PROPERTY, OWNERSHIP, AND ITS

MODIFICATION
Title I. CLASSIFICATION OF PROPERTY
PRELIMINARY PROVISIONS

ARTICLE 414. All things which are or may be the object of appropriation
are considered either:
(1) Immovable or real property; or
(2) Movable or personal property. (333)
Introductory Concepts
Origin of the Word “Property”

 Etymology of "Property": The word "property" comes from the Latin word proprius, which
means "belonging to one" or "one's own". This shows that the original meaning of property is
closely tied to possession or ownership by an individual.

 Possession and Property: The traditional notion of property is that it refers to things that are
already in the possession of a person. Property is closely connected to the legal or dominion
rights that a person holds over an object.

 Contrast with "Things": The concept of property is narrower than the concept of "things" in
this context. "Things" refers to all objects that exist, whether they are possessed by someone or
not. In contrast, property specifically refers to objects that are in someone's possession or
under their control.

Concept of “Things”
 The concept of property (bienes) is closely related to the concept of things (cosa).
 The Civil Code doesn't explicitly define "property." Instead, it suggests that property refers to
things that can be appropriated, i.e., things that can be owned or controlled by someone.
 There was a time in history when people, particularly slaves, were treated as mere chattels
(property), or things that could be owned and appropriated.
 Over time, however, the practice of slavery was condemned and abolished.
 Today, we make a clear distinction between persons and things:

 Persons are considered the subjects or holders of rights (they have the capacity to own
property and exercise legal rights).
 Things are the objects that can be owned or controlled by persons.
 While a person cannot be considered property, their actions may give rise to rights or
obligations for others (for example, a person’s contract or wrongdoing might create
legal responsibilities).
 Things are external objects, meaning they are separate from human beings.
 However, the concept of things under the Civil Code isn't limited to just physical objects that
can be seen or touched (called corporeal objects).
 It also includes things that don’t have a physical form, such as rights (called incorporeal
objects).

 Thus, the definition of things in the Civil Code includes both tangible objects (like land,
goods, etc.) and intangible items (like legal rights).

 Article 414: This article discusses what can be considered property. It defines "things" as
objects that are susceptible of appropriation (things that can be owned), whether they are real
(immovable like land or buildings) or personal (movable like furniture, cars, etc.).

 Articles 415 and 416: These articles expand the concept of property to include rights as
property.

o Article 415 mentions that real rights (such as ownership or easements) over
immovable property (like land) are considered real property.
o Article 417 explains that personal property includes rights such as obligations (a
duty owed to someone) and actions (legal claims or demands), particularly those
related to movable property or sums of money.

Concept of “Property” under the Civil Code

 The traditional notion of property was that it referred to things already possessed by a
person—things that are under someone's control.
 However, under the Civil Code, the definition of property is broader. It includes not just
things that are already appropriated or possessed but also things that can be appropriated in
the future, even if they are not yet owned or controlled by anyone.
 Article 414 of the Civil Code clarifies that property refers to all things that "are or may be the
object of appropriation." In other words, property is not limited to things someone already
owns, but also to things that can potentially be owned in the future.

 For practical purposes, the terms “property” and “things” are used interchangeably in the
Civil Code, since both refer to things that can be owned or controlled.

Susceptibility to Appropriation

Criteria for Property:

 Not everything can be considered property. For something to be property under the
Civil Code, it must be susceptible to appropriation—meaning it must be possible to take
control over it, either by ownership or by some legal mechanism.
  Article 414 establishes that for a thing to be classified as property, it must be capable of
being appropriated. Therefore, things that are physically impossible to control or
appropriate are not considered property.

Examples of Things Not Considered Property:

 Natural objects like the sun, stars, and ocean are not considered property because their
vastness or immensity makes them impossible to control or own.
 Forces of nature like lightning and rain cannot be appropriated in their natural state
because they are diffused and uncontrollable. However, once humans use technology to
control them (like converting lightning into electricity), they may become property
because they are now under human control.

Things “Outside the Commerce of Man”:

 Some things are considered outside the commerce of man—meaning they cannot be
bought or sold. An example of this is public properties owned by the state, which are
outside the commerce of man and cannot be subject to private contracts or
transactions.
 However, these public properties are still considered property under the Civil Code,
despite being outside the commerce of man. This shows that a thing can be classified as
property even if it is not transferable or available for private use.

Additional Requisites for Property

Two Additional Requirements: In addition to being susceptible to appropriation, some scholars

suggest that property must meet two additional requisites:

 Utility: The thing must be able to serve human needs or wants. In modern times, most
things are useful or capable of fulfilling some human need, so this criterion isn't very
restrictive.
 Individuality/Substantivity: The thing must have a separate existence, meaning it isn’t
just part of something larger. A thing must be independent or distinct from a larger
object to be considered a separate property.

Explanation of “Individuality”:

 Article 414 implicitly requires this criterion, as it suggests that a thing must have an
autonomous existence.
 For example, a part of a whole (like a stone in a ring) may not be considered separate
property while it’s part of the whole. However, once the part is separated, it can
become its own property if it is now capable of serving human needs (like a gemstone
from the ring).
  Similarly, human body parts like hair or teeth are not considered property while they
are attached to a person because the person is not considered property in law.
However, if body parts like hair or teeth are detached, they can be treated as property
because they now have an independent existence.

Classification under Book II of the Civil Code

Immovable vs. Movable:

 Immovable property (also called real property) refers to things that are fixed in place,
like land, buildings, and structures.
 Movable property (also called personal property) refers to things that can be moved,
such as vehicles, furniture, or personal belongings.
 Articles 415 to 417 in the Civil Code discuss the definitions and rules for these
categories.

Movable Property Classification:

 Movable property is further classified into:

o Consumable movable property: These are things that are used up or destroyed
through consumption, like food or fuel.
o Non-consumable movable property: These are things that can be used
repeatedly without being consumed, like a chair or a computer.
 This classification is discussed in Article 418 of the Civil Code

Property from the Viewpoint of Ownership:

 Property of public dominion: This refers to property owned by the state or government,
such as public parks or roads.
 Property of private ownership: This refers to property owned by private individuals or
entities.
 The classification of property based on ownership is discussed in Articles 419 to 425 of
the Civil Code.

Synonymy of Terms:

 The terms “immovable” and “real property” are used interchangeably, as are the terms
“movable” and “personal property”.

Importance of Classification

Acquisitive Prescription (Adverse Possession):

  Movable property: Ownership of movables can be acquired through possession for 4
years in good faith or 8 years without good faith.
 Immovable property: Ownership or real rights over immovables can be acquired
through possession for 10 years (with good faith and title) or 30 years (without need of
title or good faith).
 These periods for prescription vary based on the type of property, which is why
classification is important in determining how long someone can possess property
before claiming ownership.

Contracts of Pledge, Chattel Mortgage, and Real Estate Mortgage:

 Movable property can be used as the subject of pledge (a guarantee or security for a
loan) or chattel mortgage (a mortgage over movable property like a car).
 Immovable property can only be the subject of a real estate mortgage.
 If a chattel mortgage is made over immovable property, it is considered null and void.
Even if it is registered, it will not be valid for third parties.

Formalities of a Donation:

 If the donation involves personal property worth more than P5,000, it must be in
writing, or else it is void.
 If the donation involves immovable property, it must be made in a public document for
it to be valid, and the acceptance of the donation must also be in writing.

Extrajudicial Deposit:

 Only movable property can be the subject of an extrajudicial deposit (a situation where
someone deposits something with a third party for safekeeping without going through
the court system).

Crimes of Theft, Robbery, and Usurpation:

 Theft and robbery can only be committed with personal property (movable property).
 Usurpation (the unlawful possession of real property) can only involve immovable
property. It refers to unlawfully taking or occupying real property without the owner's
permission.

Determining Venue in Legal Actions:

 The classification of property is crucial in determining where a legal case should be

heard.
o If a case involves real property (e.g., ownership or possession disputes), it is
called a real action, and the case must be filed in the court where the property is
located.
 o If the case involves other types of disputes (e.g., personal property or personal
claims), it is called a personal action, and the case can be filed where the plaintiff
or defendant resides.

IMMOVABLE PROPERTY

Art. 415. The following are immovable property:

(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or form an
integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that it
cannot be separated therefrom without breaking the material or deterioration of the
object;
(4) Statues, reliefs, paintings or other objects for use or ornamen- tation, placed in
buildings or on lands by the owner of the immovable in such a manner that it reveals the
intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements intended by the owner of
the tenement for an industry or works which may be car- ried on in a building or on a
piece of land, and which tend directly to meet the needs of the said industry or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breed- ing places of
similar nature, in case their owner has placed them or pre- serves them with the intention
to have them permanently attached to the land, and forming a permanent part of it; the
animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries and slug dumps, while the matter thereof forms part of the bed,
and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over immovable
property. (334a)
No Definition Under the Code
The New Civil Code doesn’t provide a direct definition for immovable property. Instead, it lists
what counts as immovable property. This is because defining it exactly is tricky—immovable
property includes some things that might not seem immovable at first, so the law uses a list to
keep it clear.

Example: Think of a house—even though it's made of materials like wood or concrete, once it's
built on the land and attached to it, it's considered immovable.

Types of Immovable (Real) Property

Immovable property can be divided into four main types:

1. Immovable by Nature: Things that are naturally fixed in one place, like land, roads, and
mines.
o Example: A park is immovable because the land it’s on can’t be moved.
2. Immovable by Incorporation: Things that are attached to the land, making them part of
the property, like buildings, trees, or plants.
o Example: A house built on a plot of land is immovable because the house is
permanently attached to the land.
3. Immovable by Destination: Movable things that are placed on land and made
permanent for a specific use, like machinery or irrigation systems.
o Example: A factory machine that’s installed in a building and can’t easily be
moved is considered immovable by destination.
4. Immovable by Analogy or Law: Things that the law specifically treats as immovable,
such as easements or rights over land.
o Example: A right of way that allows someone to cross your land to get to
another property is treated as immovable.

Real Property under Article 415(1) “Lands, buildings, roads and constructions of all kinds
adhered to the soil …

Lands and Roads

Lands and roads are always considered immovable by nature.

 Example: A highway is immovable because it’s permanently fixed in place and part of
the land.

Building Is Immovable by Incorporation

A building is considered immovable because it’s attached to the land. If it’s securely fixed, it
can’t be moved.

 Example: A skyscraper is immovable because it’s attached to the ground and cannot be
relocated.
 However, if a building is not permanently fixed and can be moved (like a temporary
structure), it may not be considered immovable.

RULE: Must be more or less a permanent structure substantially adhered to the soil and not
mere superimpositions

buildings are considered immovable property due to their permanent attachment to the land.
However, in some cases, a building may be treated as movable property if it's not permanently
fixed to the land or is intended for demolition.

Examples:

 A skyscraper permanently fixed to the land is immovable property.

 A temporary shed that can be moved might be considered movable property.

Bicerra v. Teneza says that a building is immovable because it’s attached to the land, but if the
building is demolished, it no longer qualifies as immovable.

In this case, the plaintiff sued for the return of his house and materials after the defendant
demolished the house. The Court of First Instance (now RTC) dismissed the case, stating that
the issue was under the jurisdiction of the Justice of the Peace Court (now MTC). The Supreme
Court upheld the dismissal, explaining that a house is immovable as long as it’s attached to the
land (Article 415, Civil Code). However, once the house is demolished, it ceases to be
immovable and loses its status as such.

Navarro v. Pineda- In the case at bar, the house in question was treated as personal or movable
property, by the parties to the contract themselves. In the deed of chattel mortgage, appellant
Rufino G. Pineda conveyed by way of "Chattel Mortgage" "my personal properties", a
residential house and a truck. The mortgagor himself grouped the house with the truck, which
is, inherently a movable property. The house which was not even declared for taxation
purposes was small and made of light construction materials: G.I. sheets roofing, sawali and
wooden walls and wooden posts; built on land belonging to another

Buildings are always immovable - This applies only when the building is a “true building” and
not merely superimposed on the soil

Rule is not affected by the fact that the building is treated separately from the land
Leung Yee v. Strong Machinery Co- A building treated separately from the land on which it
stood is immovable property and the mere fact that the parties to a contract seem to have
dealt with it separately and apart from the land on which it stood is no wise changed its
character.

Rule is not affected by the fact that the building is erected on a land owned by another
person

 Even if a building is treated separately from the land it is on, it still remains immovable
property. The law recognizes that a building is inherently immovable, and this status
doesn't change just because the building is treated independently in a contract. A
building can be mortgaged separately from the land, but it remains real property.

 Example:

 If John sells his house separately from the land it’s on, the house is still considered
immovable property. Even though the sale treats the house independently, it’s still
legally considered part of real property. If John later decides to mortgage just the house,
it’s still a real estate mortgage, not a personal property loan.

Evangelista v. Alto Surety- A true building (not merely superimposed on the soil) is immovable
or real property, whether it is erected by the owner of the land or by a usufructuary or lessee.

*ownership will only matter in the 5th and 6th pars of Art 415

 The law treats a building as immovable property regardless of who owns the land it’s
built on. Whether the land owner is also the owner of the building, or if the building is
built by someone else (like a tenant), the building remains an immovable property.

 Example:

 If Carlos builds a house on land owned by Lina, the house is still considered immovable
property, even though Lina owns the land and Carlos owns the house. The building
doesn’t lose its immovable status just because the land is owned by someone else.

XPN: Although ownership cannot determine the status, it does so when combined with other
factors to sustain the interpretation that the parties intended

While ownership alone does not determine whether a property is classified as immovable or
movable, in certain situations, it can influence the classification when combined with other
factors. For example, in cases involving a house built on rented land, the fact that the house is
on a leased property (and the lessee has only temporary rights) can, when considered with
other factors, help interpret the parties' intentions to treat the house as personal property
rather than immovable property.
Example:

In a mortgage contract, John, the lessee of a land, builds a house on the land. The house,
though typically considered immovable, might be treated as personal property in the mortgage
agreement. If the lessee's temporary rights to the land are factored in along with the intent
expressed by the parties (in this case, the mortgagors), the house could be interpreted as
personal property for the purposes of the contract, even though the law usually classifies it as
immovable.

