made not on the property itself but on
account of it, such as taxes, interest on mortgages) in CONCEPT OF USEFUL EXPENSES:
proportion to the time of possession. - These are expenses which add value to a thing or
- under Art. 545, NCCm the expenses are not shared in augment its income, or introduce improvements
proportion to what each receives from the harvest. In thereon or increase its usefulness to the possessor,
certain cases, unjust enrichment may result. or better serve the purpose for which it is intended.
(Robles vs. Lizarraga Hermanos, Supra)
WHERE THERE ARE NO FRUITS OR FRUITS IS LESS - Example:
THAN EXPENSES: - In levelling the ground, cutting down the
- If there is not net harvest because there are no fruits trees and removing the shrubbery (Tuquero
or the fruits are less than the expenses, the rule in vs. Valdez, 35 OG. 1799);
Art. 545, NCC, that the expenses shall be borne in - In introducing improvements consisting of a
proportion to the period of possession cannot apply. dining room, kitchen, closet and ballroom,
- If the fruits are merely insufficient, the same should and a stable suitable as a coach house and
be divided in proportion to their respective expenses. dwelling. (Robles vs. Lizarraga, Supra)

60 PROPERTY, OWNERSHIP AND ITS MODIFICATION

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

RIGHTS OF POSSESSOR WITH RESPECT TO USEFUL PRESUMPTION OF POSSESSION DURING INTERVENING
EXPENSES: PERIOD:
- A present possessor who shows his possession at
POSSESSOR IN POSSESSOR
some previous time, is presumed to have held
GOOD FAITH: IN possession also during the intermediate period, in the
BAD FAITH: absence of proof to the contrary. (Art. 554, NCC)
- This contemplates a situation where a present
Right to ✔ ✖ possessor is able to prove his possession of a
reimbursement: property at a prior period (ex. 1980) but nit his
possession during the intervening period (between
Right of Retention: ✔ ✖ 1980 and the present year). He is presumed to have
possessed the property continuously without
Right of Removal: ✔ ✖ interruption, unless the contrary is proved. [NOTE:
The presumption is useful for purposes of
REMOVAL OF USEFUL IMPROVEMENTS: prescription]
- If the useful improvements can be removed without
damage to the principal thing, the possessor in good POSSESSION OF ANIMALS
faith may remove them, unless the person who
recovers the possession exercises the option under
paragraph 2 of the Art. 546. (Art. 547, NCC) POSSESSION OF ANIMALS:
- Removable objects like books, furniture and other - Wild animals are possessed only while they are under
fixtures brought by the possessor in the building one's control; domesticated or tamed animals are
constructed by him in bad faith may be removed. considered domestic or tame if they retain the habit
(Mindanao Academy vs. Yap, 13 SCRA 190) of returning to the premises of the possessor. (Art.
560, NCC)
RULE ON LUXURIOUS EXPENSES:
- Expenses for pure luxury or mere pleasure shall not
Title VI- USUFRUCT
be refunded to the possessor in good faith; but he
may remove the ornaments with which he has
embellished the principal thing if it suffers no injury
CONCEPT OF USUFRUCT
thereby, and if his successor in the possession does
not prefer to refund the amount expended. (Art. 548,
NCC) MEANING OF USUFRUCT:
- Usufruct gives a right to enjoy the property of another with
POSSESSOR IN BAD FAITH: the obligation of preserving its form and substance, unless
- The possessor in bad faith shall reimburse the fruits the title constituting it or the law otherwise provides. (Art.
received and those which the legitimate possessor 562, NCC)
- In essence, usufruct is nothing else but simply allowing one
could have received, and shall have a right only to
to enjoy another’s property. (Moralidad vs. Sps. Pernes, GR
the expenses mentioned in paragraph 1 of article 546 no. 152809, August 3, 2006)
and in article 443. The expenses incurred in
improvements for pure luxury or mere pleasure shall CHARACTERISTICS OF USUFRUCT:
not be refunded to the possessor in bad faith, but he 1. It is a real right (whether registered or not) of use and
may remove the objects for which such expenses enjoyment;
have been incurred, provided that the thing suffers no 2. It is of temporary duration;
injury thereby, and that the lawful possessor does not 3. It is transmissible; and
prefer to retain them by paying the value they may 4. It may be constituted on real or personal property,
have at the time he enters into possession. (Art. 549, consumable or non-consumable, tangible or
NCC) intangible, the ownership of which is vested in
another. (Gaboya vs. Cui, 38 SCRA 85)
COSTS OF LITIGATION OVER PROPERTY:
- The costs of litigation over the property shall be CLASSIFICATIONS OF USUFRUCT:
borne by every possessor. (Art. 550, NCC)
- As a rule, the costs of an action shall be paid by the
losing party. (Sec. 1, Rule 142, ROC). However, the
court may (for special reasons) adjudge that either
shall pay the costs, or that the same be divided, as
may be equitable.

