Right of Accession (Arts.

440-475 NCC)
Concept/Definition
Kinds of Accession
1) Discreta (fruits).

Bachrach v Seifert; G.R. No. L-2659. October 12, 1950.

Bachrach v. Seifert [G.R. No. L-2659. October 12, 1950.]

Facts: The deceased E. M. Bachrach, who left no forced heir except his widow Mary
McDonald Bachrach, in his last will and testament made various legacies in cash and
willed the remainder of his estate. The estate of E. M. Bachrach, as owner of 108,000
shares of stock of the Atok-Big Wedge Mining Co., Inc., received from the latter
54,000 shares representing 50 per cent stock dividend on the said 108,000 shares.
On June 10, 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the
estate, petitioned the lower court to authorize the Peoples Bank and Trust Company,
as administrator of the estate of E. M. Bachrach, to transfer to her the said 54,000
shares of stock dividend by indorsing and delivering to her the corresponding
certificate of stock, claiming that said dividend, although paid out in the form of
stock, is fruit or income and therefore belonged to her as usufructuary or life tenant.
Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said petition on
the ground that the stock dividend in question was not income but formed part of the
capital and therefore belonged not to the usufructuary but to the remainderman.
While appellants admit that a cash dividend is an income, they contend that a stock
dividend is not, but merely represents an addition to the invested capital.
Issue: Whether or not a dividend is an income and whether it should go to the
usufructuary.
Held: The usufructuary shall be entitled to receive all the natural, industrial, and civil
fruits of the property in usufruct. The 108,000 shares of stock are part of the property
in usufruct. The 54,000 shares of stock dividend are civil fruits of the original
investment. They represent profits, and the delivery of the certificate of stock
covering said dividend is equivalent to the payment of said profits. Said shares may
be sold independently of the original shares, just as the offspring of a domestic
animal may be sold independently of its mother. If the dividend be in fact a profit,
although declared in stock, it should be held to be income. A dividend, whether in the
form of cash or stock, is income and, consequently, should go to the usufructuary,
taking into consideration that a stock dividend as well as a cash dividend can be
declared only out of profits of the corporation, for if it were declared out of the capital
it would be a serious violation of the law.
Under the Massachusetts rule, a stock dividend is considered part of the capital and
belongs to the remainderman; while under the Pennsylvania rule, all earnings of a
corporation, when declared as dividends in whatever form, made during the lifetime
of the usufructuary, belong to the latter. The Pennsylvania rule is more in accord with
our statutory laws than the Massachusetts rule.

Bachrach Motor v Talisay-Silay; G.R. No. 35223. September 17, 1931.

Facts: On 22 December 1923, the Talisay-Silay Milling Co., Inc., was indebted to the
PNB. To secure the payment of its debt, it succeeded in inducing its planters, among
whom was Mariano Lacson Ledesma, to mortgage their land to the bank. And in order
to compensate those planters for the risk they were running with their property under
that mortgage, the aforesaid central, by a resolution passed on the same date, and
amended on 23 March 1928, undertook to credit the owners of the plantation thus
mortgaged every year with a sum equal to 2% of the debt secured according to the
yearly balance, the payment of the bonus being made at once, or in part from time to
time, as soon as the central became free of its obligations to the bank, and of those
contracted by virtue of the contract of supervision, and had funds which might be so
used, or as soon as it obtained from said bank authority to make such payment.
<It seems Mariano Lacson Ledesma is indebted from Bachrach Motor; the
circumstance of which is not found in the case facts.>
Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc.,
for the delivery of the amount of P13,850 or promissory notes or other instruments of
credit for that sum payable on 30 June 1930, as bonus in favor of Mariano Lacson
Ledesma. The complaint further prays that the sugar central be ordered to render an
accounting of the amounts it owes Mariano Lacson Ledesma by way of bonus,
dividends, or otherwise, and to pay Bachrach Motors a sum sufficient to satisfy the
judgment mentioned in the complaint, and that the sale made by said Mariano
Lacson Ledesma be declared null and void. The PNB filed a third
party claim alleging a preferential right to receive any amount which Mariano Lacson
Ledesma might be entitled from Talisay-Silay Milling as bonus. Talisay-Silay answered
the complaint that Mariano Lacson Ledesmas credit (P7,500) belonged to Cesar
Ledesma because he had purchase it. Cesar Ledesma claimed to be an owner by
purchase in good faith. At the trial all the parties agreed to recognize and respect the
sale made in favor of Cesar Ledesma of the P7,500 part of the credit in question, for
which reason the trial court dismissed the complaint and cross-complaint against
Cesar Ledesma authorizing the central to deliver to him the sum of P7,500. And upon
conclusion of the hearing, the court held that the Bachrach Motor Co., Inc., had a
preferred right to receive the amount of P11,076.02 which was Mariano Lacson
Ledesmas bonus, and it ordered the central to deliver said sum to Bachrach Motors.
PNB appealed.
The Supreme Court affirmed the judgment appealed from, as it found no merit in the
appeal;, without express finding as to costs.
1. Civil Fruits under Article 355 of the Civil Code
Article 355 of the Civil Code considers three things as civil fruits: First, the rents of
buildings; second, the proceeds from leases of lands; and, third, the income from
perpetual or life annuities, or other similar sources of revenue. According to the
context of the law, the phrase u otras analogas refers only to rents or income, for
the adjectives otras and analogas agree with the noun rentas, as do also the
other adjectives perpetuas and vitalicias. The civil fruits the Civil Code
understands one of three and only three things, to wit: the rent of a building, the rent
of land, and certain kinds of income.
2. Bonus not a civil fruit; not an income of the land

The amount of the bonus, according to the resolution of the central granting it, is not
based upon the value, importance or any other circumstance of the mortgaged
property, but upon the total value of the debt thereby secured, according to the
annual balance, which is something quite distinct from and independent of the
property referred to. As the bonus is not obtained from the land, it is not civil fruits of
that land. It is neither rent of buildings, proceeds from lease of lands, or income
under Article 355 of the Civil Code.

