JACINTO DEL SAZ OROZCO and MARIA PAZ ALCANTARA vs. SALVADOR ARANETA, et al.

[November 21, 1951]

Eugenio del Saz Orozco died on February 7, 1922, leaving a will which he had executed on March 5, 1921, and was
afterwards duly admitted to probate 1. A clause of that will provided that certain properties should be given in life
usufruct to his son Jacinto del Saz Orozco, with the obligation on his part to preserve said properties in favor of the
other heirs who were declared the naked owners 2 thereof. Among these properties were 5,714 shares of stock of
the Benguet Consolidated Mining Company.

In 1934 and in 1939, the Benguet Consolidated Mining Company declared and distributed stock dividends out of its
surplus profits, the JACINTO receiving his proportionate portion of 11,428 shares and 17,142 shares, making a total of
28,570 shares.

ISSUE: W/N stock dividend is part of the capital which should be preserved in favor of the owners or an income of
fruits of the capital which should be given to and enjoyed by the life usufructuary as his own exclusive property.

CASE CITED: Matter of the Testate Estate of Emil Maurice Bachrach, which applied the PENNSYLVANIA RULE instead of the
MASSACHUSETTS RULE, ruled that 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 it were declared out of the capital it would be a serious violation of the law.

ARANETA: contend that while the doctrine in the aforesaid case effected a just and equitable distribution, the
application of it in the present case would cause an injustice, for "abstract propositions do not decide concrete
cases." ALSO, by the declaration of stock dividends, the voting power of the original shares of stock is considerably
diminished. If the stock dividends are not given to the remaindermen, the voting power of the latter would be greatly
impaired.

SC: We have not perceived any difference which would justify a reversal or modification of the doctrine in the
Bachrach case.

SC: Bearing in mind that the number of shares of stock of the Benguet Consolidated Mining company is so large, the
diminution of the voting power of the original shares of stock in this case cannot possibly affect or influence the
control of the policies of the corporation which is vested in the owners of the great block of shares. This would not be
a sufficient reason for modifying the doctrine of the Bachrach case. These remarks are made in answer to the
argument of the appellees in this particular case, but they do not imply that if the diminution of the voting power
were considerable the doctrine should be modified.

[With regard to the sum of P3,428.40 which is alleged to have been received by Jacinto from the Benguet Consolidated Mining Company, as a result of the
reduction of its capital in January 1926, it has not been proven that Jacinto has received said sum; on the contrary, it was denied by him as soon as he arrived in
the Philippines from Spain. There is no ground, therefore, for ordering the plaintiff to deliver such sum to the defendants.]

SC: REVERSED the judgment of the lower court. It is declared that the stock dividends amounting to 28,570 shares
belongs to Jacinto del Saz Orozco exclusively and in absolute ownership.

JOSEFA FABIE vs. JOSE GUTIERREZ DAVID of CFI-Manila, NGO BOO SOO and JUAN GREY [December 12, 1945]
1
PROBATE – is the process of proving and registering in the Supreme Court the last Will of a deceased person.
2
NAKED OWNERSHIP – refers to ownership where the right to use and the fruit has been denied.
Josefa Fabie is the usufructuary of the income of certain houses located at Santo Cristo, Binondo, and Ongpin, Santa
Cruz, Manila, as provided by the will 3 of the deceased Rosario Fabie.

The owner of the Santo Cristo property is Juan Grey. In a prior litigation between Josafa Fabie and Juan Grey, with
owners of the Ong Pin property as intervenors, involving the administration of the houses, it was stipulated that:

The rent for the properties have been collected: 1) at times by the respective owners of the properties, 2) at other
times by the usufructuary, 3) and lastly by the defendant Juan Grey as agent under a written agreement between the
owners of both properties and the usufructuary.

When the rents were collected by:

1) OWNERS – the net amounts thereof were duly paid to the usufructuary after the expenses for real estate taxes, repairs and insurance
premiums, including the documentary stamps, on the properties and the expenses of collecting the rents had been deducted, and certain
amount set aside as a reserve for contingent liabilities.
2) USUFRUCTUARY – she herself paid the expenses aforesaid.
3) JUAN GREY - the net amounts thereof were duly paid to the usufructuary, after deducting and setting aside the items aforesaid, monthly.

On October 1943,the usufructuary refused to continue with the agreement. Thus, the parties agreed that beginning
September 1944, the usufructuary shall collect all the rents of the both the Sto. Cristo and the Ongpin properties.

The USUFRUCTUARY shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including
the documentary stamps, and make all the necessary repairs on each of the properties, promptly when due or, in the case of repairs, when the
necessary, giving immediate, written notice to the owner or owners of the property concerned after making such payment or repairs.