IMPROVEMENTS CAUSED BY NATURE OR TIME:

- Improvements caused by nature or time shall always
inure to the benefit of the person who has succeeded
in recovering possession. (Art. 551, NCC) IMPAIRMENT OF OBJECT OF USUFRUCT:
- If the usufruct is on a house to be used as a dwelling
IMPROVEMENTS WHICH HAVE CEASED TO EXIST: by the usufructuary, it must be preserved as such.
- One who recovers possession shall not be obliged to The usufructuary cannot convert it into an apartment
pay for improvements which have ceased to exist at and lease it. However, the obligation of the
the time he takes possession of the thing. (Art. 553, usufructuary to preserve is only accidental for the law
NCC)

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or the will of the parties may modify or even entirely
Kinds of Usufruct
eliminate it.

USUFRUCT DISTINGUISHED FROM LEASE: CIVIL CODE PROVISION:

- Usufruct may be constituted on the whole or a part of
USUFRUCT LEASE
the fruits of the thing, in favor of one more persons,
simultaneously or successively, and in every case
As to the Nature of Right:
from or to a certain day, purely or conditionally. It
may also be constituted on a right, provided it is not
Real Right Personal Right strictly personal or intransmissible. (Art. 564, NCC)

As to Creator of Right: KINDS OF USUFRUCT AS TO EXTENT OF OBJECT:

a. Total - if it is constituted on the whole of a thing.
b. Partial - If it is constituted only on a part of a thing.
The person creating the The lessor may not be the
usufruct should be the owner as when he is a sub- KINDS OF USUFRUCT AS TO THE NUMBER OF
owner or his duly authorized lessor. BENEFICIARIES:
agent. a. Simple - if there is only one usufructuary
b. Multiple - if there are several usufructuaries and the
As to Origin: latter may be:
i. Simultaneous - at the same
ii. Successive - one after another
Created by law, contract, Created by contract
will of the testator, or KINDS OF USUFRUCT AS TO EFFECTIVITY OR
prescription. EXTINGUISHMENT:
a. Pure - if there is no term or condition
As to Extent of Enjoyment: b. With a Term - if there is a period which may be
either suspensive (from a certain day), or resolutory
(up to a certain day)
Generally covers all the Generally refers to certain c. Conditional - if it is subject to a condition which
fruits and all the uses and uses only (ie. to those may be either suspensive (from the beginning of a
benefits of the entire stipulated) certain event) or resolutory (until the happening of a
property. certain event).

As to Cause: KINDS OF USUFRUCT AS TO SUBJECT MATTER:

a. Over Things - if it involves tangible property.
b. Over Rights - if it involves intangible property
Involves a more or less Involves a more active
passive owner who allows owner or lessor who makes
the usufructuary to enjoy the the lessee to enjoy. Special Usufructs
object given in usufruct
SPECIAL USUFRUCTS:
As to Repairs and Taxes:
- The rights and obligations of the usufructuary shall be
those provided in the title constituting the usufruct; in
The usufructuary pays for The lessee is not generally default of such title, or in case it is deficient, the
ordinary repairs and taxes under obligation to provisions contained in the two following Chapters
on the fruits. undertake repairs or pay shall be observed. (Art. 565, NCC)
taxes.
RIGHTS OF THE USUFRUCTUARY
CREATION OF USUFRUCT (Art. 563, NCC):
1. Legal - created by law or declared by law CLASSIFICATION OF THE RIGHTS OF THE
a. Art. 226, Family Code USUFRUCTUARY:
2. Voluntary - created by will of the parties. 1. Rights As to the Thing and its fruits;
a. Act Inter vivos: 2. Rights As to the Usufruct itself;
i. Contract; or 3. Rights As to Advances and Damages.
ii. Donation
b. Act Mortis Causa
i. last Will and testament 1. RIGHTS OF THE USUFRUCTUARY AS TO THE
3. Mixed - Acquired by prescription. THING AND ITS FRUITS:
- Where one believing himself to be the owner
of the property of an absentee, gave in his A. Right to receive the fruits of the property in usufruct
will the usufruct of the property to his wife and half of the hidden treasure he accidentally finds
and the naked ownership to his brother, and on the property:
the wife possessed in good faith the - Generally, the natural, industrial and civil fruits
property as usufructuary for the requisite belong to the owner (Art. 441, NCC).But as the
prescriptive period. usufructuary is given the right to enjoy the
property in usufruct, he is entitled to the fruits.

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The usufructuary has the right to receive all the - The usufructuary may personally enjoy the thing
fruits except where the usufruct is constituted in usufruct, lease it to another, or alienate his
only on part of the fruits of a thing, or when there right of usufruct, even by a gratuitous title; but all
is an agreement on the contrary. (Arts. 564-565, the contracts he may enter into as such
NCC) usufructuary shall terminate upon the expiration
- A dividend is income and should go to the of the usufruct, saving leases of rural lands,
usufructuary, taking into consideration that a which shall be considered as subsisting during
stock dividend and cash dividend can be the agricultural year. (Art. 572, NCC)
declared only out of profits of the corporation, - Whenever the usufruct includes things which,
for if it were declared out of the capital, it would without being consumed, gradually deteriorate
be a violation of the law. Shares of stock through wear and tear, the usufructuary shall
dividends are civil fruits of the original have the right to make use thereof in accordance
investment. (Bachrach vs. Seifert, 87 Phil. 483) with the purpose for which they are intended,
- The usufructuary is not entitled to any hidden and shall not be obliged to return them at the
treasure which may be found on the property termination of the usufruct except in their
because it does not fall under the term “fruits”. condition at that time; but he shall be obliged to
He shall be considered a stranger (ie. if he is the indemnify the owner for any deterioration they
finder, he is entitled to ½ of the treasure) may have suffered by reason of his fraud or
- Natural or industrial fruits growing at the time the negligence. (Art. 573, NCC)
usufruct begins, belong to the usufructuary. - Whenever the usufruct includes things which
- Those growing at the time the usufruct cannot be used without being consumed, the
terminates, belong to the owner. usufructuary shall have the right to make use of
