PROPERTY LAW ACCESSION RULES

1
2
 RULES ON ACCESSION FOR IMMOVABLE PROPERTY

Article 441. To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;

(3) The civil fruits. (354)

3
KINDS OF ACCESSION

Discreta Continua

Natural, Industrial and Civil. Acquisition of ownership of things incorporated into a principal thing.

4
 Legend:

Actors

(LO) - landowner

(BPS) - builder/planter/sower

(OM) - Owner of Materials

Acts

Good Faith

Bad Faith

I. Rules when the landowner (LO) is ALSO the – builder/planter/sower (BPS) makes constructions or plantings with materials of another (OM): (Art.
447)

Landowner — Builder/Planter/Sower (LO-BPS) Owner of Materials (OM)

A. Good Faith (Art.447) (1st sentence) Good Faith (Art.447) (2nd sentence)

(LO-BPS) can acquire the materials provided there is full (OM) is entitled to full payment or (OM)
payment may remove the materials provided there is no substantial
injury to work done.

B. Good Faith (Art. 447 (2nd sentence) Bad Faith (Art. 449)

*Note: Art. 449 applies because the (OM) is either the

(LO-BPS) so rights and obligations will be governed by
provisions between (LO-BPS)

5
(LO-BPS) can acquire the materials for free and will be (OM) loses the materials and will be liable for damages due to
entitled to damages due to defects or inferior quality of the defects or inferior quality of the materials.
materials.

C. Bad Faith (Art. 454 = 447) Good Faith (Art. 454 = 447)

(LO-BPS) can acquire the materials provided there is full (OM) is entitled to full payment for the materials plus damages
payment plus damages. or OM may remove the materials even if there is substantial
injury to the work done plus damages.

D. Bad Faith Bad Faith

Same as A. Same as A.

GE: There are four parties under Art. 448. LO-BPS (GF) LO-BPS (BF) Art. 453(1)
II. Rules when builder/planter/sower (BPS) builds, plants or sows on the land of another (LO) - landowner:

Art. 448

Landowner (LO) Builder/Planter/ Sower (BPS)

A. Good Faith Good Faith

Option 1: To acquire whatever has been built, planted or sown and payment To receive payment for the value of the land and necessary, useful and
of the necessary expenses, useful expenses and luxurious expenses (if the luxurious expenses (if LO wants to get luxurious improvements) with
LO wants to get the luxurious improvements) (448) right of retention without any obligation to pay rent until full payment.

To remove the useful improvements provided it does not cause any injury
(this is part of the right of retention).

If LO does not get the luxurious improvements, BPS can remove the same
provided there is no injury to the land or the building.

Option 2: To oblige the BP to buy the land or the S to pay rent unless the To purchase land at fair market value provided its value is not considerably
value of the land is considerably more than that of the building or trees. more than that of the building or trees. If BP cannot pay purchase price of the
land or the S cannot pay the rent, LO can require BPS to remove whatever

6
 has been built, planted or sown. If the value of land is considerably more than
that of the building or trees, BPS cannot be compelled to buy the land.

In such a case, BPS will pay reasonable rent.

If BPS cannot pay the rent, LO can eject BPS from the land.

B. Good Faith (Art. 449) Bad Faith (Art. 449)

Option 1: To acquire whatever has been built, planted or sown for free but Loses whatever has been built, planted or sown and liable to pay damages.
must pay necessary expenses and luxurious expenses (if LO wants to get the
luxurious improvements) plus damages Entitled to payment for necessary expenses for preservation (Art. 452)
without the right of retention.

Not entitled to payment for useful expenses and cannot remove even if
removal will not cause injury. (Art. 449 BPS in BF loses everything XPN:
NE)

If LO wants luxurious improvements, BPS is entitled to payment. The value

of the luxurious improvements will be as of the date LO obtains possession.

If LO does not want luxurious improvements, BPS may remove luxurious

improvements if it will not cause injury.