In case of default on the part of the usufructuary, the RESPECTIVE OWNERS of the properties shall have the right to make the necessary
payment, including penalties and interest, on the taxes and special assessments, and the repairs and in that event the owner or owners shall
entitled to collect all subsequent rents of the property concerned until the amount paid by him or them and the expenses of collection are fully
covered thereby, after which the usufructuary shall again collect the rents in accordance herewith.

In June 1945, Josefa Fabie commenced an action of unlawful detainer against Ngo Soo. Ngo Soo offered to pay P300
monthly rent, payable in advance not later than the 5th of every month, beginning the month of April 1945, for the
Sto. Cristo property, including one door which Ngo Soo, without Josefa’s consent and contrary to their agreement,
had subleased to another Chinese.

Josefa refused because she badly needs the said house to live in, as her house in Pasay was burned by the Japanese
on the occasion of the entry of the American liberators in the City. Ngo Soo was duly notified on March 24 and April
14, 1945, to leave the said premises, but he refused. Thus, Josefa instituted a complaint for desahucio4 and for
unpaid rentals.

NGO SOO: contends that since 1908, he had been a tenant of the premises in question, which he was using and had
always used principally as a store and secondarily for living quarters. He was renting it from its owner and
administrator Juan Grey. Josefa is merely the usufructuary of the income therefrom, and by agreement between her
and said owner, her only right as usufructuary of the income is to receive the whole of such income. She has no right
or authority to eject tenants, such right being in the owner and administrator of the house, Juan Grey.

JUAN GREY: intervened in the unlawful detainer suit, alleging that he is the sole and absolute owner of the premises
in question. The only right recognized in favor of Josefa Fabie as usufructuary of the income of said premises is to
receive the rents therefrom when due. As usufructuary, she has no right nor authority to administer the said
premises nor to lease them nor to evict tenants, which right and authority are vested in the intervenor as owner.

MTC: Judgment was rendered in favor of JOSEFA, ordering Ngo Soo to vacate the premises and to pay the rents at the
rate of P137.50 a month, beginning April 1, 1945. The complaint in intervention was dismissed.

3
“I leave to my minor goddaughter in usufruct for life the rents of the estates in Santo Cristo St. and on Ongpin Street, as described in an OCT issued by the
Manila Title Registrar, and prohibit any alienation, foreclosure, exchange or transfer in any way.”
4
Complaint for EVICTION
CFI: dismissed the appeal for the reason that “the main issue is not a mere question of possession but precisely who
is entitled to administer the property subject matter of this case and who should be the tenant, and the conditions
of the lease. These issues were beyond the jurisdiction of the municipal court. This being case, the CFI as appellate
court is likewise without jurisdiction to take cognizance of the present case."

Josefa Fabie instituted an action to annul the order of the dismissal and to require CFI to try and decide the case on
the merits.

ISSUE: W/N the action instituted by Josefa in MTC is a purely possessory action(action of unlawful detainer 5) and
as such within the jurisdiction of said court, or an action founded on property right(action involving title) and
therefore beyond the jurisdiction of the municipal court.

WHO between Juan Grey and Josefa Fabie has the right to select the tenant and to fix the amount of rent?

SC: There is no dispute as to the title to or the respective interests of the parties in the property in question. The
naked title to the property is admittedly in Juan Grey, but the right to all the rents thereof, with the obligation to pay
the taxes and insurance premiums and make the necessary repairs, is vested in the usufructuary, Josefa Fabie, during
her lifetime. Therefore, the action is purely possessory and not one in any way involving the title to the property.

In determining whether an action of this kind is within the original jurisdiction of the MTC or CFI, the averments of
the complaint and the character of the relief sought are primarily to be consulted.

The Supreme Court held that the usufructuary has the right to administer the property in question. All the acts of
administration — to collect the rents for herself, and to conserve the property by making all necessary repairs and
paying all the taxes, special assessments, and insurance premiums thereon — were by the prior judgment of the CFI
vested in the usufructuary.

The pretension of Juan Grey that he is the administrator of the property with the right to choose the tenants and to
dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will, the
stipulation of the parties, and the judgment of the court. He cannot manage or administer the property after all the
acts of management and administration have been vested by the court, with his consent, in the usufructuary. As long
as the property is properly conserved and insured, he can have no cause for complaint, and his right in that regard is
fully protected by the terms of the stipulation and the judgment of the court above mentioned. To permit him to
arrogate to himself the privilege to choose the tenant, to dictate the conditions of the lease, and to sue when the
lessee fails to comply therewith, would be to place the usufructuary entirely at his mercy. It would place her in the
absurd situation of having a certain indisputable right without the power to protect, enforce, and fully enjoy it.

As a corollary to her right to all the rent, to choose the tenant, and to fix the amount of the rent, Josefa necessarily
has the right to choose herself as the tenant thereof, if she wishes to. As she fulfills her obligation to pay the taxes
and insure and conserve the property properly, the owner has no legitimate cause to complain.

