Accession Discreta – rights pertaining to the owner of a thing
over everything which is produced thereby such as natural,
industrial and civil fruits
Bachrach v. Seifert, 87Phil. 117
Petitioner, Mary McDonald is the widow of Emil Maurice
Bachrach. In her late husband’s will and testament, he left all
of his estate to the enjoyment of his wife, Mary.
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% stock dividend on
the said shares.
On 1948, Mary, as usufructuary, petitioned the lower court to
authorize the Peoples Bank and Trust Company, as
administrator of the estate, to transfer to her the said 54,000
shares by endorsing 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 usufructury.
Siefert and Elianoff, legal heirs, opposed on the ground that
the stock dividend was not income but formed part of the
capital. While appellants admit that a cash dividend is an
income, they contend that a stock dividend is not, but merely
an addition to the invested capital.
Issue: Whether a dividend is an income and should go to the
usufructuary.
Held: Article 471 provides that the usufructuary shall be
entitled to receive all the natural, industrial, and civil fruits of
the property in usufruct.
A dividend, whether in the form of cash or stock, is income or
fruit and consequently should go to the usufructuary rather
than the owner of the shares of stock in usufruct. Dividend is
declared only out of the profits of a corporation and not out of
its capital.
Bachrach v. Talisay Silay, 56 Phil. 117
On 1923, the Talisay-Silay, was indebted to the PNB. To secure
the payment, it succeeded in inducing its planters, among
whom was Ledesma, to mortgage their land to the bank.
In order to compensate those planters for the risk, the sugar
mill undertook to credit the owners of the plantation thus
mortgaged every year with a sum equal to 2% of the debt, 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.
Bachrach filed a complaint against the Talisay-Silay for the
delivery of the amount of P13,850 or promissory notes for that
sum payable on 30 June 1930, as bonus in favor of Ledesma.
The complaint further prays that the sugar central be ordered
to render an accounting of the amounts it owes Ledesma by
way of bonus, dividends, or otherwise, and to pay Bachrach a
sum sufficient to satisfy the judgment mentioned in the
complaint, and that the sale made by said Ledesma be
declared null and void.
PNB filed a third party claim alleging a preferential right to
receive any amount which Ledesma might be entitled as
bonus. Talisay-Silay answered the complaint that Ledesma’s
credit (P7,500) belonged to Cesar Ledesma because he had
purchase it. Cesar 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, for which reason the
court dismissed the complaint and cross-complaint against
Cesar authorizing the central to deliver to him the sum of
P7,500. And upon conclusion of the hearing, the court held
that the Bachrach had a preferred right to receive Ledesma’s
bonus, and it ordered the central to deliver said sum to
Bachrach . PNB appealed.
SC affirmed the judgment appealed from, as it found no merit
in the appeal; without express finding as to costs.
Civil Fruits under Article 355 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.
The amount of the bonus is not based upon the value, 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.
Accession Continua – right pertaining to the owner of a thing
over everything which is incorporated or attached thereto
either naturally or artificially
Bernardo v. Bataclan, 66 Phil. 598
Bernardo purchased a property from Pastor Samonte. When
he entered into the premises of the property, he learned that
Samonte authorised Catalino Bataclan to make improvements
thereon.
In a civil case to secure possession, the court ruled that
Baraclan was a builder and possessor in good faith and was
entitled to reimbursement for the works and improvements.
The court gave the plaintiff 30 days within which to choose
between the sale of the land or to buy the works. Bernardo
decided to sell the land to the defendant but the latter
informed the court that he is unable to pay the sum required.
The court then awarded the respondent 30 days to purchase
the land or else the property will be sold in a public auction.
In the auction sale, Toribio Teodoro was the highest bidder.
The purchaser sought judicial remedy for the possession of the
property.
Issue: Whether the defendant lost his right to retain the
property pending payment for indemnity.
Decision: The court ruled that the right to retain the property
has already been lost. Due to the failure and inability of the
defendant to pay the purchase price the subject property was
sold in a public auction. Furthermore, he already received his
share of the purchase price. Therefore, the court find no
reason to keep the property in the possession of the
defendant.
Ignacio v. Hilario, 76 Phil. 605
This is a petition for certiorari arising from a case in the CFI of
Pangasinan between respondents spouses Hilario and the
herein petitioners Damian, Francisco and Luis, surnamed
Ignacio, as defendants, concerning the ownership of a parcel
of land, partly rice-land and partly residential.