- In the preceding cases, the usufructuary, at the them under the obligation of paying their
beginning of the usufruct, has no obligation to appraised value at the termination of the
refund to the owner any expenses incurred; but usufruct, if they were appraised when delivered.
the owner shall be obliged to reimburse at the In case they were not appraised, he shall have
termination of the usufruct, from the proceeds of the right to return the same quantity and quality,
the growing fruits, the ordinary expenses of or pay their current price at the time the usufruct
cultivation, for seed, and other similar expenses ceases. (Art. 574, NCC)
incurred by the usufructuary. - The usufructuary of fruit-bearing trees and
- The provisions of this article shall not prejudice shrubs may make use of the dead trunks, and
the rights of third persons, acquired either at the even of those cut off or uprooted by accident,
beginning or at the termination of the usufruct. under the obligation to replace them with new
(Art. 567, NCC) plants. (Art. 575, NCC)
- If the usufructuary has leased the lands or - If in consequence of a calamity or extraordinary
tenements given in usufruct, and the usufruct event, the trees or shrubs shall have disappeared
should expire before the termination of the lease, in such considerable number that it would not be
he or his heirs and successors shall receive only possible or it would be too burdensome to
the proportionate share of the rent that must be replace them, the usufructuary may leave the
paid by the lessee. (Art. 568, NCC) dead, fallen or uprooted trunks at the disposal of
- Civil fruits are deemed to accrue daily, and the owner, and demand that the latter remove
belong to the usufructuary in proportion to the them and clear the land. (Art. 576, NCC)
time the usufruct may last. (Art. 569, NCC) - The usufructuary of woodland may enjoy all the
- Whenever a usufruct is constituted on the right benefits which it may produce according to its
to receive a rent or periodical pension, whether nature.
in money or in fruits, or in the interest on bonds - If the woodland is a copse or consists of timber
or securities payable to bearer, each payment for building, the usufructuary may do such
due shall be considered as the proceeds or fruits ordinary cutting or felling as the owner was in the
of such right. habit of doing, and in default of this, he may do
- Whenever it consists in the enjoyment of benefits so in accordance with the custom of the place,
accruing from a participation in any industrial or as to the manner, amount and season.
commercial enterprise, the date of the - In any case the felling or cutting of trees shall be
distribution of which is not fixed, such benefits made in such manner as not to prejudice the
shall have the same character. preservation of the land.
- In either case they shall be distributed as civil - In nurseries, the usufructuary may make the
fruits, and shall be applied in the manner necessary thinnings in order that the remaining
prescribed in the preceding article. (Art. 570, trees may properly grow.
NCC) - With the exception of the provisions of the
preceding paragraphs, the usufructuary cannot
B. Right to enjoy any increase which the thing in cut down trees unless it be to restore or improve
usufruct may acquire through accession: some of the things in usufruct, and in such case
- The usufructuary shall have the right to enjoy any shall first inform the owner of the necessity for
increase which the thing in usufruct may acquire the work. (Art. 577, NCC)
through accession, the servitudes established in
its favor, and, in general, all the benefits inherent D. Right to make on the property in usufruct sich
therein. (Art. 571. NCC) improvements or expenses he may deem proper and
to remove the improvements provided no damage is
C. Right to personally enjoy the thing in usufruct or caused to the property;
lease it to another:

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- The usufructuary may make on the property held remove the portion of the improvements
in usufruct such useful improvements or representing the excess in value if this can be
expenses for mere pleasure as he may deem done without injury to the property; otherwise,
proper, provided he does not alter its form or the excess in value accrues to the owner.
substance; but he shall have no right to be
indemnified therefor. He may, however, remove F. Right to retain the thing until he is reimbursed for
such improvements, should it be possible to do advances for extraordinary expenses and taxes on
so without damage to the property. (Art. 579, the capital:
NCC) - Upon the termination of the usufruct, the thing in
- RESTRICTIONS: usufruct shall be delivered to the owner, without
1. In the exercise of his right, the prejudice to the right of retention pertaining to
usufructuary must not alter the form or the usufructuary or his heirs for taxes and
substance of the property; extraordinary expenses which should be
2. The usufructuary may remove the reimbursed. After the delivery has been made,
improvements only if it is possible to do the security or mortgage shall be cancelled. (Art.
so without damage to the property; 612, NCC)
3. The usufructuary has no right to be
indemnified for the improvements if he
does not exercise his right to remove; 2. RIGHTS OF THE USUFRUCTUARY AS TO THE
- The usufructuary cannot invoke the USUFRUCT ITSELF:
rights of a possessor in good faith
in the concept of the owner. (Art. A. Right to alienate (or mortgage) the right of
546, NCC) usufruct:
- If the improvements made were - Gen. Rule: The usufructuary may personally
subject to reimbursement or enjoy the thing in usufruct, lease it to
indemnity, the usufructuary might another, or alienate his right of usufruct,
improve the owner out of his even by a gratuitous title; but all the
property. contracts he may enter into as such
4. If the improvements cannot be removed usufructuary shall terminate upon the
without damage,the usufructuary may set- expiration of the usufruct, saving leases of
off the same against any damage caused rural lands, which shall be considered as
by him to the property; subsisting during the agricultural year. (Art.
5. If the usufructuary does not wish to 572, NCC)
exercise his right of removal, the owner - Exception:
cannot compel him to remove the - Art. 225 and 226 of the Family
improvements; Code
6. If the usufructuary wishes to exercise his
right of removal, the owner cannot prevent B. In a usufruct to recover property or real right, The
him by offering to reimburse him; usufructuary have the right to bring the action and
- The rule is different with respect to to oblige the owner thereof to give him proper
the owner who recovers authority and necessary proof:
possession whose right to retain - The usufructuary of an action to recover real
upon payment of proper indemnity property or a real right, or any movable
is superior to the right of the property, has the right to bring the action
possessor in good faith to remove. and to oblige the owner thereof to give him
(Art. 547-548, NCC) the authority for this purpose and to furnish
7. The usufructuary’s right to remove the him whatever proof he may have. If in
improvements includes the right to consequence of the enforcement of the
destroy them provided no damage is action he acquires the thing claimed, the
caused to the property; usufruct shall be limited to the fruits, the
8. The right to remove is enforceable only dominion remaining with the owner. (Art.
against the owner, but not against a 578, NCC)
purchaser in good faith to whom a clean
title has been issued;
C. In a usufruct of part of a common property, The
- The right to remove the
usufructuary have the right to exercise all the
improvements should be annotated
rights pertaining to the co-owner with respect to
on the certificate of title, so that it
the administration and collection of fruits or
can be enforced against third
interests from the property:
persons.
- The usufructuary of a part of a thing held in
common shall exercise all the rights
E. Right to set-off the improvements he may have made
pertaining to the owner thereof with respect
on the property against any damage to the same;
to the administration and the collection of
- The usufructuary may set off the improvements
fruits or interest. Should the co-ownership
he may have made on the property against any
cease by reason of the division of the thing
damage to the same. (Art. 580, NCC)
held in common, the usufruct of the part
- If the damage exceeds the value of the
allotted to the co-owner shall belong to the
improvements, the usufructuary is liable for the
usufructuary. (Art. 582, NCC)
difference as indemnity; but if the value of the
improvements exceeds the damage, he may