SC: Upon the pleadings, the undisputed facts, and the law, the action instituted in the MTC by Josefa Fabie against
Ngo Soo is one of UNLAWFUL DETAINER, within the original jurisdiction of said court, and CFI erred in holding
otherwise and in quashing the case upon appeal.

AVELINO BALURAN vs. RICARDO NAVARRO, Judge CFI-Ilocos Norte, ANTONIO OBEDENCIO [September 30, 1977]

Spouses Domingo and Fidela Paraiso were the owners of a residential lot in Sarrat, Ilocos Norte. In 1964, the Paraisos
executed an agreement entitled "BARTER" whereby they agreed to "barter and exchange" with spouses Avelino and
5
UNLAWFUL DETAINER - a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such landlord, vendor vendee, or other person, may, at any time within one year after such unlawful
deprivation of withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or
depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with the damages and
costs."
Benilda Baluran their residential lot with the latter's unirrigated Riceland under the condition that both parties shall
enjoy the material possession of their respective properties, but in the event any of the children of Natividad
Obencio,(daughter of the Paraisos) shall choose to reside in this municipality and build his own house in the
residential lot, the Balurans shall be obliged to return the lot.

Neither parties may encumber, alienate or dispose of in any manner their respective properties as bartered without
the consent of the other. Inasmuch as the bartered properties are not yet accordance with Act No. 496 or under the
Spanish Mortgage Law, the deed shall be registered in the Office of the Register of Deeds of Ilocos Norte.

In 1975, Antonio Obendencio filed with CFI-Ilocos Norte the present complaint to recover the residential lot from
Avelino Baluran claiming that he is the rightful owner of said residential lot having acquired the same via donation
from his mother, Natividad Obedencio, and that he needed the property to build his house thereon. Obedencio
accordingly prayed that he be declared owner of the residential lot and that Baluran be ordered to vacate the same,
forfeiting in his favor the improvements Baluran had built in bad faith.

AVELINO BALURAN: alleged (1) that the "barter agreement" transferred to him the ownership of the residential lot in
exchange for the unirrigated riceland conveyed to plaintiff's Predecessor-in-interest, Natividad Obedencio, who in
fact is still in On thereof, and (2) that the plaintiff's cause of action if any had prescribed.

In the pre-trial, the parties agreed that the residential lot was donated on October 4, 1974 by Natividad Obedencio
to Antonio, and that since the execution of the agreement of February 2, 1964, Avelino Baluran was in possession
of the residential lot, paid the taxes of the property, and constructed a house thereon with an value of P250.00.

CFI: rendered judgment in favor of Antonio, and the Balurans are ordered to vacate the same with costs against
defendant.

ISSUE: W/N the barter agreement transferred ownership of the lot in suit to AVELINO BALURAN.

Contracts are not what the parties may see fit to call them but what they really are as determined by the principles of
law. In the instant case, the use of the term "barter" in describing the agreement is not controlling. The stipulations
indicate that there was no intention at all on the part of the signatories to convey the ownership of their
respective properties; all that was intended was to transfer the material possession thereof.

With the material possession being the only one transferred, all that the parties acquired was the right of usufruct
which in essence is the right to enjoy the Property of another. Spouses Paraiso would harvest the crop of the
unirrigated Riceland, while Avelino Baluran could build a house on the residential lot, subject to a resolutory
condition6, the happening of which would terminate the right of possession and use.

BALURAN: the causa of action of Obedencio had prescribed after the lapse of four years from the date of execution
of the document of February 2, 1964. Baluran contends that the remedy of Obedencio now was to ask for re-barter
of the properties subject of the agreement which could be exercised only within four years from the date of the
contract under Art. 1606 of the Civil Code.

The submission of petitioner is untenable. Art. 1606 of the Civil Code refers to conventional redemption which
Baluran would want to apply to the present situation. However, the agreement of the parties of February 2, 1964, is
not one of barter, exchange or even sale with right to repurchase, but is one of or akin the other is the use or
material ion or enjoyment of each other's real property.

Usufruct may be constituted by the parties for any period of time and under such conditions as they may deem
convenient and beneficial subject to the provisions of the Civil Code, Book II, Title VI on Usufruct. The manner of
terminating or extinguishing the right of usufruct is primarily determined by the stipulations of the parties which in
this case now before Us is the happening of the event agreed upon. Necessarily, Obedencio could not demand for
the recovery of possession of the residential lot in question, not until he acquired that right from his mother,
6
A resolutory condition is one which extinguishes rights and obligations already existing.
Natividad Obedencio, and which he did acquire when his mother donated to him the residential lot on October 4,
1974. Even if We were to go along with petitioner in his argument that the fulfillment of the condition cannot be left
to an indefinite, uncertain period, nonetheless, in the case at bar, the respondent, in whose favor the resolutory
condition was constituted, took immediate steps to terminate the right of petitioner herein to the use of the lot.
Obedencio's present complaint was filed in May of 1975, barely several months after the property was donated to
him.