Associated Ins. & Surety Co v. Iya- To cloak the building with an uncertain status made
dependent on the ownership of the land, would create a situation where a permanent fixture
changes its nature or character as the ownership of the land changes hands. It is obvious that
the inclusion of the building, separate and distinct from the land, in the enumeration of what
may constitute real properties provided by Article 415 of the Civil Code, could only mean that
a building is by itself an immovable property.
The classification of property into real or personal is provided for by law and may not,
therefore, be changed by the agreement of the parties
 The law distinguishes between immovable (real) and movable (personal) property.
Despite this, parties to a contract can sometimes treat a real property (such as a
building) as personal property, though this does not change its inherent legal status.

Instance where building is treated as personal property

 Doctrine of estoppel
o By ceding, selling, or transferring a real property (house) by way of chattel
mortgage

The doctrine of estoppel comes into play when a party's actions or agreements (such as
referring to a building as movable in a contract) prevent them from later claiming the opposite.
This is especially relevant when the parties' actions support an interpretation of the property as
personal, and it would be unfair to allow them to change their stance later.

 In the Navarro v. Pineda case, Rufino Pineda treated his house as personal property in a
chattel mortgage, grouping it with movable items like a truck. Later, when disputing the
mortgage, the court applied estoppel because the mortgagor had previously treated the house
as personal property, even though legally a house is typically considered immovable.

 The Tumalad v. Vicencio case followed a similar approach. The house on a rented lot was
treated as personal property in a chattel mortgage agreement. When the mortgagors later
disputed the validity of the chattel mortgage, the court applied estoppel because their earlier
conduct had implied the house was personal property.
Contrast with Other Cases:

 In other cases like Evangelista v. Alto Surety & Ins. Co. and Associated Ins. & Surety Co.
v. Iya, the character of the house (whether it was real or personal property) was central
to resolving the issue. These cases required a precise legal determination of the house's
status, unlike the Navarro and Tumalad cases where estoppel based on the parties'
previous actions was enough to resolve the matter.
 For example, in Associated Ins. & Surety Co. v. Iya, the court had to determine if a
chattel mortgage on the house was valid. Since the house is immovable by nature,
treating it as personal property in the mortgage would invalidate the agreement.

o By treating the property as personal in the chattel mortgage contract

Classification of property into real or personal property, a question of law — the Standard
Oil case
Standard Oil Co. v. Jaramillo - The duties of a register of deeds in respect to the registration
of chattel mortgage are of a purely ministerial* character; and no provision of law can be
cited which confers upon him any judicial or quasi-judicial power to determine the nature of
any document of which registration is sought as a chattel mortgage *Ministerial – without
exercise of discretion
Effect of registration – CANNOT BIND THIRD PERSONS
The registration of the chattel mortgage of a building of strong materials produces no effect as
far as the building is concerned. But as between the parties to said chattel mortgage, they are
not allowed to assail the validity of said agreement under the principle of estoppel
(Associated Ins. & Surety Co v. Iya)
XPN: Foreclosure and execution proceedings – since the doctrine of estoppel cannot bind
third persons
A mortgage creditor who purchases real properties at an extra-judicial foreclosure sale
thereof by virtue of a chattel mortgage constituted in his favor, which mortgage has been
declared null and void with respect to said real properties acquires no right thereto by virtue
of said sale. (Piansay v. David)
RULE: To be immovable, the construction must be attached permanently to the land. It
becomes immovable by incorporation.
It necessarily includes roads.
The pipeline system in question is indubitably a construction adhering to the soil. It is
attached to the land in such a way that it cannot be separated therefrom without dismantling
the steel pipes which were welded to form the pipeline (Meralco Securities v. CBAA)
Real Property under Article 415(2)

Trees, plants, and growing fruits, while they are attached to the land or form an integral part
of an immovable;

Classification

1) By nature – spontaneous products of the soil

2) By incorporation – planted through labor

Trees and plants

GR: Trees, plants and growing fruits, while they are attached to the land, are immovable
property

XPN: If the trees or plants are cut or uprooted for purposes of making them firewood or timber,
they become movable

XPN of XPN: The timber constituted the natural product of the tenement/timber land

Growing fruits

GR: Growing fruits are considered as real property so long as they are still attached to the soil

XPN: May be treated as personal property pursuant to the provisions of Art 416(2) of the NCC

1) Ungathered fruits are considered personal property for the purpose of sale of the whole or
part of the crops

2) Ungathered fruits have the nature of personal property for purposes of attachment and
execution and in applying the provisions of the Chattel Mortgage Law and Act 1508 (Sibal v.
Valdez)

***Once they are detached from the soil they are no longer considered as real property

Real Property under Article 415(3)

Everything attached to an immovable in a fixed manner, in such a way that it cannot be

separated therefrom without breaking the material or deterioration of the object;

RULE: Must be incorporated in the immovable in a fixed manner

 Attachment in a Fixed Manner:

 Under Article 415(3) of the Civil Code, a property is considered immovable (real
property) if it is attached to an immovable (land or building) in such a fixed manner that
it cannot be removed without damaging or deteriorating the object to which it is
attached.
 Example: Steel towers like those used by Meralco are not considered immovable under
this provision because they are bolted together and can be disassembled without
causing damage, meaning they are not permanently attached.

 Who Can Attach the Property?:

 The attachment or incorporation of the property to the immovable does not necessarily
have to be done by the owner of the land. As long as the attachment is in a fixed and
permanent manner, the property can be classified as immovable.

 Intent of the Parties May Override Physical Attachment:

 Even if a property is physically attached in a manner that makes it seem like immovable
property, the intent of the parties can still play a significant role in determining its
status. This is especially relevant when there is an agreement that treats the property as
personal property (e.g., in a contract of mortgage).
 The principle of estoppel applies here, meaning that if the parties agree to treat the
property as personal property, they are bound by this agreement, even if the property is
physically fixed to the land.

 Tsai v. Court of Appeals (2001):

 In this case, Evertex Mills mortgaged both land and machinery to PBCom in separate
real and chattel mortgages. When the company was sold, the new owner, Ruby Tsai,
contended that the machinery, though fixed to the land, was not real property. The
Supreme Court ruled that the machinery, despite being bolted or cemented to the land,
was still treated as chattel (personal property) by the parties, as indicated in their
mortgage agreements.
 The Court applied the principle of estoppel, stating that even though the machinery
appeared to be immovable by nature, it was clearly treated as personal property by the
parties in the mortgage contracts. Therefore, despite the physical attachment, the
intent of the parties prevailed, and the machinery was considered personal property.

Real property under Article 415(4)

Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on
lands by the owner of the immovable in such a manner that it reveals the intention to attach
them permanently to the tenements;
[7.1] Requisites for Real Property by Destination

The properties specified in Article 415(4)—such as statues, reliefs, paintings, and other objects
intended for use or ornamentation—become immovable by destination if the following
conditions are met:

1. Placement by the owner or their agent: These objects must be placed in buildings or on
lands by the owner of the immovable property or by his agent. This ensures that the
owner or an authorized agent is responsible for incorporating these objects into the
immovable property.
2. Intended to be permanent: The attachment of these objects to the immovable property
must be intended to be permanent. If the object is placed temporarily or could be
removed without altering the immovable, it does not qualify as immovable property by
destination.

[7.2] Distinction Between Paragraphs 3 and 4

 Paragraph 4 focuses on statues, paintings, and other objects meant for decoration or
functional ornamentation, and it is essential that these objects are permanently
affixed. In contrast, paragraph 3 refers to properties that are immovable by nature (like
buildings or objects permanently incorporated) and cannot be separated from the
immovable without damage.
 Key Differences:
1. Ownership/Agency: In paragraph 4, the attachment must be by the owner or an
agent of the owner. In paragraph 3, it doesn't matter who performs the
attachment.
2. Possibility of Separation: Paragraph 3 requires the attachment to be indivisible
(i.e., you cannot separate the object from the land without breaking or damaging
either the object or the immovable). In paragraph 4, the attachment can be
separated without damaging the immovable or the object.

Real Property under Article 415(5): "Machineries, receptacles, instruments or implements"

[8.1] Immovable by Destination in Paragraph 5

 Properties covered: This includes machineries, receptacles, instruments, and

implements that are typically movable, but they can be classified as immovable if they
are intended for use in the industry or work conducted on the immovable property
(building or land).
 Conditions for becoming real property:
1. Machinery, receptacles, instruments, or implements: These objects must be of
the nature described.
 2. Placement by the owner or his agent: These items must be placed by the owner
of the tenement or by their agent (as in the case of property owned by the
owner’s agent, like a manager).
3. Existence of industry or work: There must be an industry or work carried out in
the building or on the land where the items are placed.
4. Purpose: The items must directly meet the needs of the industry or work for
which they are installed, serving an essential and principal function in the
operation of the business or industry.

[8.2] Properties Contemplated Under Paragraph 5

 Machinery, receptacles, instruments, and implements are the primary types of

property considered under this provision.
o For example, in the Board of Assessment Appeals case, steel towers constructed
by Meralco were not considered real property by destination because they were
not machinery or receptacles.
 Not all heavy items qualify: If something is heavy or affixed to land or a building but is
not an instrument essential to industry, it will not be considered immovable by
destination. Only properties that are required for industrial purposes are considered.

[8.3] Placed by the Owner or by His Agent

 Ownership requirement: Machinery or implements only become immovable if placed

by the owner or his agent. This does not apply if they are placed by someone who has
only a temporary right to the property (such as a tenant or usufructuary).
 Davao Sawmill Co. v. Castillo case clarification: If machinery is placed by a tenant or
person with temporary rights, it does not become immovable unless explicitly stated in
the lease agreement that it will be transferred to the property owner upon lease
termination (acting as an agent of the owner in this case).

[8.4] Machinery Must Meet the Needs of the Industry

 Essential and principal nature: For machinery to become immovable, it must be an

essential and principal element of the industry or work. If the machinery or equipment
is merely incidental and not essential to the industrial process, it remains movable.
 Examples:
o Essential: Equipment used in a brewery for the production of beverages is
essential to the brewery’s operation, thus becoming immovable.
o Incidental: A cash register in a restaurant or office equipment in a hotel, though
important, are not essential to the business’s function. They are considered
incidental and remain movable.

 Mindanao Bus Co. v. City Assessor and Treasurer case: The Supreme Court ruled that
tools and equipment in a bus company’s repair shop were incidental and not essential
 to the business of transporting passengers and cargo. Therefore, they remained
movable.

[8.5] Essential and Principal Elements

 The movable item must be essential and principal to the industry’s operation. This
ensures that such items are integral to the business’s core functions.
o Examples of essential machinery: A sugar refinery's machinery, or a sawmill's
cutting equipment.
o Examples of incidental tools: A cash register in a restaurant or repair tools in a
bus company.

[8.6] Industry or Work Must Be Carried On in a Building or on a Piece of Land

 Location of the Industry: The industry or work must be conducted within a building or
on a piece of land. The location is significant as it ties the machinery or implements to a
permanent structure used for industry or work. Without a permanent structure for the
industry, the machinery would remain movable.
o In Mindanao Bus Co., the repair shop where the machinery was used did not
meet the requirement of being a permanent structure dedicated to the industry
(passenger transport), which led the court to classify the equipment as movable.

 Certainly! Here’s the updated version of the section, with the addition of [8.7]
Application of the Doctrine of Estoppel in Article 415(5):

[8.7] Application of the Doctrine of Estoppel in Article 415(5)

 The doctrine of estoppel has been applied by the Supreme Court with respect to
properties that are considered immobilized due to their destination or purpose under
Article 415(5). This doctrine holds that, in certain cases, parties may be prevented from
denying the classification of their property based on prior agreements or actions, even
when the property would otherwise be considered immovable by its use.
 Serg’s Products, Inc. v. PCI Leasing and Finance, Inc.

 In Serg’s Products, Inc. v. PCI Leasing and Finance, Inc., the Supreme Court addressed a
scenario where machinery, although essential and principal to a chocolate-making
business, was treated as personal property under a lease agreement. PCI Leasing and
Finance, Inc. (PCI) had entered into a lease with Serg’s Products, Inc. (SPI), where the
machinery was specifically characterized as personal property, despite its essential role
in SPI's operations.
 When SPI defaulted on payments, PCI filed for a writ of replevin, seeking the return of
the machinery. SPI argued that the machinery was actually immovable due to its
permanent use in the business. However, the Court held that, despite the machinery's
integral role in the industry, SPI was estopped from denying its characterization as
 personal property. The Court explained that SPI had agreed in the lease contract that
the machines were personal property, and it was therefore precluded from arguing
otherwise.
 The Court noted that this estoppel applied only to the parties involved in the lease
agreement. In other words, the decision was binding only on SPI and PCI. This meant
that SPI could not challenge the machinery's classification as personal property between
the contracting parties, but the ruling did not extend beyond them.
 Comparison with Ago v. Court of Appeals

 This ruling in Serg’s Products was distinguished in Ago v. Court of Appeals, where the
Court clarified that the doctrine of estoppel did not apply in a case involving a chattel
mortgage contract. In Ago, machineries had been mortgaged, and later, they were
permanently installed in a building and became part of the real property under Article
415(5). The Supreme Court ruled that the machinery had become immovable due to its
attachment to the land, thus converting it into real estate. The Court emphasized that,
in the case of the chattel mortgage, the interests of a third party (Golden Pacific
Sawmill, Inc.) would be prejudiced by applying estoppel, because Golden Pacific was
not a party to the contract and was not bound by the prior classification of the
machinery as personal property.
 Makati Leasing and Finance Corp. v. Wearever Textile Mills, Inc.

 The doctrine of estoppel was also applied in Makati Leasing and Finance Corp. v.
Wearever Textile Mills, Inc., where machinery that had been mortgaged was seized
following a default. The Supreme Court ruled that, even though the machinery became
immovable by destination due to its installation in the factory, the parties involved in
the mortgage had treated the machinery as personal property under their contract.
Therefore, the mortgage was enforceable as if the machinery were personal property,
and the Court stressed that the parties involved were estopped from denying that
characterization.
 In this case, the Supreme Court further explained that parties to a contract can treat
items that would otherwise be considered real property as personal property, provided
no third-party interests are prejudiced. This stance was affirmed in the Tumalad case,
where it was ruled that even a house built on land not owned by the builder could still
be treated as personal property if the parties to the contract so agreed, as long as no
third-party rights were harmed.

Real property under Article 415(6)

Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in
case their owner has placed them or preserves them with the intention to have them
permanently attached to the land, and forming a permanent part of it; the animals in these
places are included;
[9.1] Animal Houses and Pigeon Houses, Etc.