Equatorial v Mayfair; G.R. No. 133879. November 21, 2001.

While execution of a public instrument of sale is recognized by law as equivalent to

the delivery of the thing sold, such constructive or symbolic delivery is merely
presumptive. It is nullified by the failure of the vendee to take actual possession of
the land sold.
FACTS: Carmelo & Bauermann, Inc. owned a land, together with two 2-storey
buildings at Claro M. Recto Avenue, Manila, and covered by TCT No. 18529.
On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc.
fpr 20 years. The lease covered a portion of the second floor and mezzanine of a twostorey building with about 1,610 square meters of floor area, which respondent used
as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second Lease with
Carmelo for another portion of the latters property this time, a part of the second
floor of the two-storey building, and two store spaces on the ground floor. In that
space, Mayfair put up another movie house known as Miramar Theater. The Contract
of Lease was likewise for a period of 20 years.
Both leases contained a clause giving Mayfair a right of first refusal to purchase the
subject properties. Sadly, on July 30, 1978 - within the 20-year-lease term -- the
subject properties were sold by Carmelo to Equatorial Realty Development, Inc. for
eleven million smackers, without their first being offered to Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair filed a
Complaint before the Regional Trial Court of Manila for the recission of the Deed of
Absolute Sale between Carmelo and Equatorial, specific performance, and damages.
RTC decided for Carmelo and Equatorial. Tsk tsk.CA reversed and ruled for Mayfair.
The SC denied a petition questioning the CA decision. What happened is that the
contract did get rescinded, Equatorial got its money back and asserted that Mayfair
have the right to purchase the lots for 11 million bucks.
Decision became final and executory, so Mayfair deposited with the clerk the 11M
(less 847grand withholding) payment for the properties (Carmelo somehow
disappeared).Meanwhile, on Sept 18, 1997, barely five months after Mayfair
submitted its Motion for Execution, Equatorial demanded from Mayfair backrentals
and reasonable compensation for the Mayfairs continued use of the subject premises
after its lease contracts expired. Remember that Mayfair was still occupying the
premises during all this hullabaloo.
ISSUE: Whether or not Equatorial was the owner of the subject property and could
thus enjoy the fruits and rentals.
HELD:NO. Nor right of ownership was transferred from Carmelo to Equatorial since

there was failure to deliver the property to the buyer. Compound this with the fact
that the sale was even rescinded.
The court went on to assert that rent is a civil fruit that belonged to the owner of the
property producing it by right of accession. Hence, the rentals that fell due from the
time of the perfection of the sale to petitioner until its rescission by final judgment
should belong to the owner of the property during that period.
We remember from SALES that in a contract of sale, one of the contracting parties
obligates himself to transfer ownership of and to deliver a determinate thing and the
other to pay therefor a price certain in money or its equivalent.
Ownership of the thing sold is a real right, which the buyer acquires only upon
delivery of the thing to him in any of the ways specified in articles 1497 to 1501, or
in any other manner signifying an agreement that the possession is transferred from
the vendor to the vendee. This right is transferred, not by contract alone, but by
tradition or delivery. There is delivery if and when the thing sold is placed in the
control and possession of the vendee.
While execution of a public instrument of sale is recognized by law as equivalent to
the delivery of the thing sold, such constructive or symbolic delivery is merely
presumptive. It is nullified by the failure of the vendee to take actual possession of
the land sold.
For property to be delivered, we need two things. Delivery of property or title, and
transfer of control or custody to the buyer.
Possession was never acquired by the petitioner. It therefore had no rights to rent.

2) Continua.
a) Over immovables.
i)

Artificial/industrial BPS

Bernardo v Bataclan; G.R. No. 44606. November 28, 1938.

Ignacio v Hilario; G.R. No. L-175. April 30, 1946.

Sarmiento v Agana; G.R. No. 57288. April 30, 1984.

Depra v Dumlao; G.R. No. L-57348. May 16, 1985.

Tecnogas Phil v CA; G.R. No. 108894. February 10, 1997.

Ortiz v Kayanan; G.R. No. L-32974. July 30, 1979.

Geminiano v CA; G.R. No. 120303. July 24, 1996.

Pleasantville Devt Corp v CA; G.R. No. 79688; February 1, 1996.

Felices v Iriola; G.R. No. L-11269. February 28, 1958.

Sps Nuguid v CA (2005); G.R. No. 151815. February 23, 2005.

ii)

Natural.
Alluvium.

Republic v CA; G.R. No. L-61647. October 12, 1984.

Grande v CA; G.R. No. L-17652. June 30, 1962.

Republic v Meneses; G.R. No. L-61647. October 12, 1984.

Avulsion.

Heirs of Navarro v IAC; G.R. No. 68166. February 12, 1997.

Change of course of river.

Baes v CA; G.R. No. 108065. July 6, 1993.

Binalay v Manalo; G.R. No. 92161. March 18, 1991.|||

Formation of islands.
iii) Reverse accession.
b) Over movables.
i)

Conjunction and adjunction.

Inclusion or engraftment.
Soldadura.
Tejido.
Escritura.
Pintura.

ii)

Commixion and confusion.

Siari Valley Estates v Lucasan; G.R. No. L-11005. October 31, 1957.

Montelibano v Bacolod Murcia; G.R. No. L-5416; July 26, 1954.

iii) Specification.

(to be continued)