HOWEVER, under Art. 579 of the Civil Code, Baluran will not forfeit the improvement he built on the lot but may
remove the same without causing damage to the property.

Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or
expenses for mere pleasure as he may deem proper, provided he does not alter its form or
substance; but he shall have no right to be indemnified He may, however, remove such
improvements, should it be possible to do so without damage to the property.

The "barter agreement" of February 2, 1964, did not transfer the ownership of the respective properties mentioned
therein, it follows that Baluran remains the owner of the unirrigated riceland and is now entitled to its Possession.
With the happening of the resolutory condition provided for in the agreement, the right of usufruct of the parties is
extinguished and each is entitled to a return of his property.

Natividad Obedencio who is now in possession of the property and who has not been made a party to this case
cannot be ordered in this proceeding to surrender the Riceland, but inasmuch as reciprocal rights and obligations
have arisen between the parties to the so-called "barter agreement", the parties and their successors-in-interest are
duty bound to effect a simultaneous transfer of the respective properties if substance at justice is to be effected.

SC: Judgment is hereby rendered: 1) declaring Avelino Baluran and Antonio Obedencio the respective owners the
unirrigated riceland and residential lot mentioned in the "Barter Agreement" of February 2, 1964; 2) ordering Avelino
Baluran to vacate the residential lot and removed improvements built by thereon, provided that he shall not be
compelled to do so unless the unirrigated riceland shall five been restored to his possession either on volition of the
party concerned or through judicial proceedings which he may institute for the purpose.

JESUS GABOYA vs. ANTONIO MA. CUI, et al. [March 27, 1971]

Don Mariano Cui as owner of THREE LOTS in Cebu city sold the said lots to three of his children named Rosario de
Encarnacion, Mercedes de Ramas and Antonio Ma. Cui, pro indiviso for the sum of P64,000. Because Rosario’s lack
of funds, she was unable to pay her corresponding share of the purchase price. The sale to her was cancelled and 1/3
of the property corresponding to her was returned to Don Mariano. Thus, Don Mariano and his children Mercedes
and Antonio became co-owners of the whole mass in equal portions. In the deed of sale7, Don Mariano retained for
himself the usufruct of the property. Subsequently, a building was erected on a portion of this mass facing Calderon
St. and was occupied by a Chinese businessman for which he paid Don Mariano P600/month as rental.

Sometime after the sale to Mercedes and Antonio, the two applied to the Rehabilitation Finance Corporation for a
loan of P130,000 with which to construct a 12-door commercial building presumably on a portion of the entire
parcel corresponding to their share. In order to facilitate the granting of the loan and inasmuch as only two of the
three co-owners applied for the loan, Don Mariano executed an authority to mortgage 8 authorizing his two children
co-owners to mortgage his share.

The loan was eventually granted and was secured by a mortgage on the three lots in question. Don Mariano did not
however, join in the construction of the 12-door commercial building as may be gathered from the "Convenio de
Asignacion de Parte', wherein it was agreed among the three co-owners to assign to Don Mariano that one-third of
the whole mass facing Calderon street and on which was erected the building already referred to as being occupied
by a Chinese businessman and for which he was paying Don Mariano P600 a month rental.

The 12-door commercial building was eventually constructed and Mercedes and Antonio received and continued
to receive the rents thereof amounting to P4,800 a month and paying the installments due for payment on the loan
to the Rehabilitation Finance Corporation.

On March 25, 1948, two other children of Don Mariano named Jesus and Jorge brought an action in CFI-Cebu for
annulling the deed of sale of the three lots on the ground that they belonged to the conjugal partnership of Don
Mariano and his deceased wife Antonia Perales. [Court found the three lots were not conjugal property]

On March 19, 1949, Rosario Encarnacion filed a petition to declare her father incompetent and to have a guardian
appointed for his property in the CFI-Cebu. The petition was granted and Don Mariano was declared incompetent.
Victorino Reynes was appointed guardian of his property. Reynes filed a motion in the guardianship proceedings
seeking authority to collect the rentals from the three lots in question and asking the Court to order Antonio and
Mercedes to deliver to him as guardian all the rentals they had previously collected from the 12-door commercial
building.

CFI: denied the motion which sought to collect the rentals from the 12-door commercial building. [P126,344.91] The
court held that the reserved right of usufruct in favor of the vendor did not include, nor was it intended to include,
the rentals of the building subsequently constructed on the vacant lots, but it did entitle the usufructuary to receive a
reasonable rental for the portion of the land occupied by the building

REYNES: usufructuary right reserved in favor of Don Mariano Cui extends to and includes the rentals of the building
constructed by Antonio Cui and Mercedes Cui on the land sold to them by their father. The usufructuary rights of the
vendor were of the essence of the sale, and their violation entitled him to rescind (or resolve) the sale. It prayed
either for rescission with accounting, or for delivery of the rentals of the building with interests.