After the trial of the case, the court, presided over by Hon.
Alfonso Felix, rendered judgment holding plaintiff Hilario, as
the legal owners of the whole property but surrendering to
defendants, Ignacio, the ownership of the houses and
granaries built by them on the residential portion with the
rights of a possessor in good faith, in accordance with article
361 of the Civil Code.
Hilario, prayed for an order of execution alleging that since
they chose neither to pay defendants for the buildings nor to
sell to them the residential lot, said defendant, Ignacio, should
be ordered to remove the structure at their own expense and
to restore plaintiff in the possession of said lot.
Issue: Whether Plaintiff, can validly opt not to buy the house
nor sell the land, but instead order the removal of those
structures that Ignacio built in good faith.
Ruling: No. The owner of the building erected in good faith on
a land owned by another, is entitled to retain the possession
of the land until he is paid the value of his building, under
article 453.
The owner of the land, upon the other hand, has the option,
under article 361, either to pay for the building or to sell his
land to the owner of the building. But he cannot, as
respondents here did, refuse both to pay for the building and
to sell the land and compel the owner of the building to
remove it from the land where it is erected. He is entitled to
such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same.
Sarmiento v. Agana, 129 SCRA 122
Before Ernesto Valentino and Rebeca Lorenzo wed, Rebecca’s
mother offered a lot located in Paranaque for the construction
of their home.
In 1967, they finally built their home which cost about P8,000-
10,000, thinking that someday, the lot would be transferred to
their name. It turns out that the lot was owned by the Spouses
Santos who, in turn, sold the same to Leonila Sarmiento in
1974. A year later, Sarmiento ordered the Valentinos to vacate
their lot, then eventually filed and Ejection Suit against them.
The lower court ruled in Sarmiento’s favor and ordered her to
pay 20,000 as the value of the house. But the case was then
elevated to the CFI of Pasay (w/ Agana as Judge), and pursuant
to Art.448, the Court ordered Sarmiento to exercise the option
in 60 days to pay Ernesto 40,000 as the value of the house or
to let them purchase the land for 25,000. Sarmiento was not
able to exercise this option, and the CFI allowed Ernesto to
deposit the 25,000 purchase price with the Court.
ISSUE: Whether the land owner is compelled to exercise either
option: to buy the building or to sell the land?
HELD: Ernesto and his wife were clearly in good faith as they
believed that Rebecca’s mother has the capacity to eventually
transfer the title of the land to them. In line with this,
Sarmiento was required to exercise only 2 options: To
purchase the house or to sell the land to them, in this case,
based on the value decided by the courts. Since Sarmiento
failed to exercise the option within the allotted period, and
based on Art. 448, the land owner is compelled by law to
exercise either. Not choosing either is a violation of the law.
Depra v. Dumlao, 136 SCRA 475
Francisco Depra, is the owner of a parcel of land situated in
Dumangas, Iloilo. Agustin Dumlao, defendant owns the
adjoining lot. When DUMLAO constructed his house, the
kitchen had encroached on an area of 34SQM of DEPRA’s
property.
After the encroachment was discovered in a relocation survey
of DEPRA’s lot, his mother, Beatriz Depra after writing a
demand letter asking DUMLAO to move back from his
encroachment, filed an action for Unlawful Detainer. Said
complaint was later amended to include Francisco Depra as a
party plaintiff.
After trial, the MTC found that DUMLAO was a builder in good
faith, and applying Article 448. DEPRA did not accept payment
of rentals so that DUMLAO deposited such rentals with the
court.
In this case, the MTC, acted without jurisdiction, its Decision
was null and void and cannot operate as res judicata to the
subject complaint for Queting of Title. The court conceded in
the MCs decision that Dumlao is a builder in good faith.
Held: Owner of the land on which improvement was built by
another in good faith is entitled to removal of improvement
only after landowner has opted to sell the land and the builder
refused to pay for the same. Res judicata doesn’t apply
wherein the first case was for ejectment and the other was for
quieting of title.