The structures mentioned in paragraph 6 of Article 415—such as animal houses, pigeon-

houses, and similar structures—are immovable by destination. The Civil Code provides that
these structures become real property if they are placed by the owner of the land, thus
attaching them to the land in a way that gives them the nature of real property. However, even
if these structures are not placed by the owner, they may still be classified as real property
under paragraph 1 of Article 415, which considers constructions that are attached to the soil as
real property, provided that the attachment is permanent in character.

In summary, the critical factor for these structures to be considered real property by
destination is the intent of permanence, whether or not the owner of the land is the one who
physically places them.

[9.2] Animals Included

It is important to note that the animals housed in the structures referred to in paragraph 6—
such as those in pigeon-houses, beehives, fishponds, or breeding places—are generally
considered real property by destination as well. However, under certain circumstances and
specific laws, these animals may be classified as personal property.

For instance, the Revised Penal Code treats fish in fishponds as personal property for purposes
of theft. This is an example of the special provision mentioned in Article 416, which allows
certain properties to be treated as personal property by virtue of specific laws. Therefore,
while animals in these structures are treated as real property for general purposes, they may
be classified as personal property in certain legal contexts, depending on the applicable law.

Real Property under Article 415(7): Fertilizer actually used on a piece of land;

10] Fertilizers

Fertilizers are immovables by destination under Article 415(7). The Code specifies that
fertilizers must actually be used on the land for them to be classified as real property. This is
because the owner’s intention to use them for the benefit of the land must be clear and
beyond doubt.

For instance, if fertilizers are kept in a farmhouse but not yet used on the land, they will not be
considered immovable. Therefore, it is the actual use of the fertilizers on the land that qualifies
them as real property.

To clarify, fertilizers that are stored in a location without being used are considered movables,
not immovable property by destination. This distinction ensures that only those fertilizers
actively serving the agricultural purpose of the land are considered part of the real property.
Real Property under Article 415(8) Mines, quarries, and slag dumps, while the matter thereof
forms part of the bed, and waters either running or stagnant;

[11.1] Mines, Quarries, and Slag Dumps

Under Article 415(8), mines, quarries, and slag dumps are considered immovable property as
long as the matter or material they contain is still part of the bed (the land or soil). This means
that as long as the minerals, rocks, or other materials are unsevered or still attached to the
land, they remain immovable.

However, once the materials from the mine, quarry, or slag dump are separated or extracted
from the bed, they are no longer considered part of the land. Instead, they are classified as
minerals or raw materials and thus become personal property. In essence, the key factor is
whether the materials are still part of the land (immovable) or severed from it
(movable/personal property).

[11.2] Waters

The term waters in Article 415(8) refers to running or stagnant waters that are found in their
natural beds. This includes flowing streams, rivers, and canals, as well as other bodies of water
that are in their natural state, such as lakes or ponds that have not been artificially altered.

These bodies of water are considered immovable property as long as they remain in their
natural beds. Once they are diverted or separated from these natural beds (for example, when
water is used in irrigation or stored in reservoirs), they may no longer be classified as
immovable property under this section. However, in their natural state, they are firmly
considered part of the land.

Real Property under Article 415(9): Docks and structures which, though floating, are intended
by their nature and object to remain at a fixed place on a river, lake, or coast;

rticle 415(9) of the Civil Code provides that docks and structures, even if they are floating, are
considered immovable property as long as they are intended by their nature and purpose to
remain fixed in a specific location on a river, lake, or coast.

In other words, the classification of these structures as immovable property is based on their
intended permanence in a particular spot, despite their ability to float. The primary factor in
determining whether such a structure qualifies as real property is its intended use and
attachment to a fixed location.

Case Example: Power Barges

In a case involving FELS Energy, Inc., the Provincial Assessor of Batangas City assessed a real
estate tax on power barges that were moored in Balayan Bay in Calaca, Batangas. The question
was whether the power barges, which are floating structures, should be considered real
property.

The Supreme Court ruled that these power barges were indeed immovable property. The court
categorized them as immovable by destination under Article 415(9) of the Civil Code, because
they were intended to remain in a fixed place in the bay. Even though they are floating, their
purpose and use dictated that they should be treated as immovable property.

Real Property under Article 415(10) Contracts for public works, and servitudes and other real
rights over immovable property

Article 415(10) of the Civil Code includes real rights over immovable property under the
category of real property. The concept of real rights is crucial to understanding how such rights
are classified and treated in legal contexts.

13.1 Rights as Property

The law recognizes that rights can be considered property, provided they are patrimonial (i.e.,
capable of being valued in money or attached to a person's assets). These patrimonial rights
can either be:

 Real rights: These are rights that a person holds over a specific object, and they are
enforceable against the whole world. Examples of real rights include ownership,
usufruct, and easements.
 Personal rights: These rights are held by one individual over another, such as the right
to demand specific actions or fulfillments from someone else, often in a contractual
context.

13.2 How Rights are Classified

A key consideration in classifying rights as real or personal property depends on:

1. Whether the right is a personal or real right.

2. Whether the subject matter of the right is personal property or real property.

 Real rights: If the subject matter is real property (e.g., land or a building), the real right
is classified as real property. For instance, a real estate mortgage is a real right over
immovable property and thus considered real property.
 Personal rights: These are generally classified as personal property, regardless of the
subject matter. For example, a chattel mortgage is a real right, but since it is over
personal property (e.g., machinery or goods), it is classified as personal property.
14. Definition of Real Property in Real Estate Taxation

In the context of real estate taxation, there is some ambiguity regarding which law should be
applied to classify properties for taxation purposes. This is especially evident in borderline
cases where the properties involved do not clearly fall under Article 415 of the Civil Code but
may still be subject to real property tax under existing tax laws.

The debate centers around whether classification for taxation should follow the Civil Code or
tax laws such as the Assessment Law (Commonwealth Act No. 470) or the Real Property Tax
Code (Presidential Decree No. 464). The issue arises particularly in cases involving machinery
or improvements.

14.1 Concept of Real Property in Realty Taxation

 The Supreme Court has ruled in various cases that properties might be taxed based on
the provisions of the Assessment Law or the Real Property Tax Code, even when they
do not meet the criteria in Article 415. In cases like Benguet Corp. v. Central Board of
Assessment Appeals, it was noted that the Real Property Tax Code does not specifically
define real property but lists categories such as land, buildings, machinery, and
improvements.
 Court Decisions:
o Board of Assessment Appeals v. Manila Electric Co.: The Court ruled that certain
steel supports or towers were not subject to realty tax as they did not meet the
criteria of real property under Article 415.
o Meralco Securities Industrial Corp. v. CBAA: The Court upheld realty tax on
pipelines as they were attached to the soil and thus classified as real property
under Article 415.
o Caltex (Phils.), Inc. v. CBAA: The Court ruled that certain equipment and
machinery permanently attached to a gas station were subject to realty tax,
emphasizing that machinery is classified as real property for tax purposes,
especially if it is essential to the operation of a business.

14.2 Machinery and Improvements Subject to Realty Tax

The Real Property Tax Code and the Local Government Code of 1991 define machinery and
improvements differently from Article 415 of the Civil Code, providing additional criteria for
realty tax classification:

 Machinery:
o Old Real Property Tax Code: Defines machinery as machines, contrivances,
instruments, and apparatus attached to real estate. It includes equipment
essential for production in manufacturing, industrial, or agricultural businesses.
 o Local Government Code (1991): Extends the definition of machinery to include
mobile, self-powered, or self-propelled machinery that is necessary for a
business or industry.

 Improvements:
o Both the old Real Property Tax Code and the Local Government Code (1991)
define improvements as additions or ameliorations made to property that
enhance its value, beauty, or utility.
o In Benguet Corp. v. CBAA, the tailings dam was classified as an improvement
because it was permanent and enhanced the utility of the mine.

14.2.1 Machinery

Under the tax laws, for machinery to be subject to realty tax, it must be essential or necessary
to the operation of the business or industry, even if it doesn't strictly meet the definition of real
property under Article 415. In Caltex (Phils.) v. CBAA, machinery at a gas station was taxed
because it was essential to the business operation.

14.2.2 Improvements

Similarly, for improvements to be taxable, they must enhance the value, utility, or purpose of
the real property to which they are attached, as seen in the Benguet Corp. and Manila Electric
Co. cases, where structures were considered improvements due to their permanent nature and
value enhancement.
OWNERSHIP IN GENERAL

Art. 427. Ownership may be exercised over things or rights. (n)

1. The Relationship Between Property and Ownership

 Property comes from the Roman word proprius, meaning "one’s own," which directly links to
the idea of ownership. In Roman law, the term proprietas refers to ownership, while dominium
refers to the master’s control over a thing, typically within a household. The Roman master of
the house was called dominus, and their authority was called dominium.
 In contrast to modern terminology, in Roman law, property and ownership were essentially the
same, as they both focused on the relationship between a person and a thing.

However, in the Civil Code:

 Property refers to the thing itself, like land, a house, or even intangible rights that can be
owned.
 Ownership, on the other hand, refers to the bundle of rights a person has over that property.
So, the thing is the subject matter of ownership.
 Example: If you own a house (property), you have the rights to enjoy, use, sell, or dispose of it
(ownership).

2. Civil Code's List of Rights Included in Ownership

The Civil Code enumerates several rights that form the essence of ownership, even though it
doesn't define ownership explicitly. Here are the important rights outlined:

1. Right to enjoy the property – This means the right to use the property in any lawful way. For
example, living in a house or renting it out.
2. Right to dispose of the property – The right to sell, transfer, or gift the property. For instance,
selling your car to another person.
3. Right to recover the property – If someone else possesses your property (e.g., someone
borrowing your car), you can demand it back.
4. Right to exclude others – You have the right to prevent others from using or accessing your
property. This could mean keeping someone off your land or stopping them from using your
property without permission.
5. Right to enclose or fence the property – You can build barriers around your property to protect
it from intrusion.
6. Right to indemnity for damages – If someone interferes with your ownership, you can claim
damages (e.g., if someone unlawfully uses or damages your land, you can seek compensation).
7. Right to just compensation in case of eminent domain – If the government takes your property
for public use, you have the right to receive compensation.
8. Right to construct works, plantations, or excavations – You can build, plant, or dig on your
property as you see fit.
9. Right to hidden treasure – If you find hidden treasure on your property, you have the right to
keep it.
 10. Right to accessions – Any additions made to the property (e.g., natural growth like trees or
improvements) belong to the owner.

Example: If you own a piece of land, you can fence it (right to enclose), plant trees (right to
construct), and stop anyone from using it without your permission (right to exclude).

3. Ownership as a Real Right

Ownership is considered a real right (jus in rem), which means it applies to a specific thing and
allows the owner to exclude everyone else from using or accessing that thing.

 Real right (jus in rem) is the right to control a specific object, and it applies universally
to everyone. For example, if you own land, you can exclude any person (except for
specific legal exceptions) from using or enjoying that land.
 In contrast, a personal right (jus in personam) involves a right that can only be
enforced against specific individuals. For example, if someone owes you money, you
have a personal right to demand that payment, but only from that person.
 Ownership as a real right: It gives the owner the power to exclude all other people from
using the property. If someone illegally trespasses on your land, you can stop them and
take legal action.

Example of real right: If you own a house, you can exclude anyone from living there without
your permission (your right is enforceable against everyone). If someone owes you money (a
personal right), only they are obligated to fulfill that payment.

4. Other Real Rights Besides Ownership

The passage highlights that ownership is not the only real right under the Civil Code. Other real
rights also exist, such as possession, usufruct, easement, pledge, and mortgage.

These other real rights are more limited compared to ownership:

 Possession: This refers to physically holding or controlling property but not necessarily
owning it. Possession gives you the ability to use or control something, but it's not as
complete as ownership.
 Usufruct: This is the right to use and benefit from someone else's property for a period of
time. For example, if someone gives you the right to use their land, you can enjoy the
fruits (like crops) of that land but do not own it.
 Easement: This is a right to use a portion of someone else’s property for a specific
purpose (like a right of way to pass through their land).
 Pledge and Mortgage: These are security interests in property that allow someone to
take control of the property if a debt is not paid.
 Jus in re aliena refers to real rights over someone else’s property, which are more
restricted than full ownership. These are dependent rights, meaning they require the
existence of full ownership.
  Ownership is the most complete form of real right because it gives the owner the most
extensive control over the property. Other rights like usufruct or mortgage restrict the full
exercise of ownership by temporarily taking certain rights away from the owner.

Example: If you have a usufruct over a piece of land, you can use and earn income from it (like
growing crops), but you do not have the right to sell it or exclude others (which the actual owner
would have).

5. Objects of Ownership

 The subject matter of ownership can be either a thing or a right. According to Article
427 of the Civil Code, the thing typically refers to tangible, material objects (like land or
cars), but rights (such as the right to receive payment, or the right to a property) can also
be owned.
 Important distinction: In Article 414, the term "things" includes both material objects
and rights. This is why it would have been clearer if Article 427 had referred to
ownership as being over property, which includes both things and rights.

Art. 428. The owner has the right to enjoy and dispose of a thing, without other limitations
than those established by law. The owner has also a right of action against the holder and
possessor of the thing in order to recover it. (348a)

Ownership Rights

1. Jus Utendi (Right to Use)

This refers to the right of the owner to use the property for its intended purpose, but without
destroying its substance. This right is typically applied to property that is not consumed through
use, such as land or a vehicle.

 More Detail: The right to use does not extend to a power that leads to the destruction or
severe alteration of the property. For example, if you own a car, you can drive it, but you
can’t use it in a way that would ruin its functionality (such as racing it to the point of
breaking down).
 Example: If you own a garden, you can use it by planting flowers, growing vegetables,
or simply enjoying the view, but you cannot use it in such a way that destroys the plants
or soil unless you intend to change the nature of the property (like turning it into a
parking lot).

2. Jus Fruendi (Right to the Fruits)

The right to the fruits of the property refers to the right to enjoy the profits, income, or
products that come from owning the property. This could mean the natural fruits (like crops
grown on land), or civil fruits (like rent or income from a lease).
  More Detail: This is broader than simply enjoying the physical property itself. It includes
rights over the revenue or products that the property generates. For example, if you own
an apartment building, you have the right to collect the rent payments (the fruits of the
property).
 Example: You own an orchard, and the trees bear apples. You are entitled to harvest and
sell those apples. Alternatively, if you rent out your house, the rent payments you receive
are the fruits of your ownership.

3. Jus Disponendi (Right to Dispose)

This is the right to alienate, transfer, or encumber the property. It includes the ability to sell,
donate, mortgage, or lease the property. The key feature of this right is that the owner has the
power to change the ownership or the rights associated with the property.