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- The inventory shall contain an itemized list and
3. RIGHTS OF THE USUFRUCTUARY AS TO
appraisal of the movables and description of the
ADVANCES AND DAMAGES: condition of the immovables. The movables must be
appraised because, compared to immovables, they
A. Right to be reimbursed for indispensable are subject to greater danger of loss and
extraordinary repairs made by him in an amount deterioration. Both kinds of property must be
equal to the increase in value which the property properly identified.
may have acquired by reason of such repairs:
- If the owner should make the extraordinary PURPOSE TO GIVE SECURITY:
repairs, he shall have a right to demand of - To insure the fulfillment by the usufructuary of the
the usufructuary the legal interest on the obligations imposed upon him including the duty to
amount expended for the time that the return to the owner the thing in usufruct upon the
usufruct lasts. termination of the usufruct.
- Should he not make them when they are - Security may be in the form of cash, a personal bond,
indispensable for the preservation of the pledge, or mortgage as long as it is sufficient.
thing, the usufructuary may make them; but
he shall have a right to demand of the WHEN OBLIGATION TO GIVE SECURITY IS NOT
owner, at the termination of the usufruct, the APPLICABLE:
increase in value which the immovable may - The provisions of No. 2 of the article 583 shall not
have acquired by reason of the repairs. (Art. apply to the donor who has reserved the usufruct of
594, NCC) the property donated, or to the parents who are
usufructuaries of their children's property, except
B. Right to be reimbursed for taxes on the capital when the parents contract a second marriage. (Art.
advanced by him; 584, NCC)
- If the owner has paid them, the usufructuary
shall pay him the proper interest on the WHEN OBLIGATION TO MAKE INVENTORY OR TO GIVE
sums which may have been paid in that SECURITY EXCUSED:
character; and, if the said sums have been 1. Where the naked owner renounces or waives his right
advanced by the usufructuary, he shall to the inventory or security:
recover the amount thereof at the 2. Where the title constituting the usufruct relieves the
termination of the usufruct. (Art. 597, par. 2, usufructuary from the obligation;
NCC) 3. Where the usufructuary asks that he be exempted
from the obligation and no one will be injured
C. Right to be indemnified for damages caused to thereby. (Art. 585, NCC)
him by the naked owner: - Under this, the usufructuary may apply to
- The owner of property the usufruct of which the courts for relief in case the naked owner
is held by another, may alienate it, but he refuses to grant the exemption where (for
cannot alter its form or substance, or do example) the usufruct is over the right to
anything thereon which may be prejudicial receive a periodic income (eg. Rent) or
to the usufructuary. (Art. 581, NCC) pension. No one will be injured by the
exemption because the property itself or the
capital is not delivered to the usufructuary.
OBLIGATIONS OF THE USUFRUCTUARY
EFFECTS OF FAILURE TO GIVE SECURITY (ART. 586,
NCC):
1. On the rights of the Owners:
A. OBLIGATION BEFORE THE USUFRUCT BEGINS: - Where the obligation to give security or to
file a bond is not excused or exempted, the
failure of the usufructuary to comply with the
OBLIGATIONS OF THE USUFRUCTUARY BEFORE THE
same entitles the naked owner for his
USUFRUCT BEGINS:
protection to demand that immovables to be
1. To make, after notice to the owner or his legitimate
placed under administration or receivership,
representative, an inventory of all the property, which
movables be sold, credit instruments be
shall contain an appraisal of the movables and a
converted into registered certificates or
description of the condition of the immovables;
deposited, and cash and products be
2. To give security, binding himself to fulfill the
invested but the interest (12% per annum)
obligations imposed upon him in accordance with
on the proceeds of sale of movables and
this Chapter. (Art. 583, NCC)
credit instruments, and the net proceeds of
immovables placed under administration
PREVIOUS NOTICE TO BE GIVEN:
shall belong to the usufructuary. The naked
- In the making of the inventory, the concurrence of the
owner gets the proceeds of the sale of
naked owner is not required. Under the law, it is
movables and credit instruments.
sufficient that he is notified of such facts personally
or through legitimate representatives.
2. On the rights of the Usufructuary:
- Until he (the usufruct) gives the proper
EXPENSES OF INVENTORY:
security, the usufructuary cannot enter upon
- The expenses of the inventory should be borne by
the possession and enjoyment of the
the usufructuary because it is his duty to do so.
property.
CONTENTS OF THE INVENTORY:

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- Under Art. 599, he (the usufruct) may not
C. OBLIGATIONS AT THE TERMINATION OF THE
collect any matured credits nor invest
capital in usufruct without the consent of the USUFRUCT:
owner or judicial authorization. However, the
failure to give security does not extinguish OBLIGATIONS OF THE USUFRUCTUARY AT THE
the right of usufruct (Art. 603, NCC). Hence, TERMINATION OF THE USUFRUCT:
the usufructuary may alienate his right to the 1. To return the thing in usufruct to the naked owner
usufruct. unless there is a right of retention (Art. 612, NCC)
- NOTE: Art. 586, speaks only of “security”, 2. To pay legal interest for the time that the usufruct
hence, failure to make an inventory (when lasts, on the amount spent by the owner for
not excused) does not have the same effect extraordinary repairs (Art. 594, NCC), and the proper
as when security is not given. interest on the sums paid as taxes by the owner (Art.
597, ncc)
WHEN THE USUFRUCTUARY WHO IS UNDER 3. To indemnify the naked owner for any losses due to
OBLIGATION TO GIVE SECURITY CANNOT AFFORD TO his negligence or of his transferees (Arts. 589-590)
DO SO AND NO ONE IS WILLING TO GIVE SECURITY FOR
THEM:
- If the usufructuary who has not given security claims, EXTINGUISHMENT OF USUFRUCT
by virtue of a promise under oath, the delivery of the
furniture necessary for his use, and that he and his MODES OF EXTINGUISHMENT OF USUFRUCT (ART. 603,
family be allowed to live in a house included in the NCC):
usufruct, the court may grant this petition, after due 1. By death of the usufructuary, unless a contrary
consideration of the facts of the case. intention clearly appears;
- The same rule shall be observed with respect to - In multiple usufructs, the usufruct shall
implements, tools and other movable property come to an end only on the death of the last
necessary for an industry or vocation in which he is survivor (Art. 611, NCC)
engaged. - Death of the nakedowner does not terminate
- If the owner does not wish that certain articles be the usufruct, his rights are transmitted to his
sold because of their artistic worth or because they heirs.
have a sentimental value, he may demand their 2. By the expiration of the period for which it was
delivery to him upon his giving security for the constituted, or by the fulfillment of any resolutory
payment of the legal interest on their appraised value. condition provided in the title creating the usufruct;
(Art. 587, NCC) - Extinguishment of usufruct implies that there
is usufruct. If the creation of the usufruct
RETROACTIVE EFFECT OF GIVING SECURITY: depends upon the fulfillment of a suspensive
- After the security has been given by the usufructuary, condition, its non-fulfillment does not
he shall have a right to all the proceeds and benefits extinguish the usufruct which never came
from the day on which, in accordance with the title into existence.
constituting the usufruct, he should have - Usufruct created in favor of a juridical
commenced to receive them. (Art. 588, NCC) person cannot exceed 50 years. (Art. 605,
NCC)
B. OBLIGATION DURING THE USUFRUCT: - See: Moralidad vs. Pernes, 497 SCRA 532)
3. By merger of the usufruct and ownership in the same
person;
OBLIGATIONS OF THE USUFRUCTUARY DURING THE - When the rights of usufruct and ownership
EXISTENCE OF THE USUFRUCT: are acquired by one and the same person
1. To take care of the property (Art. 589, NCC); (Art. 1275, NCC) who becomes the absolute
2. To replace with the young thereof animals that die or owner of the property. (Estate of De Los
are lost in certain cases when the usufruct is Santos vs. Luciano, 60 Phil. 328)
constituted on flock or herd of livestock (Art. 591, 4. By renunciation of the usufructuary;
NCC); - The renunciation may be made expressly or
3. To make ordinary repairs (Art. 592, par. 1, NCC); impliedly, but since it partake of a
4. To notify the owner of urgent extraordinary repairs condonation or donation, it must comply
(Art. 593, NCC); with the forms of donation. It implies a
5. To permit works and improvements by the naked voluntary surrender of the rights of the
owner not prejudicial to the usufruct (Art. 595, NCC); usufructuary made by him with intent to
6. To pay annual taxes and charges on the fruits (Art. surrender.
596, NCC) - Renunciation is not an assignment of the
7. To pay interest on taxes on capital paid by the naked right. It is really an abandonment by the
owner (Art. 597, NCC); usufructuary of his right and does not,
8. To pay debts when the usufruct is constituted on the therefore, require the consent of the naked
whole patrimony (Art. 598, NCC); owner but it is subject to the rights of
9. To secure the naked’sowner’s or court’s approval to creditors. (Arts. 1381(3), 1387, NCC)
collect credits in certain cases. (Art. 599, NCC); 5. By the total loss of the thing in usufruct;
10. To notify the owner of any prejudicial act committed - Total loss of the thing extinguishes the
by third persons (Art. 601, NCC) usufruct except as provided in Arts. 607 to
11. To pay for court expenses and costs regarding 609, NCC.
usufruct (Art. 602, NCC) - In case of partial loss, the usufruct continues
with the remainder (Art. 604, NCC)