Option 2: To oblige BP to buy land or S to pay rent plus damages Obligated (Wording of Art. 450 is compel) to pay for land or to pay rent
regardless whether the value of the land is considerably more than that of the plus damages regardless whether the value of the land is considerably more
building or the trees. than that of the building or the trees.

(Art. 450) (Art. 450)

Option 3: To compel (Wording of Art. 450 is demand) BPS to remove or Obligated (Wording of Art. 450 is demand) to remove or demolish work
demolish work done plus damages (Art. 451) . done plus damages (Art. 451).

C. Bad Faith (Art. 447) Good Faith (Art. 447)

To pay for whatever has been built, planted or sown plus damages. (First Option 1: To receive payment for whatever has been built, planted or sown

7
 sentence Art. 447) plus damages. . (First sentence Art. 447)

Option 2: To remove whatever has been built, planted or sown even if it will
cause injury plus damages. (Second sentence Art. 447)

BPS has no option to acquire or buy the land. (No intention to sell the land
at all by LO).

D. Bad Faith (Art. 453(1)) Bad Faith (Art. 453(1))

Same as A. Same as A.

GE: There are four parties under Art. 448. LO-BPS (GF) LO-BPS (BF) Art. 453(1)

8
III. Rules when landowner (LO), builder/planter/sower (BPS) and owner of the materials (OM) are 3 different persons:

Landowner (LO) Builder/Planter/Sower (BPS) Owner of the Materials (OM)

A. Good Faith Good Faith Good Faith

Option 1: To acquire whatever has been built, To receive payment for the value of the land and To receive payment from BPS who is primarily
planted or sown and payment of the necessary necessary, useful and luxurious expenses (if LO liable for materials; if BPS is insolvent, to proceed
expenses, useful expenses and luxurious expenses wants to get luxurious improvements) with right of against LO who is subsidiarily liable with no right
(if the LO wants to get the luxurious retention without any obligation to pay rent until of retention. (Art. 455)
improvements). (Art. 448) full payment.

To remove the useful improvements provided it

does not cause any injury (this is part of the right
of retention).

If LO does not get the luxurious improvements,

BPS can remove the same provided there is no
injury to the land or the building. (Art. 448)

Option 2: To oblige the BP to buy the land or the S To purchase land at fair market value provided its To receive payment from BPS only with the right
to pay rent unless the value of the land is value is not considerably more than that of the of retention and material rent lien until full
considerably more than that of the building or building or trees. payment. LO is not subsidiarily liable.
trees. (Art. 448)
If BP cannot pay purchase price of the land or the
S cannot pay the rent, LO can require BPS to
remove whatever has been built, planted or sown.

If the value of land is considerably more than that

of the building or trees, BPS cannot be compelled
to buy the land. In such case, BPS will pay
reasonable rent.

If BPS cannot pay the rent, LO can eject BPS

from the land.

B. Good Faith Good Faith Bad Faith

9
 Same as A. Same as A. Whatever is the choice of LO, the OM will lose
materials without payment plus liable for damages.
(By analogy Art. 449)

C. Good Faith Bad Faith Good Faith

Option 1: To acquire whatever has been built, BPS will lose whatever has been built, planted or To receive payment for value of materials
planted or sown for free except for necessary sown but is entitled to be paid for necessary principally from BPS; and if BPS is insolvent,
expenses and luxurious expenses (if LO wants to expenses and luxurious expenses (if LO wants to subsidiarily from LO.
acquire luxurious improvements) plus damages. acquire luxurious improvements) plus liable to pay
damages. BPS has no right of removal even if
removal will not cause injury.

Option 2: To oblige BP to buy the land regardless To buy the land regardless whether the value of the To receive payment for materials from BPS only.
whether the value of the land is considerably more land is considerably more than that of the building
than that of the building or the trees or S to pay or the trees or pay rent and liable to pay damages.
rent plus damages.