 More Detail: This right allows an owner to engage in legal transactions that can transfer
the property to another party or modify the rights the owner has over the property. This
could involve selling it, donating it, leasing it, or putting it up as collateral.
 Example: You might decide to sell your car to another person (alienation), or you could
lease your house to a tenant for a certain period (which temporarily limits your right to
possess it). You could also mortgage your house to secure a loan from the bank.

4. Jus Abutendi (Right to Abuse/Consume)

This right applies primarily to consumable goods, which are things that get used up through
consumption. The right to consume (or destroy) a thing means the owner can use it in a way that
exhausts its substance, like eating or drinking.

 More Detail: Jus abutendi applies to consumables, such as food or fuel. The right does
not extend to non-consumable property like land, buildings, or equipment (unless used
in a way that destroys them). For example, if you own a bottle of wine, you have the right
to consume it, but you can’t destroy the wine in a way that harms others (like spilling it
intentionally on purpose).
 Example: You own a loaf of bread, and you eat it. The bread is consumed by your action,
and its original form (as bread) is gone. This is an example of jus abutendi in action.

5. Jus Possidendi (Right to Possess)

The right to possess means the exclusive right to control and enjoy the property, which
includes the physical occupation and control of the thing. This right is closely linked to the right
to enjoy and the right to dispose.

 More Detail: This is a fundamental right tied to ownership. Possession allows the owner
to exclude others from their property. It also gives them the ability to enjoy the
property’s benefits and dispose of it. Possession also comes with the power to exclude
others from the property, even by using force, if necessary, but always through legal
channels.
  Example: You own a house and have the right to physically live in it, or exclude others
from entering or using it. If someone tries to live in your house without permission, you
have the right to remove them (following proper legal processes) because you hold
exclusive possession.

6. Jus Vindicandi (Right to Recover)

This right refers to the owner’s right to reclaim possession from someone who is wrongfully
holding it. It includes filing lawsuits to recover the property and is closely related to the idea of
ownership.

 More Detail: If someone is unlawfully in possession of your property (for example, if

they’re trespassing or squatting), jus vindicandi gives you the right to recover that
property through the court system. This might involve going to court to file a claim that
establishes your right to ownership and possession.
 Example: Someone occupies your land without your consent. You can file an accion
reivindicatoria (recovery of possession) to reclaim your land based on your ownership
rights.

Expanded Explanation of Legal Actions to Recover Possession

Accion Interdictal (Summary Legal Action)

 Description: A summary action to recover possession when someone has been

unlawfully deprived of it through force, intimidation, or stealth. This action is typically
used when the person who is holding the property is doing so without the legal right to do
so, and it is considered an urgent legal remedy.
 Example: If someone breaks into your house and begins living there without your
permission, you can file for forcible entry, which is a type of accion interdictal. You
can also file for unlawful detainer if someone is overstaying their lease or refusing to
vacate the property after their right to stay has expired.

Accion Publiciana (Plenary Action)

 Description: This action is used to recover possession after a longer period of unlawful
detention (typically more than a year). It is a more comprehensive action than accion
interdictal because it can resolve questions of who has the better right to possession,
even if ownership is not being directly challenged.
 Example: If you have rented out a property, and after the lease ends, the tenant refuses to
vacate, you can file for accion publiciana if more than a year has passed. In this case,
you are seeking to re-establish your right to possess the property, but not necessarily
claiming ownership.
Accion Reivindicatoria (Action to Recover Ownership)

 Description: This is an action for recovering possession based on ownership. It is an

action that seeks the return of property to the rightful owner, as it directly relates to
proving ownership.
 Example: You are the rightful owner of a piece of land, but someone else is occupying it.
You file accion reivindicatoria to recover the land. This action is fundamentally about
your ownership, and the court will need to determine whether you have the legal right to
reclaim possession based on that ownership.

Key Legal Distinctions

Forcible Entry vs. Unlawful Detainer

 Forcible Entry: This is when someone initially gains possession unlawfully through
force, intimidation, stealth, or threats. The owner was previously in physical possession.
o Example: A person breaks into your home and starts living there. You can file for
forcible entry to reclaim possession.

 Unlawful Detainer: This occurs when someone continues to occupy property after
their right to do so has expired, often due to a contractual relationship, such as a lease.
o Example: Your tenant refuses to vacate after the lease term ends. You can file for
unlawful detainer.

Accion Publiciana vs. Accion Reivindicatoria

 Accion Publiciana: Focuses on recovering the right to possess based on a better claim
to the property. This action is used when a person is unlawfully holding possession for
over a year but may not necessarily involve ownership disputes.
o Example: A tenant refuses to leave after the lease expires, and after more than a year,
the landlord files for accion publiciana to recover possession.

 Accion Reivindicatoria: Based on ownership rights, this action is specifically for when
the owner seeks to recover possession of their property because they have ownership
over it.
o Example: You are the rightful owner of a piece of land, but someone else is occupying it
without your consent. You file for accion reivindicatoria to recover possession as the
rightful owner.

Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from
the enjoyment and disposal thereof. For this purpose, he may use such force as may be
reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion
or usurpation of his property. (n)
1. What is Article 429?

Article 429 of the Civil Code gives the owner or lawful possessor of a property the right to
exclude others from its use or disposal. If someone tries to unlawfully invade or take over the
property, the owner or lawful possessor may use reasonable force to stop or prevent the
invasion.

This legal principle is known as the Doctrine of Self-Help and allows immediate protection of
property without first going to court. However, the force used must be reasonable—it cannot
be excessive or abusive.

2. The Doctrine of Self-Help

 The owner or lawful possessor has the right to enjoy their property without interference.
 If someone tries to take or invade the property unlawfully, the owner can act immediately
using reasonable force.
 The doctrine only applies at the moment of invasion or an imminent threat—it cannot be used
to take back property already lost.
 If possession has already been taken away, the owner must go to court (e.g., file an ejectment
case) instead of using force.

3. Who Can Invoke the Doctrine?

The doctrine of self-help applies to:

 Owners – People who legally own the property (e.g., land title holders).
 Lawful Possessors – People who have the legal right to use the property (e.g., tenants, lessees,
caretakers).

This means that even a person who does not own the property but lawfully possesses it (such
as a tenant) can invoke self-help to protect their right of possession.

4. When Can the Doctrine Be Used?

The doctrine can be invoked only at the moment of an unlawful invasion or usurpation of the
property.

 "Repel" – Used to stop an ongoing invasion (e.g., a person forcefully enters your house, and you
push them out).
 "Prevent" – Used to stop an imminent threat of invasion (e.g., someone is trying to break your
fence to enter your property, and you stop them).
⚠️When Can’t You Use Self-Help?

 If you have already lost possession, you cannot use force to take it back.
 Instead, you must file a case in court to recover the property (e.g., ejectment case under Article
536 of the Civil Code).
 Using force after losing possession may result in criminal liability (e.g., illegal eviction or
property damage).

5. Case Examples

Case 1: German Management & Services, Inc. v. CA (1989)

📌 Facts:

 The owners of a land in Antipolo (who lived in the U.S.) authorized German Management &
Services, Inc. to develop their land into a subdivision.
 Some portions of the land were already occupied by local settlers who refused to leave.
 The company forcibly removed their barbed wire fences, bulldozed their rice fields, and
destroyed their fruit-bearing trees and crops.
 The settlers sued the company for forcible entry (ejectment case).

📌 Ruling:

 The Municipal Trial Court and Regional Trial Court dismissed the settlers' case, saying the
company acted under the doctrine of self-help (Article 429).
 However, the Supreme Court reversed the decision, ruling that:
o The company could not invoke self-help because the settlers were already in
possession of the land.
o Self-help can only be used at the moment of invasion, not after possession has been
lost.
o Since the settlers were in possession, the company should have filed an ejectment case
instead of taking the law into their own hands.

📌 Lesson:

 Once someone has taken possession of your property, you cannot remove them by force.
 You must go to court and file a case for recovery.

Case 2: People v. Goya (1965)

📌 Facts:
  A security guard, Goya, was watching over a warehouse owned by the Cagayan Valley
Agricultural Corporation.
 One night, he saw a thief stealing a sack of palay (rice grain) from the warehouse.
 To stop the thief, he fired a gunshot, hitting the thief in the back.
 The thief was hospitalized for 18 days, and Goya was charged with frustrated homicide.
 Goya argued that he acted in defense of property under Article 429.

📌 Ruling:

 The Court of Appeals ruled that:

o Defense of property must be coupled with an attack on the owner (or their lawful
possessor).
o Since the thief did not attack Goya, the use of force was not justified under the
doctrine of self-help.
o However, the court downgraded the charge from frustrated homicide to less serious
physical injuries, recognizing that Goya was trying to defend the warehouse.

📌 Lesson:

 You cannot use deadly force to defend property unless your life is also threatened.
 Defense of property is not as important as the right to life and limb.

Case 3: People v. Narvaez (1983)

📌 Facts:

 Narvaez was living in a house on land that was being disputed in court.
 One day, workers sent by Davis Fleischer (son of the landowner) started destroying the walls of
his house to fence the land.
 Narvaez asked them to stop, but Davis Fleischer insulted him and told them to continue.
 Feeling trapped inside his own house, Narvaez took a shotgun and killed two men.
 He was charged with murder.

📌 Ruling:

 The Supreme Court ruled that:

o Narvaez’s property was under unlawful invasion, so he had the right to defend it.
o However, his reaction (killing two men) was excessive.
o The Court credited him with the mitigating circumstance of "incomplete defense of
property", meaning his sentence was reduced.

📌 Lesson:

 You can defend your property, but the force used must be reasonable.
 Killing or causing serious harm may result in criminal liability if excessive.
6. Summary of Key Lessons
Can Self-Help Be
Situation What Should You Do?
Used?

Someone is currently invading your Use reasonable force to repel the

✅ Yes
property (e.g., breaking in, squatting) invasion

Someone is about to invade (e.g.,

✅ Yes Use reasonable force to prevent entry
breaking your fence to enter)

Someone already took possession of

❌ No File a legal case for ejectment
your land

Someone is stealing from you but Call the authorities—do not use excessive
❌ No
does not threaten your life force

Someone is destroying your house ✅ Yes, but force must You can defend, but excessive force (e.g.,
and trapping you inside be reasonable killing) may lead to criminal liability

Art. 430. Every owner may enclose or fence his land or tenements by means of walls, ditches,
live or dead hedges, or by any other means without detriment to servitudes constituted
thereon. (388)

1. Summary of Article 430

Article 430 states that a property owner has the right to enclose or fence their land using
various means such as:
✅ Walls
✅ Ditches
✅ Live or dead hedges
✅ Other forms of enclosure

Purpose of Enclosing Property

 Enclosing property warns others that they are not allowed to enter without permission.
 Unauthorized intrusion can be considered unlawful aggression, allowing the owner to invoke
self-help (Article 429).

⚠️However, this right has limits:

1. The right must be exercised in good faith.

o A fence cannot be built for the sole purpose of evicting an occupant whose lease has
expired.
 o If the owner tries to evict someone by fencing them out instead of going to court, they
can be liable for damages.
2. It must not violate existing easements or servitudes.
o If there is a legal servitude (e.g., easement of drainage), the owner cannot build a fence
that blocks it.
o Easements are legal rights that allow certain uses of another’s property, like access to
water or pathways.

2. Easements and Servitudes as a Limitation

A servitude (or easement) is a real right over another person’s property that either:

 Forces the owner to allow something to happen on their land (positive easement).
 Prevents the owner from doing something that interferes with the easement (negative
easement).

📌 Example: Easement of Drainage (Article 637)

 If water naturally flows from a higher property to a lower property, the lower estate must
allow the water to pass through.
 The lower property owner cannot build a fence or wall that blocks the water’s natural path.
 Similarly, the higher property owner cannot create artificial structures that increase the burden
on the lower property.

📌 Legal Consequences:

 If a fence violates an existing servitude, the owner can be forced to remove or modify the
structure.
 The affected party can sue for damages if their rights are infringed.

3. Case Study: Villafuerte v. Court of Appeals (2005)

📌 Facts:

 Spouses Villafuerte operated a gasoline station on three lots.

 Two lots were owned by De Mesa and Daleon, who leased the land to Petrophil Corporation.
 When Petrophil’s lease expired, Villafuerte signed a new lease only for De Mesa’s lot.
 Daleon refused to lease his lot to Villafuerte and demanded that they vacate.
 When Villafuerte’s lease on De Mesa’s lot also expired, both De Mesa and Daleon fenced off
the gasoline station, shutting it down.
 The fencing was done without notice, preventing Villafuerte from operating the business.

📌 Issue:
  Did De Mesa and Daleon violate the law by fencing their property and cutting off the gasoline
station’s operations?

📌 Supreme Court Ruling:

✅ Yes, they violated the law.

 Article 536 of the Civil Code states that a person who claims possession of a property must
follow legal processes.
 De Mesa and Daleon should have filed an ejectment case instead of taking the law into their
own hands.
 Fencing off the gasoline station was illegal because it was a way to force eviction without court
approval.
 As a result, Villafuerte was awarded damages for the unlawful closure of the business.

📌 Lesson from the Case:

 Property owners cannot take the law into their own hands.
 Fencing must be done in good faith and cannot be used as an indirect way to evict tenants.
 If a dispute over possession exists, the proper legal remedy is to file a court case—not to
physically remove the occupant.

4. Key Takeaways from Article 430

Rule Explanation Example

✅ You can fence your Owners have the right to enclose A homeowner builds a fence to mark
property their land. their property boundary.

If a tenant refuses to leave after a

❌ But you cannot fence to A landlord blocks the only exit to force
lease expires, you must file an
evict someone tenants to leave—this is illegal.
ejectment case.

A landowner builds a wall blocking a

❌ You cannot block If a servitude exists, fencing cannot
neighbor’s drainage system—this
easements or servitudes block it.
violates Article 637.

⚖️Disputes over fencing If an enclosure leads to a dispute, A property owner locks out a co-owner
must go through legal the proper recourse is the courts, instead of filing a partition case—this is
action not self-help. illegal.