ANTONIO & MERCEDES: denied that the usufructuary rights extended to the said rentals, or that such usufruct was
of the essence of the sale. Don Mariano Cui had waived and renounced the usufruct and the defendants-vendees
gave the vendor P400.00 a month by way of aid.

ISSUE: W/N the usufruct reserved by Don Mariano Cui in the deed of sale over the lots in question, that were at
the time vacant and unoccupied, gave the usufructuary the right to receive the rentals of the commercial building
constructed by the vendees.

7
"...do hereby sell, transfer, and convey to Rosario, Mercedes and Antonio, the above-mentioned parcel of land in equal parts…and the further consideration,
that I, shall enjoy the fruits and rents of the same, as long as my natural life shall last. Granting and conveying unto the said buyers the full rights as owners to
enjoy the constructive possession of the same, improve, construct and erect a building in the lot, or do whatever they believe to be proper and wise, ..."

8
“I hereby agree, consent permit and authorize my said co-owners to mortgage, pledge my share so that they may be able to construct a house or building in the
said property, provided however, that the rents of the said land shall not be impaired and will always be received by me."
If the usufruct extended to the building, W/N the failure of the vendees to pay over its rentals to the usufructuary
entitled the latter to rescind, or more properly, resolve the contract of sale.

SC: NO. The terms of the 1946 deed of sale of the vacant lots and the reserved usufruct of the said lot in favor of the
vendor, as amplified by the deed authorizing Mercedes and Antonio Cui to borrow money, clearly prove that the
reserved usufruct in favor of the vendor, Mariano Cui, was limited to the rentals of the land alone. Had it been
designed to include also the rents of the buildings intended to be raised on the land, an express provision would have
been included to the effect, since in both documents, the possibility of such construction was clearly envisaged and
mentioned.

APPELLANTS: Under Art. 571, “The usufructuary shall have the right to enjoy any increase which the thing in usufruct
may acquire through accession, the servitudes established in its favor, and, in general, all the benefits inherent
therein” inasmuch as the building constructed by appellees was an accession to the land.

SC: Under the Articles of the Civil Code on industrial accession, such accession is limited either to buildings erected
on the land of another, or buildings constructed by the owner of the land with materials owned by someone else.

Nowhere in these articles on industrial accession is there any mention of the case of landowner building on his
own land with materials owned by himself (which is the case of appellees Mercedes and Antonio Cui). The reason
for the omission is readily apparent: recourse to the rules of accession are totally unnecessary and inappropriate
where the ownership of land and of the, materials used to build thereon are concentrated on one and the same
person. Even if the law did not provide for accession the land-owner would necessarily own the building, because he
has paid for the materials and labor used in constructing it.

The author that specifically analyses the situation of the usufructuary vis-a-vis constructions made by the landowner
with his own materials is Scaevola. Scaevola's opinion is entirely in harmony with Article 595 of the Civil Code of the
Philippines, prescribing that, “The owner may construct any works and make any improvements of which the
immovable usufruct is susceptible, or make new plantings thereon if it be rural, provided that such acts do not
cause a diminution in the value of the usufruct or prejudice the right of the usufructuary.”

NOTE: If the income from constructions made by the owner during the existence of the usufruct should be held to
accrue automatically to the usufructuary under Article 571, such improvements could not diminish the value of the
usufruct nor prejudice the right of the usufructuary. The qualifications by Article 595 on the owner's right to build
would be redundant. The limitations set by Article 595 to the construction rights of the naked owner of the land are
evidently premised upon the fact that such constructions would necessarily reduce the area of the land under
usufruct, for which the latter should be indemnified. This is precisely what the court a quo has done in sentencing the
appellee owners of the building to pay to the usufructuary a monthly rent of P1,758.00 for the area occupied by
their building, after mature consideration of the rental values of lands in the neighborhood.

SC: We agree with the trial court that there was no adequate proof that Don Mariano ever renounced his usufruct.
The alleged waiver was purely verbal, and is supported solely by the testimony of Antonio Cui. As a gratuitous
renunciation of a real right over immovable property that as created by public document, the least to be expected in
the regular course of business is that the waiver should also appear in writing.

The alleged breach of contract by the appellees Antonio and Mercedes Cui could only consist in their failure to pay to
the usufructuary the rental value of the area occupied by the building constructed by them. But as the rental value in
question had not been ascertained or fixed either by the parties or the court, nor had Don Mariano Cui, or anyone
else in his behalf, made any previous demand for its payment, the default cannot be exclusively blamed upon the
defendants-appellees. Hence, the breach is not it "so substantial and fundamental as to defeat the object of the
parties in making the agreement" as to justify the radical remedy of rescission.