Option 3: To oblige BPS to demolish or remove To demolish or remove what has been built, To receive payment for materials from BPS only.
whatever has been built, planted or sowed plus planted or sowed and liable for damages.
damages.

D. Good Faith Bad Faith Bad Faith

Same as C. Same as C. Since both BPS and OM are in bad faith, treat
them both as if they are in good faith. (By analogy
Art. 453)

Whatever is the choice of the LO, OM has right to

receive payment for materials from BPS only (LO
has no subsidiary liability because OM is in good
faith only insofar as BPS is concerned).

If LO chooses option 1, OM has no right to

remove materials even if there will be no injury.

10
 If LO chooses option 2, OM has right of removal
provided there will be no injury.

If LO chooses option 3, OM is liable to pay

damages due to defects or inferior quality of
materials.

E. Bad Faith Good Faith Good Faith

To pay for whatever has been built, planted or Option 1: To receive payment for whatever has To receive payment for value of materials
sown plus liable to pay damages. Option 1: To been built, planted or sown plus damages. principally from BPS; and if BPS is insolvent,
receive payment for whatever has been built, subsidiarily from LO.
planted or sown plus damages.
Option 2: To remove whatever has been built,
planted or sown even if it will cause injury plus
damages.

BPS has no option to acquire or buy the land.

F. Bad Faith Good Faith Bad Faith

Same as E. Same as E. No right to receive payment for materials from

BPS nor LO (who ends up owning the buildings or
trees).

11
12
RULES ON ACCESSION FOR MOVABLE PROPERTY

13
DIFFERENT KINDS OF ADJUNCTION

1. Inclusion/engraftment
2. Soldadura/soldering
3. Escritura/writing
4. Pintura/painting
5. Weaving/tejido

TEST TO DETERMINE WHICH IS THE PRINCIPAL AND WHICH IS THE ACCESSORY

1. That to which the other has been united as an ornament, or for its use, or perfection;

2. That of greater value;

3. That of greater volume;

4. That which has greater merits.

SPECIAL RULE

In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the
accessory thing.

IF THE ADJUNCTION CONCERNS THREE OR MORE THINGS

1. Determine which really is the principal

14
 2. All the rest should be considered as accessories

ADJUNCTION OR CONJUNCTION COMMIXTION OR CONFUSION SPECIFICATION

● There is union of two objects ● There is union of two objects ● It is the work of a third person that is
● Two different things are united in that ● It implies a greateinter-penetration and united to the property of another.
they form a single object, but each even decomposition of the things mixed.
component part preserves its nature.

Example: Example: Example:

(1) A golden arrow owned by Pepe was (1) A cavan of NFA rice accidentally mixed (1) Grapes are made into wine
cemented by Leila on a beautifully design into a cavan of basmati rice. (2) Melting a piece of silver into a cup
wooden stand for decoration purposes (3) Crafting a wood into a table
with both objects cannot be detached
without causing injury to them.

Right of Accession with Respect to Movable Property

ADJUNCTION (OR CONJUNCTION)

Takes place when two or more movable things belonging to different owners are so united that they cannot be separated without causing injury to one
or both of them, thereby giving rise to a new thing.
Features:

1. Two or more movables form a distinctive new thing;

2. Each one of the things making up the new one preserves its own nature.

15
Legal Effects If effected in Good Article 466 governs
Faith:
(It is immaterial who General Rule: The owner of the principal thing acquires the accessory following the
effected the union or principle that accessory follows the principle., but he must indemnify the owner of the accessory for its
attachment if it is in value following the principle that no one shall unjustly enrich himself at the expense of another.
good faith)

Exception: If the accessory is much more precious than the principal thing, its owner may demand its
separation, even though the principal may suffer injury.