Articles 431 and 432: The Right to Use Property and Limitations
Article 431: Limitation on the Use of Property

 Full Text:
"The owner of a thing cannot make use thereof in such manner as to injure the rights of a
third person."
 Comprehensive Explanation:
This article places a fundamental limitation on the right to use property. It states that the
owner cannot exercise their right of ownership in a way that harms the rights of
others. The key here is the recognition that property rights are not absolute but are
qualified by the rights of others. This principle is foundational in modern legal systems
and ensures that private interests do not harm the collective well-being or violate others'
rights.
o Examples of Application:
 Noise pollution: A property owner who starts operating loud machinery or
playing loud music in the middle of the night may be infringing on the rights of
nearby neighbors. Even if the property owner has the right to use their property
in any way they wish, this use should not interfere with the neighbor’s peace
and enjoyment of their property. A court could compel the owner to stop or
reduce the noise.
 Obstruction of views: A property owner who builds a structure in such a way
that it blocks the natural light or obstructs the view of a neighboring property
can be seen as violating the neighbor's rights to enjoyment of their property.

Article 432: Emergency Use of Property

 Full Text:
"The owner of a thing has no right to prohibit the interference of another with the same,
if the interference is necessary to avert an imminent danger and the threatened damage,
compared to the damage arising to the owner from the interference, is much greater. The
owner may demand from the person benefited indemnity for the damage to him."
 Comprehensive Explanation:
Article 432 allows for emergency interference in certain situations where public
welfare or preventing greater harm takes precedence. It introduces the concept of
imminent danger, allowing interference with private property rights when it is necessary
to prevent a much larger disaster. However, even in such cases, the property owner is
entitled to seek compensation for the damage caused to their property.
o Example of Application:
 Fire scenario: A fire threatens to spread to multiple buildings. The fire
department may need to break down walls or gates of nearby private properties
to create fire breaks. In this case, although the fire department interferes with
the owner’s property, the emergency situation justifies the action, as the
damage caused by the fire would be far more destructive. Even though the
interference is justified, the owner can claim compensation for the damage to
the property caused by the fire department's actions.
 Flooding scenario: A private property owner’s land is near a river that is about
to overflow. The government may intervene by digging a canal through the
 property to divert water. The intervention is legally justifiable because the
public welfare (preventing flood damage) outweighs the property owner's right
to exclude others. Still, compensation must be provided for the land taken or
damaged.

2. Section 37: Legal Limitations on Ownership

 Explanation of Limitations:
Section 37 expands the idea that property rights are not absolute by outlining several
limitations that can be imposed on property ownership. It emphasizes that owners cannot
use their property in ways that harm others or the public. These limitations are
enforced through laws such as zoning ordinances, public health regulations, and
environmental laws.
o Example:
 Zoning Laws: A residential property owner cannot turn their home into a
commercial business unless zoning laws permit it. Zoning laws are a classic
example of state regulation of property use. A property owner’s right to use
their property is restricted by these laws, ensuring that certain areas remain
residential and are not converted into commercial or industrial zones that might
interfere with the peaceful living environment of others.
 Environmental Restrictions: A property owner is prohibited from engaging in
activities that could harm the environment, such as disposing of hazardous
waste on their land. While the owner retains title over their property, state
regulations prevent the abuse of property in ways that could harm public health
or the environment.

3. The Powers of the State: Police Power, Eminent Domain, and Taxation

(1) Police Power

 Explanation:
Police power is the government’s right to regulate property and restrict the use of
property for the public good. The power is exercised for purposes like promoting
health, safety, morals, and the general welfare of the population.
o Key Principle:
The exercise of police power means that individual property rights may be
limited if such limits are deemed necessary for the broader community's well-
being. This is part of the social contract, where individuals give up certain
freedoms in exchange for protection from greater harm.
o Examples of Police Power in Action:
 Building codes and safety regulations: The government enforces rules to ensure
that buildings meet safety standards (e.g., earthquake-resistant structures, fire
 exits). These rules limit the ways property owners can use or alter their property
but are necessary to protect public safety.
 Environmental protection laws: Laws that restrict landowners from polluting air
or water resources, ensuring that their activities do not harm the public.

(2) Eminent Domain

 Explanation:
Eminent domain allows the government to seize private property for public use,
provided there is just compensation to the owner. This power is typically exercised
when property is needed for infrastructure projects or other government purposes.
o Key Principle:
Even though the government has the power to acquire property, this action is not
arbitrary. It must be done in the interest of the public (e.g., building roads,
schools, or public housing) and must include fair compensation for the loss.
o Example of Eminent Domain:
 A landowner’s home is located where a new public highway is to be built. The
government exercises eminent domain to purchase the home at market value,
ensuring that the landowner is compensated. If the landowner disagrees with
the price, they can go to court to seek a fairer value.

(3) Taxation Power

 Explanation:
The government’s right to tax property is a fundamental aspect of its authority. Taxes
are levied on real estate to fund public services like education, transportation, public
safety, and social programs.
o Key Principle:
While taxation impacts property rights by taking part of the owner's wealth, it is
justified as it benefits society as a whole. Property taxes are mandatory
contributions to the community’s upkeep and development.
o Example of Taxation:
 A property owner must pay annual property taxes to the government. If they
fail to do so, the government may place a lien on the property or even foreclose
it to recover the unpaid taxes.

4. Inherent Limitations on Property Rights in Relation to Others’ Rights

 The Doctrine of Abuse of Rights:

The exercise of ownership rights is subject to the principle that rights cannot be
exercised in bad faith or in a way that harms others. Even if a property owner
technically has the legal right to do something, they must not misuse their rights to harm
others.
o Example of Abuse of Rights:
  Villafuerte v. Court of Appeals: In this case, the court ruled that a property
owner was liable for the harm caused by building a fence in bad faith to evict
tenants. Although the property owner had the right to build a fence, their
purpose was to punish tenants who had no legal obligation to vacate
immediately. This case illustrates how the intent and effect of using property
can determine whether it is an abuse of rights.

o Example of Social Responsibility in Property Use:

 Sps. Santos v. Court of Appeals: A property owner built a fence obstructing a
neighbor's right of way. While the property owner had the legal right to build
the fence, the court ruled that doing so with the intent to harm the neighbor
was an abuse of rights.

Article 433 - Presumption of Ownership Based on Possession:

This provision raises a presumption of ownership based on actual possession under a claim of
ownership. The key points are:

 Presumption of Ownership: If a person possesses a property and claims ownership, the law
presumes that they are the rightful owner until proven otherwise. This means that merely being
in possession of a property can be considered proof of ownership, unless the true owner can
provide evidence to dispute it.

Example:

If Person A has been living in a house for years and claims ownership, the law would presume
that Person A is the rightful owner of the property. However, this presumption can be challenged
by Person B, who might provide proof of a deed or other documentation showing they are the
rightful owner.

 Disputable Presumption: This presumption is not absolute. It is disputable, meaning it can be

contested with sufficient evidence.

Example:

If Person B, who is claiming ownership, can present a valid certificate of title, then the
presumption of ownership held by Person A may be overruled.

Article 434 - Burden of Proof in an Action to Recover Property:

In an accion reivindicatoria (action to recover ownership), the person claiming ownership must
prove:
 1. Identity of the Property: The specific land or property being claimed must be identified by clear
description (location, area, and boundaries).
2. Title of Ownership: The claimant must prove they have a better right or title to the property.

This means that in a legal dispute over property, the plaintiff's case hinges on proving they are
the rightful owner, not just showing that the defendant’s claim is weak.

Example:

 Claiming Ownership Based on the Title:

Person A sues Person B, claiming ownership of a property. Person A must provide
evidence that they own the property (for example, a deed or certificate of title).
 Claim Based on Weakness of Defendant’s Claim:
Person A cannot win simply by showing that Person B doesn’t have ownership
documents (like a certificate of title or other proof). Person A must prove their own
ownership, even if Person B has no title at all.

Article 435 - Protection Against Deprivation of Property:

This article emphasizes that a person cannot be deprived of their property without due process
and just compensation. If this requirement is not fulfilled, courts will protect the possessor’s
rights.

Example:

If the government condemns land for public use (like building a highway) but does not
compensate the owner, the owner can file a legal claim to recover the land or to demand
compensation. If the government fails to pay just compensation, the court will intervene.

Article 436 - Compensation and Justification in Condemnation:

When the government or competent authority seizes property for public use (like a road
expansion), the owner is generally not entitled to compensation unless they can prove that the
seizure was unjustified.

Example:

If a city government seizes land to build a new school, the owner will not get compensation
unless they can show that the government’s seizure was improper, like if the land wasn’t actually
needed for public use.
The Accion Reivindicatoria (Action for Recovery of Property):

An accion reivindicatoria is a legal action to recover ownership of a property. This action

requires the plaintiff to prove the following:

1. Proof of Identity of the Property:

The plaintiff must demonstrate the exact property they are claiming. This means providing a
description of the land, its location, boundaries, and area. Boundaries can either be natural (e.g.,
rivers, mountains) or artificial (e.g., monuments, fences).

Example:

Person A sues to reclaim a plot of land. They provide a detailed description of the property,
including boundaries that are clearly marked by rivers and fences. This helps the court identify
the land in question.

2. Proof of Title to the Property:

The plaintiff must prove they have legal title to the land. For example, they might show an
original certificate of title, a deed of sale, or a donation deed.

Example:

Person A submits a certified copy of the certificate of title as proof of ownership, which the
court accepts as valid, showing that Person A is the rightful owner.

The Role of Possession:

Possession plays an important role in property disputes. The law favors the presumption of
ownership when someone is in actual possession of a property under a claim of ownership.

Example:

Person A has lived in a house for several years and claims it is their property. While they may
not have formal documents proving ownership, the court may initially presume Person A is the
owner due to long-term possession. However, Person B, who has valid documentation (e.g., a
deed), can still challenge this presumption.

Importance of Boundaries and Area:

When proving ownership of a piece of land, boundaries take precedence over the area.
Example:

If Person A’s deed describes the property as being 1,000 square meters but the boundary markers
only cover 800 square meters, the court will prioritize the boundary description. Even if there’s a
discrepancy in the area mentioned in the deed, the actual boundaries of the property will define
the limits of ownership.

Role of Certificates of Title vs. Tax Declarations:

 Certificate of Title: A certificate of title is considered conclusive proof of ownership. A valid

certificate of title means the holder has full legal ownership.
 Tax Declarations: Tax declarations can serve as prima facie evidence of ownership but are not
conclusive. They show that the person has paid taxes on the property, which might indicate
possession or ownership, but they don’t prove title.

Example:

 Person A presents a certificate of title for a piece of land in a legal dispute, which is considered
definitive proof of ownership.
 Person B presents a tax declaration showing they’ve paid taxes on the land for years. While this
suggests possession, Person A’s certificate of title outweighs this evidence in court.

Owner’s Rights to the Surface and Subsurface (Article 437):

o Doctrine of Ownership: The owner of the land has rights not just to the surface
but also to the subsurface. This means if you own land, you have legal claim to
what is both above the ground (like buildings or crops) and below the ground
(such as minerals, water, or even oil).
o Exceptions to Ownership Rights:
 These rights are subject to special laws (e.g., environmental laws, zoning
regulations, etc.) that might limit your ability to fully exploit the land as you see
fit.
 The rights also don’t interfere with servitudes. A servitude could be an
easement, like allowing someone to cross your land (a right of way).
 Aerial navigation is another limitation. Even if you own land, you cannot block
air traffic or build structures that interfere with flights in places with established
flight paths.

Example: You own a plot of land, and while you can build a home, you are not allowed
to construct a building that would pose a hazard to air traffic. Additionally, if the land is
in an environmentally protected zone, you may be restricted from certain types of
excavation or construction.
2. Hidden Treasure (Article 438):
o The concept of hidden treasure applies to any valuable objects (like gold, silver,
jewels, or other valuables) that are found buried or concealed on a property.
o Ownership of the Treasure: If you are the landowner, you automatically have
the right to any hidden treasure found on your property.
o Finders: If a non-owner (someone who doesn't own the land) finds the treasure
by accident, they are entitled to half of its value. However, if the finder is
trespassing, they do not get any part of the treasure.
o The law goes further: If the treasure is of scientific or artistic value, the state can
claim the treasure, compensating the landowner at a fair price.

Example: You dig in your garden and discover a chest filled with antique coins. If you're
the owner of the property, the treasure belongs to you. However, if someone trespasses
on your land and finds it, they are entitled to only half of its value, unless they are on
your land without permission, in which case they get nothing.

3. Rights to the Subsurface (Subsoil Rights):

o Ownership of land includes the right to use and control everything beneath it
(like digging wells or extracting minerals). However, this right isn’t unlimited in
some situations due to state control over certain resources.
o Regalian Doctrine: Under this doctrine, certain resources, such as minerals and
petroleum, are considered to belong to the state. This means that even if you own
the land, you might not have the right to extract minerals or other valuable
resources unless authorized by the government.
o Restrictions on Subsurface Rights: The right to extract resources may be limited
by laws, the necessity of permits, or the existence of other competing claims (such
as the rights of indigenous people or environmental protections).

Example: Suppose you own land that has significant mineral deposits. While you
technically own the land, the government may have the right to regulate or even control
the extraction of those resources based on national laws regarding resource management.

4. Case Law Examples:

o Republic v. Court of Appeals (Important clarification on surface and subsurface
rights): The Supreme Court ruled that subsurface rights and surface rights are
inseparable. You cannot own the surface of the land without also owning the
rights to the subsurface unless explicitly specified otherwise by law.
 In this case, mineral rights cannot coexist with agricultural or other types of
land-use rights on the same land. If a piece of land is considered to have mineral
value, it cannot be legally used for agriculture in some cases. This legal
precedent emphasizes the indivisibility of surface and subsurface rights.

Example: If you purchase land for farming, and it turns out the land is rich in
minerals, the mining rights would trump agricultural use. You wouldn't be able to
farm on it as intended without special permission.
 o National Power Corporation v. Ibrahim (Subsurface rights and compensation):
This case shows that subsurface rights also entitle the landowner to
compensation if the subsurface is used by someone else (e.g., a government
agency or corporation). Here, NAPOCOR (National Power Corporation) had to
compensate Ibrahim for the use of land under his property, where tunnels were
constructed for power projects.

Example: A utility company builds a tunnel under your land to lay down pipes.
You, as the landowner, are entitled to compensation because the subsurface is
yours. Even though you may not physically see the tunnel, it is your right to be
paid for the use of your land beneath the surface.

5. Additional Considerations Regarding Hidden Treasure:

o The definition of hidden treasure is more comprehensive: It refers to valuables such as
money, precious stones, or gold that have been intentionally buried or accidentally lost
and are not easily discovered. These items must be concealed in a manner that their
ownership is unclear or unknown.