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6. By the termination of the right of the person This is a temporary measure to keep the
constituting the usufruct; usufruct alive until the building is
- Termination refers to the right of the person reconstructed or replaced. While the
constitution the usufruct, not to a condition usufruct on a building does not expressly
imposed upon the usufruct and is distinct include the land on which it is constructed,
from the cause. the land should be deemed included, for
7. By prescription: while there can be land without a building
- This refers to acquisitive prescriptive (Arts. there can be no building without land.
1106, 1117, NCC) 3. Where insurance received by naked owner:
- It is the us ebay third person and not the - The naked owner shall pay legal interest on
non-use by the usufructuary which insurance received if it has not been used in
extinguishes the usufruct by prescription the construction of another building during
unless he non-use amounts to a the whole period of the usufruct but he may
renunciation (Art. 533, NCC) (if he desires) relieve himself of this
8. Other causes (Aside from Art. 603, NCC): encumbrance by turning over the money to
a. Annulment or rescission of contract creating the usufructuary so that he may use it
the usufruct, subject to the obligation to return the
b. Mutual consent; and amount to the naked owner after his death
c. Special causes provided forby other legal as provided in Art. 612, NCC. (Vda. de Albra
provisions such as emancipation of a child vs. Carandang, 106 Phil. 855)
(by attainment of age of majority or Marriage
of minor) which terminates parental usufruct WHERE ON BUILDING ONLY AND IT IS DESTROYED:
over the property of the child. (Arts. 225- - The same rule shall be applied if the usufruct is
226, 234, FC) constituted on a building only and the same should
be destroyed. But in such a case, if the owner should
EFFECT OF PARTIAL LOSS: wish to construct another building, he shall have a
- If the thing given in usufruct should be lost only in right to occupy the land and to make use of the
part, the right shall continue on the remaining part. materials, being obliged to pay to the usufructuary,
(Art. 604, NCC) during the continuance of the usufruct, the interest
upon the sum equivalent to the value of the land and
USUFRUCT IN FAVOR OF JURIDICAL OR NON-JURIDICAL of the materials. (Art. 607, last par. NCC)
ENTITLES
- Usufruct cannot be constituted in favor of a town, PAYMENT OF COST OF INSURANCE:
corporation, or association for more than fifty years. If - If the usufructuary shares with the owner the
it has been constituted, and before the expiration of insurance of the tenement given in usufruct, the
such period the town is abandoned, or the former shall, in case of loss, continue in the
corporation or association is dissolved, the usufruct enjoyment of the new building, should one be
shall be extinguished by reason thereof. (Art. 605, constructed, or shall receive the interest on the
NCC) insurance indemnity if the owner does not wish to
- The 50-Year limitation does not apply to trusts. rebuild.
(Palad vs. GOVERNOR OF quezon Province, 46 - Should the usufructuary have refused to contribute to
SCRA 354) the insurance, the owner insuring the tenement alone,
the latter shall receive the full amount of the
USUFRUCT WITH DURATION DEPENDENT ON AGE OF A insurance indemnity in case of loss, saving always
THIRD PERSON: the right granted to the usufructuary in the article
- A usufruct granted for the time that may elapse 607. (Art. 608, NCC)
before a third person attains a certain age, shall
subsist for the number of years specified, even if the EXPROPRIATION OF THING IN USUFRUCT:
third person should die before the period expires, - Should the thing in usufruct be expropriated for
unless such usufruct has been expressly granted only public use, the owner shall be obliged either to
in consideration of the existence of such person. (Art. replace it with another thing of the same value and of
606, NCC) similar conditions, or to pay the usufructuary the legal
interest on the amount of the indemnity for the whole
WHERE USUFRUCT ON LAND AND BUILDING , AND period of the usufruct. If the owner chooses the latter
BUILDING DESTROYED: alternative, he shall give security for the payment of
1. Usufruct of land and materials of building: the interest. (Art. 609,NCC)
- The destruction of the building terminates
the usufruct on the building but not the EFFECT OF BAD USE:
usufruct on the land. Therefore, the - A usufruct is not extinguished by bad use of the thing
usufructuary is still entitled to the use of the in usufruct; but if the abuse should cause
land in place of the building, the material considerable injury to the owner, the latter may
thereof. (Art. 607, par. 1, NCC) ! This is a demand that the thing be delivered to him, binding
case of partial loss. himself to pay annually to the usufructuary the net
2. Right granted as a temporary measure: proceeds of the same, after deducting the expenses
- The usufructuary can insist on the use of the and the compensation which may be allowed him for
land and the materials for the remainder of its administration. (Art. 610, NCC)
the term of the usufruct as the right is
granted him by the law as against the wish USUFRUCT IN FAVOR OF SEVERAL PERSON:
of the owner to construct another building.

PROPERTY, OWNERSHIP AND ITS MODIFICATION 67

 PROPERTY, OWNERSHIP AND ITS MODIFICATION
Morillo Notes

- A usufruct constituted in favor of several persons
living at the time of its constitution shall not be
extinguished until the death of the last survivor. (Art.
611, NCC)

OBLIGATION OF USUFRUCTUARY TO RETURN THING

UPON TERMINATION OF USUFRUCT:
- Upon the termination of the usufruct, the thing in
usufruct shall be delivered to the owner, without
prejudice to the right of retention pertaining to the
usufructuary or his heirs for taxes and extraordinary
expenses which should be reimbursed. After the
delivery has been made, the security or mortgage
shall be cancelled. (Art. 612, NCC)

68 PROPERTY, OWNERSHIP AND ITS MODIFICATION