ROSARIO GREY VDA. DE ALBAR and JOSE GREY vs. JOSEFA FABIE DE CARANGDANG [December 29, 1959]
Doña Rosario Fabie was the owner of a lot in Ongpin, Manila, with a building and improvements thereon erected, as
evidenced by an OCT. By a will9 left by her upon her death, she devised the naked ownership of the whole property
to Rosario Grey Vda. de Albar, and its usufruct to Josefa Fabie for life. An encumbrance was noted on the title
prohibiting the usufructuary from selling, mortgaging or transferring her right to usufruct during her minority.

During liberation, the building on the Ongpin lot was burned, leaving only the walls and other improvements that
were not destroyed by the fire.

One Au Pit (Chinese): offered to lease the property for a period of five years, with a monthly rental of P500, and
agreeing to construct on the lot a new building worth P30,000, provided the naked owners and the usufructuary sign
the agreement of the lease.
JOSEFA: maintains that she has the exclusive right to cede the property by lease and to receive the full rental value by
virtue of her right to usufruct.
ROSARIO: maintains that the right of usufruct was extinguished when the building was destroyed, the right of the
usufructory being limited to the legal interest on the value of the lot and the materials.

In order that the agreement of lease may be affected, the parties agreed on a TEMPORARY COMPROMISE. The naked
owners would receive P100, or 20% of the monthly rental; the usufructuary would receive P400, or 80%. It was
likewise stipulated in the agreement that the title to the building to be constructed would accrue to the land upon
its completion as an integral part of the lot covered by the TCT issued in the name of the naked owners but subject
to the right of usufruct of Josefa Fabie. The parties expressly reserved the right to litigate their respective claims
after the termination of the contract of lease to determine which of said claims was legally correct.

By reason of the destruction of the building on the Ongpin property, the US War Damage Commission approved the
claim that was presented for the damage caused to the property in the amount of P8,574, which was paid to and
received by the naked owners. In the meantime, the usufructuary paid the real estate taxes due on the property at
Ongpin for the years 1945 to 1952 in the total amount of P1,989.27, as well as the real estate taxes for the years
1953 and 1954 in the annual sum of P295.80.

On October 2, 1952, Rosario Grey Vda. de Albar commenced the present action to settle the dispute and conflicting
views entertained by the parties in line with their agreement and prayed that judgment be rendered declaring that
the usufruct in favor of Josefa Fabie is now only limited to receiving the legal interest on the value of the land, and
that her right to receive any rental under the contract entered into between the parties has already ceased.

CFI: rendered judgment in favor of JOSEFA and held that her life-long usufruct continues on the property in Ongpin
with the exclusive right to receive all of its income during her lifetime, without the claimants having the right to join
in the administration of said farm. ALSO, she has the right to receive 6% of the amount of P8,574.00 received as
compensation for war, and reimbursement of the sum of P1,989.27 as compensation payments.

CA: affirmed the decision of the CFI in so far it holds that JOSEFA’s right of life usufruct subsists and is in full force
and effect upon the Ongpin lot and the building now existing thereon and that JOSEFA is entitled to receive the legal
interest of 6% interest per annum of the amount of P3,272.00 from the time it was actually received from the
Philippine War Damage Commission. HOWEVER, CA reversed the decision declaring that reimbursement to appellee
of the sum of P1,987.27 paid by her for real estate taxes. Such is deferred until the termination of the usufruct.

ROSARIO: contend that this provision of the will should be interpreted as constituting only a life usufruct on the
rentals of the buildings erected on the lands and that once these buildings are destroyed the usufruct is extinguished.

JOSEFA: contends that the provision should be interpreted as constituting a life usufruct both on the buildings and
the lands because the former cannot be separated from the latter.

ISSUE: W/N JOSEFA’s life usufruct on the rentals was extinguished when the buildings thereon was destroyed.

9
“I leave to my minor goddaughter in usufruct for life the rents of the estates Ongpin Street, as described in an OCT issued by the Manila Title Registrar, and
prohibit any alienation, foreclosure, exchange or transfer in any way.”
SC: NO. When the deceased constituted the life usufruct on the rentals "fincas situadas 10" in Ongpin and Sto. Cristo
streets, she meant to impose the encumbrance both the building and the land on which it is erected for indeed the
building cannot exist without the land. "The land, being an indispensable part of the rented premises cannot be
considered as having no rental value whatsoever.” Since only the building was destroyed and the usufruct is
constituted not only on the building but on the land as well, then the usufruct is not deemed extinguished by the
destruction of the building for under the law usufruct is extinguished only by the total loss of the thing subject of
the encumbrance (Article 603, old Civil Code).