Example: A buried chest of coins is considered hidden treasure, but a stash of coins that
you knowingly left on your property doesn't count unless it was lost and intentionally
hidden by someone else.

Republic Act No. 9072 (National Caves and Cave Resources Management and Protection Act) aims to
conserve and protect caves and their resources in the Philippines. The DENR is the lead agency
responsible for managing caves, issuing permits for resource collection, and preventing harm to cave
ecosystems. Prohibited acts include damaging cave features and illegal resource trade, with penalties of
fines and imprisonment. The Act also allows confiscation of illegally gathered resources and requires
cooperation with other organizations for cave conservation. It takes effect 15 days after publication.

1. Ownership of Hidden Treasure (Article 438)

Rule: The owner of the land or property where a hidden treasure is found typically owns the
treasure. However, if the finder is not the landowner and finds the treasure accidentally (without
trespassing), they are entitled to half of it.

Example:

 Landowner Finds Treasure: Imagine a landowner is digging in their garden and

discovers a chest full of gold coins. Since the treasure was found on their property, they
have full ownership of it.
 Third Party Finds Treasure (Accidental Discovery): Suppose a person who isn’t the
landowner is walking across someone else’s property and stumbles upon a buried
treasure. Since they didn’t intend to search for treasure and merely found it by chance,
they are entitled to half of it, while the landowner would receive the other half.
  Trespassing Finder: If the same person who is not the landowner had been trespassing
(intentionally entering the land without permission), they would not be entitled to any
portion of the treasure. For example, if someone was knowingly searching for treasure on
the land, they would forfeit any claim to it.
 State Claim for Cultural or Scientific Value: If the treasure is deemed to have
historical or scientific value, the state may claim it and compensate the finder or the
landowner. For instance, if a rare artifact is discovered that could shed light on ancient
Filipino culture, the government may pay the finder or landowner a fair price and acquire
the item for preservation in a museum.

2. Treasure Hunting

Rule: The law governing treasure hunting is different from accidental treasure discoveries.
Treasure hunting is a deliberate search for treasure, and it requires a permit. The finder or
treasure hunter cannot claim full ownership of anything found unless they have gone through the
proper legal channels.

Example:

 Cultural or Historical Value: Suppose an archaeologist applies for a permit under the
National Museum Act (Republic Act No. 8492) to search for Spanish-era artifacts on a
private property. If they discover an old shipwreck and uncover valuable relics like
ancient pottery, they must turn over those items to the National Museum since they are of
cultural and historical significance.
 Non-Historical Treasure: If the same archaeologist finds gold coins or jewels on the
same property, which aren’t considered historically valuable, they would need a permit
from the Department of Environment and Natural Resources (DENR). They must follow
rules outlined by DENR, which might require the treasure to be shared with the
government. For example, the government might take 75% of the proceeds from selling
the treasure, while the archaeologist gets the remaining 25%.
 Shipwreck Recovery: If treasure hunters recover sunken treasure from a shipwreck, the
revenue from this discovery is divided between the government and the permit holder.
For instance, if a private company is granted a license to recover treasure from a sunken
ship, and they find gold bars, the treasure is split 50-50 between the government and the
recovery team.

3. Right to the Airspace

Rule: While landowners do not own the airspace indefinitely, they do have the right to control
the "immediate reaches" above their land. This means they can build structures, plant trees, or
run fences, and no one else can claim exclusive ownership of the space above their land.
Example:

 Building and Planting: If a landowner builds a house and installs a fence, they are using
the airspace above their property to support their structures. The airspace for the height of
their house, fence, and trees is considered part of their land, and no one can interfere with
it unless authorized by the government.
 Low-Flying Aircraft: If an airplane repeatedly flies just a few meters above a person’s
property (for example, a crop-dusting plane flying very low over farmland), this could be
considered a "taking" of the landowner’s airspace. In such cases, the landowner might be
entitled to compensation for the intrusion, as seen in the United States v. Causby case.
Here, a private landowner sued when military planes flew at low altitudes over their
property, disturbing their peace and damaging the value of their land. The court ruled that
the landowner was entitled to compensation because the government’s actions effectively
took away the use of their property.
 Unauthorized Drones: If someone operates a drone over private land without
permission, it may be considered trespassing. For example, a neighbor flying a drone
over your backyard could be seen as an invasion of your airspace. In this case, you could
take legal action against them for trespassing.

RIGHT OF ACCESSION
GENERAL PROVISIONS
Art. 440. The ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or
artificially. (353)
Right of Accession (Art. 440, Civil Code)

The right of accession is a legal principle stating that the owner of a property has the right to
everything produced by, attached to, or incorporated into that property. This applies whether
the addition occurs naturally or artificially.

For example:

 If you own a tree, you own the fruits it produces.

 If someone builds a house on your land, the house belongs to you unless a legal agreement
states otherwise.

Definition and Concept (Art. 440)

 Accession is NOT a mode of acquiring ownership. Instead, it is a legal consequence of

ownership.
 Ownership of the principal object extends to anything produced by or attached to it.
 Accession presupposes prior ownership. The owner of the main property automatically gains
ownership of anything added to it.
Accession vs. Modes of Acquiring Ownership

The seven modes of acquiring ownership under Article 712 are:

1. Occupation – Acquiring unowned property (e.g., hunting wild animals).

2. Intellectual creation – Ownership of inventions or creative works.
3. Law – Ownership granted by legal provisions.
4. Donation – Ownership transferred as a gift.
5. Succession – Inheritance after death.
6. Tradition – Transfer by contract.
7. Prescription – Ownership gained by continued possession.

Accession is NOT listed because it is not a way to acquire ownership—it is an attribute of

ownership.

Types of Accession

Accession is divided into:

1. Accession Discreta – The right to fruits or products generated by the property.

2. Accession Continua – The right to things attached or incorporated into the property.

1. Accession Discreta (Right to Fruits)

The owner has the right to:

 Natural fruits – Products of nature without human intervention.

Example: Fruits from a tree, offspring of animals.
 Industrial fruits – Products obtained through labor and cultivation.
Example: Rice harvested from farmland.
 Civil fruits – Income generated by property use.
Example: Rent from leased property, interest from loans.

2. Accession Continua (Right to Attachments)

A. Accession in Immovable Property (Real Estate)

Classified into industrial accession and natural accession.

1. Industrial Accession (Man-Made Attachments)

Occurs when something is artificially attached to real property.

  Edification (Building) – Constructing a structure on land.
 Planting – Cultivating crops, trees, or plants.
 Sowing – Planting seeds that grow into crops.

Example: If someone builds a house on another person’s land, ownership depends on legal
agreements.

2. Natural Accession (Natural Attachments)

Occurs without human intervention. It includes:

 Alluvion – The gradual accumulation of soil along riverbanks due to water movement.
Example: A river deposits silt, extending a landowner’s property.
 Avulsion – The sudden separation of land due to natural forces (e.g., floods).
Example: A storm detaches a piece of land and deposits it elsewhere.
 Change of River Course – When a river permanently changes its path.
Example: If a river moves, the exposed land may belong to the adjacent landowner.
 Formation of Islands – When new land emerges in a body of water.
Example: If an island forms in a lake, ownership is determined by law.

B. Accession in Movable Property (Personal Property)

When two movable objects are combined, ownership depends on their relationship.

1. Adjunction (or Conjunction)

Two objects become joined, and ownership depends on whether they can be separated.

 Inclusion (Engraftment) – One object is inserted into another.

Example: A diamond embedded into a gold ring.
 Soldadura (Attachment) – Two objects are fused together.
Example: Welding two metal parts.
 Tejido (Weaving) – Threads are woven together.
Example: Silk and cotton woven into fabric.
 Pintura (Painting) – A surface is painted.
Example: Painting a design on a car.
 Escritura (Writing) – Writing or engraving on an object.
Example: Carving a name onto a gold bracelet.

2. Commixtion or Confusion

Occurs when two substances mix, making them indistinguishable.

 Example: Mixing two types of flour in a bakery.

3. Specification

Occurs when raw material is transformed into something new.

 Example: Sculpting a marble block into a statue.

Right of Accession with Respect to What is Produced by Property

Article 441: Ownership of Fruits

According to this provision, the owner of a property is entitled to three types of fruits:

1. Natural fruits
2. Industrial fruits
3. Civil fruits

Each of these categories represents a different type of benefit that a property can produce, and
ownership naturally belongs to the property owner unless there are specific legal exceptions.

Article 442: Definitions of Fruits

1. Natural Fruits

These are spontaneous products of the soil and the offspring or products of animals. They grow
or are produced without human intervention.

 Examples:
o Wild berries in a forest
o Grass that grows naturally in a field
o The wool from sheep or eggs from chickens

2. Industrial Fruits

These are produced through human labor or cultivation. Unlike natural fruits, industrial fruits
require effort to grow and harvest.

 Examples:
o Rice harvested from a farm
o Coffee beans from a cultivated plantation
o Sugarcane from a sugar farm

3. Civil Fruits

These refer to monetary income or revenue derived from property.

  Examples:
o Rent paid by tenants for using a building
o Lease payments for agricultural land
o Interest payments from an annuity contract

Article 443: Obligation to Pay Expenses for Fruits

If a person receives the fruits of a property, they must pay back any expenses incurred by
another person for the production, gathering, and preservation of those fruits.

 Example:
o A tenant cultivates a field and grows crops. Later, the landlord reclaims the land and
collects the crops. The landlord must reimburse the tenant for their farming expenses.

Article 444: When Fruits are Considered to Exist

Natural or industrial fruits are considered to exist when they are either:

 Manifest (visible or apparent), or

 Born (for animals, as long as the offspring is inside the womb and pregnancy is evident).
 Example:
o If a cow is pregnant, its unborn calf is already considered a fruit of the property.

Accession Discreta (Right to Fruits of Property)

Basic Rule (Article 441)

Accession discreta is the right of the owner to collect the fruits of their property. This right is
stated in Article 441, meaning whoever owns the property owns the fruits it produces.

Exceptions to the Rule

In some cases, the owner does not have the right to the fruits of their property:

1. Usufruct (Article 566)

A usufructuary (a person who has the right to use and benefit from a property) is entitled to the
fruits of the property, even though they are not the owner.
  Example:
o A father grants his son a usufruct over farmland. The son can harvest and sell the crops,
even though the father remains the owner.

2. Lease of Rural Lands

In a lease agreement, the lessee (tenant) has the right to harvest and keep the natural and
industrial fruits of the land, while the landlord is entitled to rent payments (civil fruits).

 Example:
o A farmer leases a rice field. The farmer gets to keep the rice harvest, while the landlord
only gets the rent payment.

3. Antichresis

In antichresis, the debtor gives possession of their property to a creditor, who collects the fruits
to pay off the debt.

 Example:
o A person borrows money and gives their fruit orchard as collateral. The creditor collects
and sells the fruits until the loan is repaid.

4. Possession in Good Faith (Article 544)

A possessor in good faith can keep the fruits they collected before being legally required to
return the property.

 Example:
o A person buys land believing they are the rightful owner and harvests mangoes. Later, it
turns out the land belongs to someone else. They do not have to return the mangoes
they collected before learning the truth.

5. Fruits Naturally Falling (Article 681)

Fruits that naturally fall onto another person’s land belong to the owner of that land.

 Example:
o A mango tree overhangs a neighbor’s property. If a mango falls onto the neighbor’s
land, it belongs to the neighbor, not the tree’s owner.

Kinds of Fruits (Article 442 Detailed Explanation)

1. Natural Fruits (Two Kinds)

(a) Spontaneous Products of the Soil

  Examples: Wild berries, natural herbs, naturally growing bamboo
 Exception: If human labor is involved in growing them, they become industrial fruits.

(b) Young or Other Products of Animals

 Examples: A cow’s milk, sheep’s wool, chicken eggs

 Ownership Rule: The offspring belongs to the mother’s owner (US v. Caballero case).

2. Industrial Fruits

Industrial fruits require human labor and cultivation.

 Examples: Rice, sugarcane, coffee, mangoes

 Exception: Manufactured goods (clothing, electronics) are not industrial fruits.

3. Civil Fruits

These are monetary benefits from property.

 Examples: Rent from buildings, lease payments for land, corporate dividends

Existence of Fruits (Article 444: When Fruits Are Recognized)

 Natural & Industrial Fruits

o Considered to exist when they are manifest (visible) or born (for animals, when
pregnancy is apparent).
 Example:
o Corn seedlings appearing in a field = manifest
o Pregnant cow = unborn calf already considered a fruit

Production Expenses (Article 443: Who Pays for the Fruits?)

Who Pays for Expenses?

 If a person collects the fruits but did not pay for production, they must reimburse the costs.

Example Scenario:

1. Possessor in Bad Faith:

o A squatter illegally occupies farmland and grows crops. Later, the true owner reclaims
the land and takes the crops. The squatter is not reimbursed.

2. Possessor in Good Faith:

 o A farmer believes he owns land and grows crops. If it turns out the land belongs to
someone else, the farmer is allowed to keep the crops before being notified of the
mistake.

Pending (Ungathered) Fruits (Article 449)

 If fruits are not yet harvested, they belong to the landowner, and the planter in bad faith loses
everything.

When Are Production Expenses Refundable?

For expenses to be refunded, they must:

1. Be necessary for annual production (not for improvements).

2. Be reasonable, not excessive.
3. Be related to the actual production of fruits.

 Example:
o If a person spends money on fertilizers for a rice farm, they can get reimbursed.
o If they spend money on decorating the farm, they cannot get reimbursed.

Right of Accession with Respect to Immovable Property

Article 445: Ownership of What is Built, Planted, or Sown

 Basic Principle: Anything built, planted, or sown on land belongs to the owner of the
land.
 Includes:
1. Buildings (houses, structures)
2. Plantings (trees, crops, flowers)
3. Sown seeds (grains, vegetables)
4. Improvements (pavements, fences)
5. Repairs (reconstruction, renovations)

 Example:

o Case 1: Owner builds on his own land → No issue, the structure belongs to him.
o Case 2: A person builds on someone else's land → The structure belongs to the
landowner, subject to certain legal rules.

Article 446: Presumption of Ownership

 Default Rule: If a building, planting, or sowing is found on a land, it is presumed to

have been made by the landowner and at his expense.
  Exception: If there is proof that someone else did it (like a tenant or an unauthorized
builder).
 Example:
o If a mango tree is growing on a piece of land, it is presumed to be owned by the
landowner unless someone else proves that they planted it.