ART. 448. The owner of the land on which anything has been
built sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of
the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building
or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
Technogas Philss v. CA 268 SCRA 5
Technogas purchased a parcel of land with all buildings and
improvements from Pariz Industries. Eduardo Uy, respondent,
was the owner of the adjoining lot. Technogas then later
discovered that portions of the building and wall of a portion
of Uy’s land, and so it offered to buy that portion BUT Uy
refused. Parties then entered an agreement that Technogas
will demolish wall but it still haven’t done so, which caused Uy
to have dug a canal along plaintiff’s wall where a portion of
which collapsed. RTC was in favour of Technogas that Uy sell
portion. CA reversed ruling that Technogas was in bad faith.
Technogas as builder was not in bad faith. When it bought the
land, buildings and other improvements were already in
existence. It is not clear who built such bet it is assumed that it
was Pariz who did so.
Article 527 of NCC presumes good faith and since no proof
exists to show that encroachment was done in bad faith, it
should be presumed that there it was in good faith. The good
faith of Pariz extended to Technogas. Article 448 applies even
if Technogas was not the builder but possesses the same as
buyer. As such, Uy cannot demand removal of the wall since
this is not one of the remedies he has. Such would be available
only if he chooses to compel the petitioner to buy the land but
the latter fails to pay the price. Since such did not happen, the
options of Uy are limited to: appropriating portion after
payment of proper indemnity or obliging latter to buy.
Petitioner also could not demand Uy to sell portion but it must
then pay the rent of the land.
Ortiz v. Kayanan, 92 SCRA 146
Martin Dolorico transferred his land subject of a homestead
application to his heirs, not to his ward, Ortiz who was actually
in physical possession and who had made improvements
thereon.
Respondent Comintan and Zamora acquired said land from
Dolorico’s heirs by virtue of sales applications. Court found
Ortiz to be in good faith, but held the public bidding to be valid.
If petitioner was not found to be the winner, Comintan and
Zamora are to reimburse him for P13,632. Ortiz is to retain
possession until the amount is paid.
Respondent Judge discovered that after the decision of the
lower courts, Ortiz collected tolls on portion of the land even
if he had not introduced any improvements on said portions
estimated to amount to P25,000.
Held: Petitioner is NOT entitled to fruits while Comintan and
Zamora have yet to pay the indemnity due him. Before
possession is legally interrupted, possessor in good faith is
entitled to fruits. This right ceases upon defects being known.
This is known as a right to retention, for the creditor to obtain
payment of a debt. Also we must consider that tolls were
collected from portions with no improvements of petitioner,
therefore he really has no right to said fruits.
Geminiano v. CA, 259 SCRA 10
Petitioners are heirs of Paulina Geminiano who executed a
contract of lease to private respondent Mary Nicolas in 1978.
It was established, however, that one Maria Lee through a
court decision in 1972 acquired the property.
Ownership of the land passed from Lee to Salcedo to the
spouses Dionisio. The Dionisios executed a quitclaim over the
property over the petitioners in 1992. During this period,
Nicolas held possession of the property as lessee and has built
several improvements.
On 1993, petitioners sent respondent a notice to vacate as well
as a demand to pay rentals in arrears. Respondents refused,
prompting an unlawful detainer action from petitioners.
Controversy revolved around the status of respondent: was
she a possessor/builder or a lessee?
Respondent was a lessee and not a possessor. It was admitted
that although the petitioners’ mother was no longer the owner
when the contract of lease was executed, Maria Lee, the
adjudged owner of the property in the earlier suit, never
sought a writ of possession. Hence, Geminiano remained in
possession of the property. Nicolas is now estopped from
claiming that she is a possessor or builder rather than a lessee.
Hence, the provision for building planting and sowing,
specifically Art. 448 does not apply.
The applicable provision is Art. 1678 governing lessees who
introduced improvements. However, the right of the lessee to
be indemnified under that provision will only arise if the lessor
opts to appropriate the improvements. It was not shown that
the petitioners exercised that option. The only right that
Nicolas has is to remove the improvements without causing
any more impairment upon the property.
Pleasantville v. Court of Appeals
Jardinico purchased a parcel of land in Pleasantville
Subdivision from Edith Robillo, who had the title to Lot 9.
Subsequently, Kee purchased Lot 8 from Pleasantville
Subdivision, but an agent ofpetitioner pointed out Lot 8 as the
lot that he owned. As a result of this representation, Kee
proceeded to build his home and auto shop on Lot 8. Jardinico
then demanded that Kee vacate the premises which the
former owned. Kee disclaims liability, as he merely relied on
the agent of petitioner.