This case comes under Article 517 of the same Code which provides: "if the usufruct is constituted on immovable
property of which a building forms part, and the latter should be destroyed in any manner whatsoever, the
usufructuary shall have a right to make use of the land and materials." This is a temporary measure calculated to
maintain the usufruct alive until the very thing that has been destroyed be reconstructed or replaced.

RATIONALE: Since the usufruct has not been extinguished by the destruction of the building and the usufruct is for
life as in this case, it is but fair that the usufructuary continue to enjoy the use of the land and the materials that they
may be constructed on the land. To hold otherwise would be to affirm that the usufruct has been extinguished.

In the instant case, One Au pit was to lease the land for five years and would construct thereon a building worth
P30,000, upon the condition that upon its completion the building would become an integral part of the land in
which it is erected. Thus, its naked ownership should belong to petitioners and its beneficial ownership to
respondent. This fits into the purpose contemplated in Article 517.

SC: the Court of Appeals did not err in finding that appellee's right of usufruct subsists and is in full force and effect
upon the Ongpin lot and the building existing thereon, affirming the decision of the trial court.

SC: Majority believe that 6% interest per annum of such war damage payment should be paid to respondent from
the time it was actually received to the end of the life of the usufruct because it has not been used in the
construction. The naked owners may turn over the money to the usufructuary so that she may use it during her
lifetime, subject to its return to them after her death if they desire to be relived of this encumbrance.

SC: HOWEVER, the real estate taxes paid by JOSEFA in her capacity as usufractuary should be paid by her, as she did,
instead of by petitioners not only because she bound herself to pay such taxes in a formal agreement approved by
the court in a prior Civil Case [Fabie v. Gutierrez]. In the case, the parties submitted an amicable agreement which
was approved by the court wherein JOSEFA bound herself to pay all the real estate taxes, special assessment and
insurance premiums, and make all the necessary repairs on each of the properties covered by the usufruct. There is
therefore no valid reason why petitioners should now be ordered to reimburse respondent for all the real taxes she
had paid on the property. In this respect, the decision of the Court of Appeals should be modified.

Petitioners should not be made to reimburse the real estate taxes paid by JOSEFA.

TEOFILO ALOLINO v. FORTUNATO FLORES AND ANASTACIA MARIE FLORES [April 04, 2016]

10
“farms located”; FINCAS include not only buildings but land as well.
Teofilo Alolino is the registered owner of two contiguous parcels of land in Taguig, covered by two TCTs.
Alolino initially constructed a bungalow-type house on the property. In 1980, he added a second floor to the
structure. He also extended his two-storey house up to the edge of his property.

In 1994, the sps. Fortunato and Anastacia Flores constructed their house/ sari sari store on the vacant
municipal/barrio road immediately adjoining the rear perimeter wall of Alolino's house. Since they were constructing
on a municipal road, the respondents could not secure a building permit. The structure is only about 2-3 inches away
from the back of Alolino's house, covering five windows and the exit door.

Alolino demanded that the respondent spouses remove their structure but the latter refused. Thus, he complained
about the illegal construction to the Building Official of the Municipality of Taguig and filed a complaint with the
Barangay. The Building Official issued a Notice of Illegal Construction against the respondents directing them to stop
further construction.

In 2001 or 2002, the respondents began constructing a second floor to their structure, again without securing a
building permit. This floor was to serve as residence for their daughter, Maria Teresa Sison. The construction
prompted Alolino to file another complaint with the Building Official of Taguig.

The building official issued a second Notice of Illegal Construction against the respondents on May 6, 2002, directing
the respondents to desist from their illegal construction. The respondents did not comply with the directive from
the building official.

In 2003, Alolino filed a complaint against the respondents with the RTC praying for: (1) the removal of the
encroaching structure; (2) the enforcement of his right to easement of light and view; and (3) the payment of
damages. Alolino claimed that the respondents' encroaching structure deprived him of his light and view and
obstructed the air ventilation inside his house.

RTC: rendered a judgment ordering the respondents to remove their illegal structure obstructing Alolino's right to
light and view. RTC found that Alolino had already previously acquired an easement of light and view and that the
respondents subsequently blocked this easement with their construction. It held that the respondents' illegal
construction was a private nuisance with respect to Alolino because it prevented him from using the back portion of
his property and obstructed his free passage to the barrio/municipal road. The court farther held that the
respondents' house was a public nuisance, having been illegally constructed on a barrio road - a government
property - without a building permit.

CA: reversed the RTC decision and dismissed the complaint for lack of merit. The CA held (1) that Alolino had not
acquired an easement of light and view because he never gave a formal prohibition against the respondents pursuant
to Article 668 of the Civil Code; (2) that Alolino was also at fault, having built his house up to the edge of the
property line in violation of the National Building Code; (3) that Alolino had not acquired an easement of right of way
to the barrio Road; and (4) that the respondents' house was not a public nuisance because it did not endanger the
safety of its immediate surroundings. ALSO, the Government had already abandoned the barrio road pursuant to the
2004 Sanggunian resolution.