Accesion Continua (Right of Accession Over Attached

Property)
Definition of Accesion Continua

 It is the right of the owner of a property to claim anything incorporated into it, either
by:
1. Natural causes (e.g., land formations, sediment deposits).
2. Artificial causes (e.g., buildings, improvements made by a third party).

 Two Types of Accesion Continua:

1. Industrial Accession – Attachment caused by humans (e.g., construction of a building).
2. Natural Accession – Attachment caused by nature (e.g., formation of new land due to
sediment deposit).

[43.1] Absence of Agreement and Accesion Continua

 The law on accesion continua applies only if there is no agreement between owners.
 If there is an agreement, then the contract governs the situation.
 Example:
o No Agreement: If a tenant builds a house on rented land without permission, the house
belongs to the landowner.
o With Agreement: If a contract states that a tenant can build a house and keep
ownership, then the tenant retains the house.

[43.2] Basic Principles Governing Accesion Continua

(1) Attachment Must Be Inseparable Without Damage

 If separation is impossible without damage, accesion continua applies.

 If separation is possible without damage, then the owner of each part retains
ownership.
 Example:
 o A house built using another person’s bricks: If the bricks can be removed without
destroying the house, the brick owner can claim them.
o If the bricks are already cemented into the walls, the house owner retains them and
must pay the brick owner.

(2) The Accessory Follows the Principal ("Accessio Cedit Principali")

 The main property (land, house) is considered the principal.

 Anything added to it is the accessory and follows ownership of the principal.
 Example:
o A fence built around a house → The fence belongs to the house owner.
o A chandelier installed in a building → The chandelier becomes part of the building.

(3) No Unjust Enrichment

 No one should gain unfairly at another’s expense.

 If an innocent person’s property becomes part of another person’s land or structure,
they must be paid for its value.
 Example:
o A tenant plants mango trees on rented land. If the landlord claims the trees, he must
pay the tenant for the cost of planting.

(4) Good Faith Exempts from Punitive Liability

 If a person acts in good faith, they should not be penalized.

 If a landowner unknowingly uses materials owned by another, they must pay for the
materials but are not liable for damages.
 Example:
o A landowner builds a house using bricks mistakenly delivered to him. If he acted
without malice, he only has to pay for the bricks, not additional damages.

(5) Bad Faith Leads to Penalties and Liability

 If a person builds, plants, or sows on someone else’s land in bad faith, they lose their
rights to what they built.
 They may also have to pay damages to the landowner.
 Example:
o A person illegally builds a house on land they know belongs to someone else. The
landowner can demand demolition and may sue for damages.
(6) Mutual Bad Faith Neutralizes Liability

 If both parties act in bad faith, the law treats them as if they acted in good faith to
avoid unfair advantages.
 Example:
o A landowner deliberately lets someone build on their land, then later tries to claim
ownership. Since both parties acted in bad faith, the court will balance their rights
fairly.

Key Legal Provisions on Accession Continua

1. Article 447: Rights Over Materials Used in Good Faith

 If a landowner unknowingly uses materials belonging to someone else, they must pay for them.
 If the materials can be removed without damage, the original owner may reclaim them.

2. Article 449 & 451: Bad Faith in Building on Another’s Land

 A builder in bad faith loses ownership of what they built.

 They may also be liable for damages to the landowner.

3. Article 453: When Both Parties Act in Bad Faith

 If both the builder and the landowner act in bad faith, their rights are balanced as if both acted
in good faith.

A. INDUSTRIAL ACCESSION
Art. 447. The owner of the land who makes thereon, personally or through another,
plantings, constructions or works with the materials of another, shall pay their value; and,
if he acted in bad faith, he shall also be obliged to the reparation of damages. The owner of
the materials shall have the right to remove them only in case he can do so without injury
to the work constructed, or without the plantings, constructions or works being destroyed.
However, if the landowner acted in bad faith, the owner of the materials may remove them
in any event, with a right to be indemnifi ed for damages. (360a)

Industrial Accession: Detailed Explanation

1. Industrial Accession Forms: Industrial accession refers to the addition of value or
improvement to land through constructions, plantings, or sowing. There are three primary forms
of industrial accession:

 Building: Refers to the creation of a structure on land, such as a house, office, or other
edifices. However, this term does not cover smaller, non-structural items like shelves,
counters, or partitions made within a building. These are considered fixtures and not part
of the building in a strict legal sense.
 Planting: This applies to the planting of trees, whether large or small, on the land. The
term refers specifically to permanent plantings, not temporary crops or plants.
 Sowing: Sowing refers to the scattering or planting of seeds on land for the purpose of
cultivating crops or other plants. It is distinct from planting trees, which involves more
permanent fixtures.

2. Industrial Accession on One’s Own Land: Industrial accession typically refers to

improvements made on land owned by one person with materials owned by another. It is a tool
to address situations where the land and the materials belong to different parties.

 If a landowner builds on their land using their own materials, there is no controversy
because the landowner owns both the land and the materials. In this case, the ownership
of the building or improvements is clear and there’s no need for rules on industrial
accession.
 However, when land and materials belong to different owners, issues may arise regarding
who owns the improvements (the building, plantings, or crops) once construction or
planting occurs.

3. Controversial Cases in Industrial Accession: Conflicts typically arise when ownership of

the materials and the land do not align. The following scenarios are key:

 Landowner Builds with Materials Belonging to Another: This is a situation where the
landowner uses materials from someone else to build, plant, or sow on their land.
 Builder, Planter, or Sower on Another's Land: Here, someone other than the
landowner builds or plants on someone else's land, either using their own materials or
someone else's.
 Third-Party Builds on Another’s Land with Materials Belonging to a Third Party:
This scenario involves a third person building, planting, or sowing on land that is neither
their own nor their materials.

4. Article 447: Using Materials Belonging to Another

Article 447 of the New Civil Code governs the case where a landowner makes improvements
using materials owned by someone else. It defines the rights and obligations of the landowner
and the owner of the materials based on the concept of good or bad faith:
  Good Faith: If the landowner uses the materials of another person without knowledge
that the materials belong to someone else, the owner of the materials is presumed to act in
good faith. The law allows for compensation based on the value of the materials used.
 Bad Faith: If the landowner knowingly uses materials that belong to another person
without consent, the landowner may be required to pay not only for the materials but also
for damages. Moreover, the owner of the materials can demand the return of the
materials, even if doing so will damage the improvements made.

5. Key Scenarios and Legal Effects:

 Both Parties Act in Good Faith: If both the landowner and the owner of the materials
acted in good faith, the landowner becomes the owner of the work done (e.g., buildings,
plantings, etc.) but must compensate the materials' owner for the value of the materials
used.
 Both Parties Act in Bad Faith: If both the landowner and the owner of the materials
acted in bad faith, they may both be liable for damages. The bad faith acts neutralize each
other, so the legal consequences remain similar to a good faith scenario.
 Landowner in Bad Faith, Material Owner in Good Faith: If the landowner acted in
bad faith, they must compensate the owner of the materials for their value and damages.
The owner of the materials has the right to demand removal of the materials, even if it
causes damage, and may be entitled to further indemnification.
 Landowner in Good Faith, Material Owner in Bad Faith: This scenario doesn’t fall
under Article 447, which presumes the material owner’s good faith. Instead, it is
addressed by the principles of Articles 455 and 449, where the bad faith of the material
owner means they lose their right to the materials and are liable for damages.

Case Example: Pacifi c Farms, Inc. v. Esguerra

In this case, Carried Lumber provided construction materials to Insular Farms, who used these
materials to build six buildings. However, Insular Farms did not pay the full amount for the
materials. Carried Lumber filed a case for the unpaid balance and eventually levied on the
buildings.

Pacific Farms, Inc. claimed ownership of the buildings, asserting it had purchased them from
Insular Farms. The issue was whether Carried Lumber had a right to reclaim the materials based
on non-payment.

The court applied the principles of industrial accession by analogy, specifically Article 447,
which states that the landowner must compensate the materials’ owner for the value of the
materials used. Despite not being directly involved in the construction, Pacific Farms had to
compensate Carried Lumber because the buildings (the principal) were constructed using
Carried Lumber’s materials (the accessory).
1. Good Faith vs. Bad Faith

 Good Faith means that the person is acting with honesty and believes that they have the legal
right to do something. In the context of building, planting, or sowing on land that isn’t theirs,
good faith refers to the belief that the land is theirs, even though it isn’t.
 Bad Faith means that the person knows they are not acting according to the law. If a person
builds, plants, or sows on land that isn’t theirs and knows it, they are considered to be acting in
bad faith.

2. The Civil Code Provisions

Here are the essential Civil Code provisions concerning building, planting, or sowing on
someone else's land:

 Article 448 (Civil Code): This provision deals with cases where someone acts in good
faith and builds, plants, or sows on land they believe is theirs.
o Key Principle: If you build, plant, or sow on land believing it’s yours (and you’re not
aware that it’s not), the law gives you a chance to be reimbursed for the improvements
you made.

Example: If a person mistakenly builds a house on land they think they own, they may
be entitled to be compensated for the house even if the land turns out to belong to
someone else.

 Article 449 and Article 450: These sections address cases where the person knowingly
builds, plants, or sows on another’s land (bad faith).
o Key Principle: If someone acts in bad faith, they lose all rights to the improvements
they’ve made. They cannot ask for reimbursement or compensation and may even be
required to pay rent for the time they used the land.

Example: If someone knowingly builds a house on land that doesn’t belong to them, they
cannot ask for reimbursement from the actual landowner and may even face removal of
the improvements.

Detailed Explanation with Case Examples

1. Good Faith Builders (Article 448)

 Principle: A person who builds, plants, or sows on land that they believe is theirs, and
acts in good faith, may demand reimbursement from the actual landowner for the value of
the improvements.
 Example Case:
 Pleasantville Development Corporation v. CA (1996):

o Facts: In this case, a man named Kee built a house on what he thought was his lot (lot
8). However, it turned out that he had mistakenly built on lot 9, which was not his.
o Court’s Ruling: Kee was deemed to be a builder in good faith because he believed the
land was his. The court decided that he could claim reimbursement for the value of the
improvements made to the land (the house he built).
o Key Takeaway: Even if a person unknowingly makes an improvement on another's land,
if they acted in good faith, they have the right to compensation for their improvements.

2. Bad Faith Builders (Articles 449 and 450)

 Principle: If someone builds, plants, or sows on another’s land, knowing that the land
does not belong to them (bad faith), they lose their right to be reimbursed for the
improvements they made. Furthermore, the landowner has the right to demand the
removal of the improvements or to charge rent for the land.
 Example Case:

Baltazar v. Caridad (1966):

o Facts: The Caridad family built houses on land that was not theirs. They had knowledge
that the land was already registered in someone else’s name, but they continued to
occupy it and build on it.
o Court’s Ruling: The court ruled that since the Caridad family acted in bad faith, they had
no right to compensation for the improvements they made. The actual landowner could
demand the removal of the improvements or charge rent.
o Key Takeaway: If a person knowingly builds or sows on land they don’t own (bad faith),
they cannot claim compensation for their improvements.

3. Landowner’s Rights (Article 450)

 Principle: If a landowner finds that someone has built, planted, or sown on their land in
bad faith, they have the right to demand that the builder remove the improvements or pay
rent for the time they occupied the land.
 Example Case:

Pershing Tan Queto v. CA (1987):

o Facts: In this case, the builder was aware that the land did not belong to them but built
improvements anyway. The landowner decided not to immediately object and allowed
the improvements to continue.
o Court’s Ruling: The landowner could still claim that the builder’s improvements be
removed, but the builder also had the option to request reimbursement as if they were
a builder in good faith.
 o Key Takeaway: Even if the builder is in bad faith, the landowner must be careful when
allowing improvements, as they may lose the right to remove them or may have to pay
for them under certain conditions.

4. Lessee's Rights and Improvements

 Principle: A lessee (tenant) who builds or improves property they are renting can ask for
reimbursement for useful improvements, but this only applies if they acted in good faith.
 Example Case:

Geminiano v. Court of Appeals (1996):

o Facts: A person rented a bungalow and made certain improvements. The lease
agreement came to an end, and the lessee asked to be reimbursed for the
improvements they had made to the property.
o Court’s Ruling: The court ruled that the lessee could be reimbursed for useful
improvements made to the property, but only if they acted in good faith. If they had
known that the property would be taken back or that the improvements weren’t agreed
upon in the lease, they would not have been reimbursed.
o Key Takeaway: Lessees who improve rented property may be entitled to
reimbursement, but only for useful improvements and only if they acted in good faith.

Cases Involving Co-Ownership and Article 448:

1. Spouses Del Campo v. Abesia (1988): The Court ruled that Article 448 does not apply
to a co-owner who builds on common property because the co-owner is not a third-party
builder. However, if a partition of the property is made and it is found that a co-owner
built in good faith on land belonging to another co-owner, Article 448 may apply, and the
builder may be entitled to indemnity for improvements made.
2. Ignao v. IAC (1991): This case involved a dispute between co-owners, Florencio Ignao
and his relatives, over the occupation of land. After a partition, it was discovered that the
houses of two relatives had encroached upon Florencio’s portion of the land. The
Supreme Court applied Article 448 to resolve the issue, since the relatives built in good
faith, believing they had rights to the land. Florencio had the choice to either sell the land
or accept compensation for the improvements made by his relatives, provided reasonable
terms were agreed upon.

Key Points from the Cases:

1. Builders in Good Faith: A person can be considered a builder in good faith when they
believe they have title to the land on which they build, and the land later turns out to
belong to another. In such cases, they may be entitled to indemnity for necessary
improvements under Article 448 of the Civil Code.
2. Co-Ownership Situations: In co-ownership, a co-owner is not a third-party builder, and
Article 448 does not directly apply unless the co-ownership is terminated by a partition.
 In cases of partition, if a co-owner’s improvements encroach on another’s land, the
provisions of Article 448 can be invoked, but the landowner has the choice to either buy
the improvements or compensate the builder.
3. Improvements during Lease: When improvements are made under a lease arrangement,
the builder's rights are not governed by Article 448, but instead by Article 1678, which
provides that a lessee who builds improvements in good faith may receive compensation
or have the improvements removed at the termination of the lease.

Conclusion:

The Lacap case clarifies that even though the spouses believed they had a right to the property,
once they began paying rent, they acknowledged the bank’s ownership, and their status shifted
from potential owners to tenants. Therefore, Article 448 did not apply, and instead, the
appropriate remedy for their improvements was found under the lease provisions. The cases
involving co-ownership, however, illustrate that when ownership changes, Article 448 may
apply to protect the rights of builders in good faith, especially after the termination of co-
ownership through partition.