If effected in Bad Article 470 (2) governs

Faith by the Owner
of the Principal The owner of the accessory may choose between the following:

a.) To demand payment for the value of the Accessory,with a right to be indemnified for damages; or

b.) To demand for the separation of The Accessory,even though for this purpose it be necessary to destroy
the principal thing, with a right to be indemnified for damages. (This option however does not apply if it is not
practicable such in the case of paintings or writings)

16
 If effected in Bad Article 470(1) governs
Faith by the Owner
of the Accessory The owner of the accessory in bad faith shall lose the thing incorporated (the accessory) and shall be
liable to pay damages to the owner of the principal.

If Both Acted in Article 470 (3) governs

Bad Faith
As though acted in good faith (hence article 466 will apply)

Whenever the owner of the material employed without his consent has a right to an indemnity, he may
demand that the same consists either:

1.) in the delivery of a thing equal in kind and value, and in all other respects to that employed; or

2.) in the payment of the price thereof according to expert appraisal.

COMMIXTION OR CONFUSION

Refers to a mixture of two or more things belonging to different owners.

Mixture of solid things- commixtion

Mixture of liquid things- confusion

17
 Legal Effects Co-ownership Each co-owner shall acquire a right proportional to the part belonging to him, bearing in mind the
(based on Articles Mixture takes place value of the thing mixed or confused.
472 and 473) by reason of

the following:

1. By will of
both or all
owners of
the things
mixed;
2. By will of
only one
owner
acting in
good faith;
3. Or by
chance or
fortuitous
event.

If caused by Only Article 473 (2) governs

One Owner Acting The one who caused the mixture in bad faith loses the thing belonging to him thus mixed or confused,
in Bad Faith besides being obliged to pay indemnity for the damages caused to the owner of the thing with which his
own was mixed or confused.

18
 SPECIFICATION

Takes place whenever the work of a person is done on the material of another, such material, in consequence of the work itself, undergoing a transformation.

Imparting a new form to the material of another person

Involves:

1.) labor of the worker; and

2.) the materials of another.

19
Legal If the Worker Article 474 (1) governs
Effects Acted in Good
Faith General Rule: One who in good faith employs the material of another in whole or in part in order to make a thing of a
different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the material for its
value.

Exception: when the material is more precious than the transformed thing or more valuable, in which case, its owner
may at his option:

1. Appropriate the new thing to himself after paying indemnity for the value of the
work;
2. Demand indemnity for the material.

20
If Worker Acted Article 474 (3) governs
in Bad Faith
The owner of the material has two options:

1. To appropriate the work for himself without paying anything to the maker; or

2. To demand of the latter (worker) that he indemnify him for the value of the material and the damages he may
have suffered.

Exception: If the value of the work, for artistic or scientific reasons, is considerably more than that of the
material, the owner of the material cannot appropriate the work. In such a case, the owner of the material can
only demand from the worker the value of his materials and the damages he may have suffered.

21
22
 ALLUVION VS. AVULSION

ALLUVION AVULSION

(1) The deposit of the soil is gradual; (1) Sudden or abrupt process may be seen;

(2) Soil cannot be identified; (2) Identifiable and verifiable

(3) Belongs to the owner of property which it is attached to. (3) Belongs to the owner from whose property it was detached.

GE DISTINCTION

ALLUVION/ ACCRETION AVULSION

● No question of transfer of ownership ● There is only a question of ownership when the owner of the
● There is no right to remove it. property whose property it was detached to failed to remove it
within 2 years.
● Someone owns the land that is identifiable

23
 RULES ON CO-OWNERSHIP

RIGHTS OF CO-OWNERS

1. Right to the pro-indiviso share in the property, meaning each has a proportionate interest in the whole property rather than a specified part of it;
2. Right to use the property;
3. Right to the fruits and benefits of the land or thing held in common.
4. Each co-owner has the right to Alienate, Assign, Mortgage, and even Substitute another person in its enjoyment (i.e. substitute a person who is not a
co-owner, such as lessee, usufruct, or guest). (AAMS)

NOTE: Effect of alienation or mortgage is limited to the portion which may be allotted to him in the partition process.