KEE, IN RELYING ON ACT THE AGENT OF PETITIONER, WAS A
BUILDER IN GOOD FAITH.
1. They were the direct cause of the error committed by Kee in
building upon Lot 8.
2. Kee is not expected to be versed in technical descriptions of
property, thus agent was supposed to have authority in
pointing out which of the lands were Lot 8. Steps taken to
protect interests were reasonable.
3. Violations of the Contract which had nothing to do with the
identity of the land is not enough to disprove good faith.
Felices v. Iriola
Felices entered into a conditional sale with Iriola for 4 hectares
of his 800-hectare homestead. After 5 years, the sale was to
become absolute. Two years after the sale, Felices tried to
claim his land. Iriola wanted the 1.7k he paid back, + P300 for
the improvements he introduced.
Iriola cannot claim reimbursement for the improvements he
introduced. The sale is null and void, having been executed
within the 5-year prohibitive period. Iriola acted in bad faith.
Assuming arguendo that both of them knew of the illegality of
the contract, Felices already demanded the land back even
before Iriola introduced his improvements thereto. Thus, at
the time Iriola introduced such improvements, Felices could no
longer be regarded as having impliedly assented to the
introduction of the improvements, putting him in good faith.
Art. 449 applies. A builder in bad faith cannot recover
indemnity for what he has built on the land of another.
Sps. Tecson v. Sps. Nuguid (1993)
Pecson was the owner of a 256 sqm parcel of land which was
later sold by City Treasurer for non-payment of real estate
taxes. Notices of sale were sent to Pecson at his address in
Sampaloc, Manila and when no redemption was made, a Final
Bill of Sales was executed in favour of Mamerto Nepomuceno.
Nepomuceno then sold land to Spouses Nuguid for 104k.
After, Pecson then filed action to annul sale alleging that he
was notified because address where such was sent was wrong
– he lives in Kamias, QC already. Trial court upheld validity of
sale and CA affirmed.
The employees in charge of sending notice were not
blameworthy for relying on the available tax records.
Petitioner has nobody to blame but himself for as property
owner and school teacher, he should know that if an owner
fails to pay real estate taxes, said property will be sold at a
public auction. Worse, he introduced improvements thereon
without reporting the same for tax purposes. As to spouses
Nuguid, they are said to be buyers in good faith.
Sps. Tecson v. Sps. Nuguid (2005)
As earlier held, since Naguids opted to appropriate the
improvement for themselves as early as June 1993, when they
applied for a writ of execution despite knowledge that the
auction sale did not include the apartment building, they could
not benefit from the lot’s improvement, until they reimbursed
the improver in full, based on the current market value of the
property. The Spouses’ filing of writ of possession on both land
and building is clearly a violation of Pecson’s right of retention.
Spouses took advantage of the income of apartment. As such,
they should
Republic v. CA, 132 SCRA 514

Respondents seek to register under their name 3 lots adjacent

to their fishpond claiming that said pieces of land were
accretions to the dikes which fed their fishpond. The trial court
granted their petition however it was opposed by the
petitioner government. The petitioner submits that there is no
accretion to speak of under Article 457 of the New Civil Code
because what actually happened is that the private
respondents simply transferred their dikes further down the
river bed of the Meycauayan River, and thus, if there is
accretion at all, it is man-made and artificial and not the result
of the gradual and imperceptible sedimentation by the waters
of the river.

The Court grants the petition.

The elements of accretion are: (1) that the
deposit be gradual and imperceptible; (2)
that it be made through the effects of the
current of the water; and (3) that the land
where accretion takes place is adjacent to
the banks of rivers.
The requirement that the deposit should be
due to the effect of the current of the river
is indispensable. This excludes from Art.
457 all deposits caused by human
intervention. Alluvion must be the exclusive
work of nature. In the instant case, there is
no evidence whatsoever to prove that the
addition to the said property was made
gradually through the effects of the current
of the Meycauayan and Bocaue rivers.
When the private respondents transferred
their dikes towards the riverbed, the dikes
were meant for reclamation purposes and
not to protect their property from the
destructive force of the waters of the river.

• Grande v. CA, GR No. L-17652, June 30, 1962

• Baes v. CA, 224 SCRA 562
• Binalay v. Manalo, GR No. 92161