Article 448 of the Civil Code

This article addresses a situation where someone builds, plants, or sows on land that they do not
own. If the builder, planter, or sower is in good faith, meaning they believe they have the right to
do so, the law grants them two potential rights:

1. Reimbursement for the Improvements: The builder, planter, or sower can demand
compensation for the value of the improvements they made on the land.
2. Option for the Landowner: The landowner has the option to either:
o Pay for the improvements made by the builder, or
o Sell the land to the builder if the improvements are substantial and the value of the land
is not far greater than the improvements.

If the builder, planter, or sower is in bad faith (i.e., they knowingly built or planted on land they
don’t own), they lose these rights. The landowner then has the right to demand the removal of
the improvements at the builder's expense.

Key Legal Concepts Illustrated in the Cases

1. Sarmiento v. Agana (1984)

 Facts: The Valentino spouses built a house on land they thought was owned by the wife’s
mother. The mother-in-law gave permission for them to build, but it was later revealed that the
land was actually owned by someone else (Jose Santos Jr.). In this case, the court ruled that the
spouses Valentino were builders in good faith, as they had no knowledge that they were
constructing on someone else’s property.
 Court Ruling: The court applied Article 448, allowing the spouses Valentino to either be
reimbursed for the value of the house they built or purchase the land. The landowner
 (Sarmiento) could not simply ask them to vacate the land without paying for the house or selling
the land. This case shows that builders in good faith can claim compensation or an option to
purchase the land if they constructed in good faith.

2. Macasaet v. Macasaet (2002)

 Facts: The children of the Macasaet family built their house on their parents' land, under
the assumption that they had the right to do so. This was done out of familial love and
solidarity, as the parents invited them to occupy the land. However, due to a family
conflict, the parents later asked the children to vacate the land.
 Court Ruling: The court ruled that the children were also builders in good faith, even
though they were building on land owned by their parents. The Court held that good faith
is presumed unless proven otherwise, and in this case, the children did not have any
reason to believe that they were doing something wrong. Article 448 was applied in
favor of the children, meaning that the parents could not simply remove the house
without compensating them for their improvements.
 Key Legal Principle: This case further clarifies that family members who build on a
relative’s land under the assumption of permission can be considered builders in good
faith under the law.

3. Technogas Philippines Manufacturing Corp. v. Court of Appeals (1997)

 Facts: Technogas purchased a parcel of land with existing buildings, including a wall, from Pariz
Industries. Later, they discovered that part of their buildings encroached onto a neighboring
property owned by Eduardo Uy. Technogas offered to buy the land occupied by the encroaching
buildings, but Uy refused. Technogas then sought to compel Uy to either sell the land or pay for
the improvements.
 Court Ruling: The court ruled in favor of Technogas, allowing them to invoke Article 448, even
though they were not the original builders of the encroaching structures. Since Technogas
bought the property in good faith and was unaware of the encroachment at the time of
purchase, they were granted the right to force the landowner (Uy) to either sell the land or pay
for the value of the improvements.
 Key Legal Principle: This case is significant because it shows that buyers who acquire property
with improvements in good faith can inherit the rights of the original builder under Article 448.
Technogas was treated as if they were the builder themselves because they were unaware of
the encroachment at the time of the purchase.

4. Quemel v. Olaes (1961)

 Facts: The Quemel spouses built a house on land they believed to be owned by the Olaes
spouses. Later, the court ordered the Quemels to vacate the land and pay a monthly rental to
the Olaes. The Quemel spouses tried to compel the Olaes to sell the land on which their house
stood, invoking Article 448.
 Court Ruling: The court ruled that Article 448 did not apply in this case. The Quemel spouses
were not considered builders in good faith, and even if they had been, they could not compel
the Olaes to sell the land. The court emphasized that under Article 448, the landowner has the
 option to either sell the land or appropriate the improvements, but the builder cannot demand
the sale of the land.
 Key Legal Principle: The key takeaway is that only the landowner has the right to choose
whether to sell the land or to appropriate the improvements made by the builder. A builder in
good faith can only seek reimbursement for their improvements, not force a sale of the land.

Legal Effects of Both Parties Being in Good Faith

 If both the builder and the landowner act in good faith, Article 448 ensures a fair resolution.
The builder is entitled to reimbursement for the improvements made on the land. However, the
landowner holds the option to either:
o Retain the improvements by compensating the builder, or
o Sell the land to the builder, if the land’s value is comparable to or less than the value of
the improvements.

The builder does not have the right to force the sale of the land; they can only ask for
compensation for their improvements. This is based on the principle of accession, which dictates
that the accessory follows the principal. The land is considered the principal thing, and the
building or improvement is the accessory.

1. The Landowner’s Right to Choose

In situations where there is a conflict between a landowner and a builder (or person who made
improvements) acting in good faith, the landowner is granted two options by Article 448:

1. Appropriate the building or improvement, by paying the builder the proper indemnity (fair
compensation).
2. Oblige the builder to buy the land on which the improvement stands.

Important Rule: The landowner must choose one of these two options. They cannot refuse to
exercise either option and cannot compel the builder to remove the improvements from the land.
This is a clear limitation to their choices. If the landowner refuses to make a decision, the builder
may compel the landowner to exercise one of the two options.

2. Remotion of the Structure

The option of removal of the structure is only available if:

 The landowner chooses to sell the land to the builder at a reasonable price, but the builder fails
to pay the price.
 This would trigger the removal of the building or improvement, but only after the failed
payment. This clarifies that the landowner does not have the right to simply remove the building
at will.
3. Technogas Case

In the Technogas Philippines Manufacturing Corp. v. CA case, the builder (Technogas)

purchased a property with buildings and improvements. After purchasing the property, they
discovered that part of their structure encroached onto a neighboring property owned by
Eduardo Uy.

Technogas, acting in good faith, offered to buy the encroaching portion of Uy’s land. Uy,
however, refused to sell, and Technogas filed a suit to compel Uy to sell the land.

The Supreme Court held that Article 448 applies here, as both parties (Technogas and Uy)
were in good faith. The Court emphasized that the landowner (Uy) has to choose one of the two
options granted by Article 448:

 To appropriate the encroaching building, after paying the builder for the improvement, or
 To sell the land occupied by the structure to the builder.

The court also clarified that removal of the structure was not a valid remedy for Uy under the
law, unless he first chose the option to compel the builder to buy the land and the builder failed
to pay the price.

4. The Landowner’s Refusal to Choose

The Court clarified that if a landowner refuses to exercise either option, the builder in good
faith can compel the landowner to make a decision. The builder cannot be left in a situation
where the landowner neither accepts compensation for the improvements nor agrees to sell the
land.

5. What Happens if the Landowner Refuses to Decide?

If the landowner does not decide, the builder in good faith has the right to push for the decision,
and the case can proceed under the court’s supervision. If the landowner chooses to sell the land,
but the builder does not pay, the remedy of removal of the building becomes available.
Otherwise, the builder has the option to pay the price for the land if the landowner chooses to
sell.

6. Further Proceedings in the Trial Court

The Court remanded the case back to the trial court for further proceedings to determine:

 The fair price of the land (520 square meters in this case).
 The increased value of the land because of the improvement.
 The fair market value of the encroaching portion of the building.
 Whether the land is more valuable than the improvement.
These determinations would help resolve the dispute and assist the trial court in deciding which
option the landowner would choose under Article 448.

1. Indemnity for Improvements (Right to Compensation)

In situations where a person builds something on land they don’t own, the builder has a right to
be compensated for any improvements made—like constructing a house, planting trees, or
making other useful changes to the land. This applies only if the builder acted in good faith,
meaning they honestly believed the land belonged to them.

 Example of Indemnity: Imagine a person (Builder A) builds a small house on a piece of

land, thinking it’s his own property. Later, he finds out the land belongs to someone else
(Landowner B). In this case, Builder A would be entitled to compensation for the value
of the house he built, as long as he was acting in good faith (not knowing that the land
was not his). The amount he should be reimbursed is based on the current market value of
the house, not just what he spent to build it.
 Why Market Value?: In Pecson v. Court of Appeals, the court decided that the "current
market value" of an improvement should be used for reimbursement. This prevents unfair
outcomes where the landowner might only have to pay the original construction cost,
which might be much less than what the property is worth now.

2. Right of Retention (Holding the Property)

If the builder is in good faith, they also have a right of retention. This means the builder can
hold onto the land and its improvements (like the house they built) until they are paid for the
value of those improvements. The builder doesn’t need to pay rent for staying on the land during
this time.

 Example of Retention: Suppose Builder A built a house on Landowner B's property, and
Landowner B agrees to pay Builder A for the house. If for some reason Landowner B
doesn’t pay immediately, Builder A has the right to keep living in the house and stay on
the land until the payment is made. The builder also does not have to pay rent during this
time.

3. Landowner's Right to Appropriation or Ownership

In cases where the builder (or planter, sower, etc.) built something on land they don’t own, the
landowner can choose to keep the improvements, but they must compensate the builder if the
builder acted in good faith. However, if the builder acted in bad faith (they knew the land wasn’t
theirs), the landowner can appropriate the improvements without paying for them.

 Example of Appropriation: Suppose Builder A builds a large building on land, but it

turns out that the land is actually owned by Landowner B, and Builder A knowingly used
the wrong property to build. Landowner B doesn’t have to pay Builder A any indemnity,
because Builder A is acting in bad faith. Landowner B can choose to keep the building or
take it down, and Builder A would lose everything he built.
4. Consequences for Builders in Bad Faith

If the builder is in bad faith, the landowner has the right to seize the improvements without
paying for them. The builder loses all the value of the property they’ve improved. Furthermore,
if the landowner chooses, they can also demand that the improvements be removed or
demolished at the builder's expense.

 Example of Bad Faith: Let's say Builder A builds a house on Landowner B’s land, but
Builder A knows that the land isn’t his. If Landowner B discovers that Builder A is in bad
faith, he can demand that the house be demolished, and Builder A would have to pay
for the demolition. Landowner B would not owe Builder A anything for the house and
could instead choose to keep the land as it was before the house was built.

5. Case Example: Santos v. Mojica (1969)

In this case, the court ruled that a builder (Leonardo Santos) who built a house in bad faith
(because the land did not belong to him) would lose the right to claim indemnity for the house.
The court also gave the landowner the option to either keep the house or demolish it at the
builder's expense. Since the builder was in bad faith, they lost all rights to the house and could
not claim any payment for it.

 Outcome: The court decided that the landowner could either take the house as part of the
property (without paying for it) or remove it at the builder's expense.

Right to Compel Payment of the Price of the Land

In certain situations, if a builder, planter, or sower makes improvements to land they don’t
own, the landowner may compel them to pay for the land itself or pay proper rent. This right
exists even if the value of the land is much greater than the value of the improvements made.

 Example: Suppose someone builds a house on someone else's land and does so without
the landowner’s consent. In this case, the landowner may demand that the builder pays
for the land or pays rent, even if the value of the land is much higher than the house.
 Note: This applies only to builders and planters. If someone plants crops or sows seeds,
they are typically required to pay rent.

Limited Rights of Builder, Planter, or Sower in Bad Faith

The law recognizes that the landowner has various rights, but builders, planters, or sowers
who act in bad faith (knowing that the land is not theirs) have limited rights. They can only be
reimbursed for necessary expenses to preserve the land, not for improvements like buildings or
trees unless these were necessary for preservation.

 Example: If someone plants coconut trees on another person's land, believing the land is
theirs, and later finds out they acted in bad faith, they can only claim reimbursement for
the costs of maintaining the trees (not the value of the trees). However, the landowner
 doesn't have to pay for the coconut trees as they are considered “improvements,” not
“necessary expenses.”

Rules That Will Govern If Both Parties Acted in Bad Faith

When both the landowner and the builder or planter act in bad faith, their rights are treated as
though they were both acting in good faith. This neutralizes their bad faith, and the legal rights
apply as if both acted in good faith.

 Example: If both the builder and the landowner knew that the land wasn’t theirs but
proceeded with construction anyway, the legal rights would treat them as though they
both acted in good faith, and they would have to follow the rules as if they didn’t know
the land wasn’t theirs.

Bad Faith of the Landowner

If the landowner knew that someone was building, planting, or sowing on their land without
permission and didn’t object, the law considers the landowner to be acting in bad faith. This
means that the landowner’s rights in this situation will be treated as if they had no objection to
the improvements, even though they didn’t give permission.

 Example: If a person starts building on someone else’s land, and the landowner sees it
but does nothing to stop it, the law will treat the landowner as though they agreed to the
improvements.

Landowner in Bad Faith, Builder in Good Faith

According to Article 454, if the landowner is in bad faith (meaning they knew about the
construction but didn’t object), the builder or planter who acted in good faith (thinking the land
was theirs) will have the right to be compensated for their labor, as the builder believed the land
was rightfully theirs.

 Example: If the landowner knew the builder was working on their land but didn’t stop
them, the builder would have the right to be paid for the work they did, as the builder
believed they had the right to build there.

Building on Another’s Land Using Another’s Materials

Here, Article 455 addresses a situation where the builder, planter, or sower uses someone
else’s materials to build, plant, or sow on land they don’t own.

 The owner of the materials may be affected based on whether they acted in good faith
or bad faith.

If the Owner of the Materials Acted in Bad Faith

If the owner of the materials knew their materials were being used on someone else’s land
without permission and didn’t object, the owner of the materials loses their right to those
materials without any compensation.

 Example: If someone provides materials to a builder and knows that the builder is using
those materials on land they don't own, the owner of the materials can lose their right to
them because they didn’t stop it.

Rights of the Landowner

If the owner of the materials is in bad faith, the landowner can take the improvements made on
their land without having to pay the material owner.

 Example: If the builder uses materials owned by someone else, and that material owner
didn’t stop it, the landowner may take what was built without compensating the material
owner.

If the Owner of the Materials Acted in Good Faith

If the owner of the materials didn’t know their materials were used on someone else’s land,
they can be reimbursed for the value of the materials.

 Example: If someone lends materials for building without knowing they’re being used on
land that doesn’t belong to the builder, they can recover the value of the materials they
provided.

Builder, Planter, or Sower Is Primarily Liable

If the builder, planter, or sower uses another person's materials, they are responsible for paying
the material owner, and if they acted in bad faith, they might need to pay damages.

 Example: If the builder acted in good faith but used materials that weren’t theirs, they’re
still responsible for compensating the material owner.