XPN:

TLN: A co-owner cannot alienate rights which are purely personal

Examples:

1. Right to use
2. Right to habitation
3. To make a disposition of the thing different from what was agreed upon by the co-owners or adapted to its nature;

TLN: Any co-owner may extinguish an encumbrance on their real right, such as easement or mortgage, because everything that is beneficial to the community
may represent the others.

OTHER LIMITATIONS

Art. 486. Limitation on Co-Owner’s Right:

(1) To the purpose for which it is intended;

(2) Without prejudice to the interests of the co-ownership;

24
 (3) Without preventing the others co-owners from making use thereof according to their own rights.

MANAGEMENT AND DECISION MAKING

1. Acts of administration require the agreement of the co-owners holding the controlling interest, typically exceeding half of the ownership.
However, for alterations and substantial improvements, the unanimous consent of all co-owners may be required.

2. Alterations and substantial improvements, the unanimous consent of all co-owners are required.

ACTS OF ADMINISTRATION vs. ACTS OF OWNERSHIP

ACTS OF ADMINISTRATION ACTS OF ALTERATION

● Enjoyment of the thing of common property and are transitory Pertains to a more permanent result and relate to the substance or form of the
character i.e. temporary. thing. There is modification of nature, such as an industry or business, in its
● exploitation.

● No modification of nature, such as an industry or business, in its ALTERATION DEFINITION: Act by virtue of which co-owner, in
exploitation. opposition to the common agreement. If there is any, or, in the absence
thereof, to the tacit agreement of all the co-owners, and violating their will,
changes the thing from the state in which the others believe it should remain,
or withdraws it from the use to which they desire it to be intended.

PARTITION AND TERMINATION

Any co-owner can demand at any time the partition of the property unless there is an agreement or legal provision stating otherwise.

25
The partition can be achieved either through legal proceedings or through mutual agreement among the co-owners.

EXPENSES AND CONTRIBUTIONS

Necessary Expenses for preservation or improvement of the property should be shouldered by all co-owners in proportion to their undivided share.

NOTE: If a co-owner makes an expense that benefits all, they have the right to claim a proportionate share of the expense from the other co-owners.

LEGAL REMEDIES

A co-owner has the remedy afforded to all owners.

1. Right to compel contribution from other co-owners for necessary expenses

2. Ejectment (i.e. forcible entry and unlawful detainer);
3. Accion Publiciana
4. Accion Reinvincatoria
5. Right of action against co-owner (Note: Only effect would be to recognize the existence of co-ownership and cannot recover a material and
determinate part of the property.

TERMINATION OF CO-OWNERSHIP

(1) By the consolidation in only one of the owners of all the shares of the others;
(2) By the destruction of the thing or the loss of the right;
(3) By prescription in favor of a third person; and
(4) By the partition which converts into certain and definite parts the respective undivided shares of co-owners.

26
Q: Can the justification of one co-owner that the partition will affect the value or utility of the whole be an excuse for partition?

A: No, that is a necessary incident of co-ownership. (Ferrer et al. v. Rilloraza; Rodriguez v. CFI).

INSTANCES OF PROHIBITED PARTITION:

(1) Agreement by the co-owners allowed by law i.e. not more than 10 years.

NOTE: Indefinite stipulation to make thing undivided is void for being permanent renunciation.

(2) Co-ownership is a condition in a donation or a will;

(3) From the nature of the community it cannot be divided, such as PARTY WALLS and CONJUGAL PARTNERSHIP;
(4) When partition will become unserviceable for the use and purpose for which it was intended.

27
RULES ON POSSESSION AND INTERRUPTION ON POSSESSION

28
REQUISITES OR ELEMENTS OF POSSESSION

1. There must be holding or control of a thing or right.

2. There must be a deliberate intention to possess or animus possidendi.
3. The possession must be by virtue of one’s own right.

ACQUISITIVE PRESCRIPTION v. EXTINCTIVE PRESCRIPTION

Acquisitive Extinctive

It is a method of acquiring property by meeting statutory requirements of Extinctive prescription’ refers to the extinction of a right or claim due to a
continuous possession, which vary by state. In order to ripen into ownership, time lapse. The notion of extinctive prescription encourages claimants to
possession must be in the role of an owner, public, peaceful and pursue claims with due expedition and in a manner that does not unduly
uninterrupted. prejudice a defendant in its defence.

29
 INTERRUPTION ON THE POSSESSOR IN GOOD FAITH

Art. 528

GR:

A possessor in good faith does not lose such character, unless the defects in title are made known to him.

Rights of a possessor in good faith:

(1) Right to be respected of possession;

(2) Right to exclude other by filing ejectment under Rule 70
(3) Accion Interdictal, Accion Publiciana, Accion Reivindicatoria
(4) Right to the fruits of property before interruption of period.
Note: Rights are only limited to fruits and do not extend to those other than fruits, such as trees on orchards, materials from demolition of a
house or any structure, or the part of the treasure pertaining to the owner of the land.

XPN:

(1) From the moment the defects in the title are made known to the possessor in GF.
a. From receipt of summons to appear for trial.
Note: If no date was indicated on the summons in the record, the answer will be adopted.

(2) By extraneous evidence;

(3) By suit of recovery of the property of the true owner (Accion reinvindicatoria).

30
 INTERRUPTION ON THE POSSESSION OF HEIRS

Art. 533

GR:

From the death of the decedent and acceptance of the heir of the hereditary property is uninterrupted or continuous

XPN:

One who renounces an inheritance is deemed to never have possessed the property.

Effect: You can’t count the possession of the one who renounced right over inheritance.

Art. 534

GR:

(1) The Bad faith of the decedent resulting to the wrongful possession of the property does not affect the good faith of his heirs in the absence of bad
faith of the same;

XPN:

(1) Unless there is proof that knew the bad faith of the decedent DURING the latter’s lifetime.

NOTE: Good faith of the heir only begins upon the death of the decedent since succession since the rights of the inheritance are only transmitted from the
moment of death of the decedent.

31
 ACTS THAT DO NOT AFFECT POSSESSION

Effect: No right may be acquired through prescription. Hence, there can be acquisition of ownership.

536 & 537

1. When there is use of force or intimidation by another despite the objection of the current lawful possessor (536)

2. Acts merely tolerate out of neighborliness or familiarity (537)

3. Clandestine or (unlawful) unknown to the owner and to the public (?) (unless

4. Acts of violence (i.e. one takes away the property from another, occupies the property in the absence of another and repels (uses force)
against the latter upon his return to the property regardless of who employs the violence).

Example: Land grabbing in the province ng mga ibang NPA

Effect on possession:

1. Acts are not considered true possession.

2. It does not prejudice the rights of a real possessor.
3. All acts of of the legal possessor arising from possession (i.e. material occupation or fruits) remains uninterrupted.
4. No rights to be respected of possession and writ of preliminary injunction to restore his possession under Art 439 can be availed.

32
 ORDER OF RIGHTS IN POSSESSION

538

(1) Fact of possession between two possessors (no date of possession):

Actual possessor is preferred.

(2) Two possessors at the same time:

The one who first took possession is preferred.

(3) Dates of possession are the same for all possessors:

One who presents the title is preferred.

If all are equal in the 3 conditions:

The thing shall be placed in judicial deposit pending determination of its possession or through ownership through proper proceeding.

33
 RULES ON INTERRUPTION OF CO-POSSESSED PROPERTY

Art. 543 cf 528 (Instances of interruption in possession in good faith)

GR: Upon the partition of the co-ownership, the co-owners shall be deemed to have taken possession of their respective shares not from the time of partition
but from the creation of co-ownership.

Rule if unpartitioned: If there is no partition yet, the interruption in possession of the interest of one, i.e., the abandonment of one co-possessor of his interest
in his respective share of the land and the subsequent adverse claim of a stranger to his land, will not benefit the other co-possessors. Hence, they cannot
include their period of possession for their respective share of the land as a prescription to the adverse claim of a stranger. In other words, the interruption on
the share of one co-possessor affects all the co-possessors.

LOST OF POSSESSION (PADA)

Art. 555

(1) Possession of another, subject to the provisions of Article 537, if the new possession has lasted longer than one year. But the real right of
possession is not lost till after the lapse of ten years;
(2) Assignment made to another either by onerous or gratuitous title;
(3) By the Destruction or total loss of the thing, or because it goes out of commerce;
(4) Abandonment of the thing.

34
RULES ON FRUITS

35
I. Rule on Fruits: (Civil Fruits-Dark Green; Natural/ Industrial-Brown;)

Kind of Fruits (544) Possessor in Good Faith (544) Possessor in Bad Faith (549 & 552)

1. Civil Fruits (544) Entitled to fruits from the start of possession until Not entitled to the fruits. (549)
legal interruption. (554)
Must pay damages as rental from the time
possession started until possession is finally
defeated.

2. Natural/ Industrial Fruits (544)

a. Gathered (544)
Right to retain fruits Must account for fruits and return value of: (i)
fruits actually received and (ii) fruits which the
legal possessor could have received with due care
and diligence.

Must pay damages as reasonable rent for the term

of possession.

But entitled to necessary expenses for

preservation, cultivation and gathering of the
fruits. (549) (1) (Necessary Expenses) (443)
(Expenses in gathering the fruits)

No rights, not even reimbursement of expenses for

b. Pending cultivation (because by right of accession, all fruits
Owner has 2 options: belong to the owner without need to pay
indemnity). (449)
Option 1: Pro-rating (based on period of
possession) between possessor and owner of: Must pay damages as reasonable rent for the term
of possession.
(i) expenses; (545)

(ii) net harvest; (545) And

36
 (iii) charges. (545)

Note: The pro-rata share pertains to the expenses

incurred by both the owner and possessor in GF.
This only pertains to the total deduction from the
total proceeds of the ungathered fruits.

II. Rules on Expenses and Deterioration/ Loss: (546) (Necessary-Red; Useful-Green; Luxurious-Gold; Deterioration-Brown)

Expenses Possessor in Good Faith (546) Possessor in Bad Faith (546)

1. Necessary Expenses Entitled to reimbursement Entitled to reimbursement.

Right of retention pending full reimbursement No right of retention; must vacate Property
(546) (recourse is to file collection cases).

Liable for damages as reasonable rent for the

period of possession.

2. Useful Expenses Owner has 2 options: (546 (2)

Option 1: Reimbursement of either (i) amount

spent or (ii) increase in value with right of
retention until full payment.

37
 Note: Right of retention is included.

Option 2: To allow the possessor to remove the

useful improvement provided that no substantial
damage or injury is caused.

3. Luxurious Expenses (548) Owner has 2 options: Owner has 2 options:

Option 1: To allow the possessor to remove Option 1: To allow the possessor to remove
ornaments if the principal thing suffers no injury. ornaments if the principal thing suffers no injury.
(549) (549)

Option 2: To retain the ornament by refunding the Option 2: To retain the ornaments by refunding the
amount spent for the ornament. (549) value of the ornaments at the time the owner enters
into possession (which means depreciated value).
(549)

4. Deterioration/Loss No liability unless due to fraudulent intent or Always liable whether before or after service of
negligence after service of judicial summons. (552 judicial summons, for any cause, even fortuitous
(1) event. (552 (2))

38