ALOLINO: insists (1) that he acquired an easement of light and view by virtue of a title because the respondents
constructed their house on a barrio road; (2) that the provision of Sec. 708 of the National Building Code and Article
670 of the Civil Code prescribing the setbacks is inapplicable because the property is adjacent to a barrio road; (3)
that he has a right of way over the lot occupied by the respondents because it is a barrio road; and (4) that the
respondents' house/sari sari store is a nuisance per se.

FLORES: counters (1) that Alolino has not acquired an easement of light and view or an easement of right of way, by
either prescription or title; (2) that Alolino is at fault for constructing his house up to the edge of his property line
without observing the setbacks required in Article 670 of the Civil Code and Section 702 of the National Building
Code; and (3) that their house/sari sari store is not a nuisance because it is not a serious threat to public safety and
the Sanggunian has already reclassified the lot as residential.

ISSUE: W/N Alolino has acquired an easement of light and view or an easement of right of way.
SC: NO. There is no dispute that respondents built their house/sari sari store on government property.
The barrio road adjacent to Alolino's house is property of public dominion devoted to public use. There is no merit in
the respondents' contention that the Local Government of Taguig had already withdrawn the subject barrio road
from public use and reclassified it as a residential lot. To convert a barrio road into patrimonial property, the law
requires the LGU to enact an ordinance, approved by at least 2/3 of the Sanggunian members, permanently closing
the road. In this case, the Sanggunian did not enact an ordinance but merely passed a resolution. The Sanggunian's
failure to comply with Section 21 of the LGC renders ineffective its reclassification of the barrio road. As a barrio road,
the lot's purpose is to serve the benefit of the collective citizenry. It is outside the commerce of man 11

An EASEMENT is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a
different owner or for the benefit of a community, or of one or more persons to whom the encumbered estate does
not belong. Continuous and apparent easements may be acquired by virtue of a title or by prescription of ten
years. Meanwhile, continuous but non-apparent easements and discontinuous ones can only be acquired by virtue
of a title. Used in this sense, title refers to a juridical justification for the acquisition of a right. It may refer to a law, a
will, a donation, or a contract.

An easement of a right of way is discontinuous and cannot be acquired through prescription. On the other hand, an
easement of light and view can be acquired through prescription counting from the time when the owner of the
dominant estate formally prohibits the adjoining lot owner from blocking the view of a window located within the
dominant estate. Notably, Alolino had not made (a formal prohibition upon the respondents prior to their
construction in 1994. Alolino could not have acquired an easement of light and view through prescription. Thus, only
easements created by law can burden the respondents' property. However, none of these provisions are applicable
to Alolino's property with respect to the barrio road where the respondents' house stands on.

From the foregoing, Alolino does not have an easement of light and view or an easement of right of way over the
respondents' property or the barrio road it stands on. This does not mean, however, that the respondents are
entitled to continue occupying the barrio road and blocking the rear of Alolino's house. Every building is subject to
the easement which prohibits the proprietor or possessor from committing nuisance. Under Article 69412 of the
Civil Code, the respondents' house is evidently a nuisance.

A barrio road is designated for the use of the general public who are entitled to free and unobstructed passage
thereon. Permanent obstructions on these roads, such as the respondents' illegally constructed house, are injurious
to public welfare and convenience. The occupation and use of private individuals of public places devoted to public
use constitute public and private nuisances and nuisance per se.

The CA clearly erred when it invoked Section 28 of the Urban Development and Housing Act as a ground to deny the
demolition of respondents' illegal structure. The invoked provision itself allows the demolition of illegal structures on
public roads and sidewalks because these nuisances are injurious to public welfare. Evidently, the respondents have
no right to maintain their occupation and permanent obstruction of the barrio road. The interests of the few do not
outweigh the greater interest of public health, public safety, good order, and general welfare.

SC: decision of the CA is REVERSED.

HELEN CALIMOSO, MARILYN CALIMOSO and LIBY CALIMOSO vs. AXEL ROULLO [January 25, 2016]

11
(1) it is not alienable or disposable;
(2) it is not subject to registration under Presidential Decree No. 1529 and cannot be the subject of a Torrens title;
(3) it is not susceptible to prescription;
(4) it cannot be leased, sold, or otherwise be the object of a contract;
(5) it is not subject to attachment and execution; and
(6) it cannot be burdened by any voluntary easements.

12
Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:
(1) Injures or endangers the health or safety of others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or
(5) Hinders or impairs the use of property,
ALEX ROULLO is the owner of a lot in Iloilo City. In his Complaint for Easement of Right of Way, Roullo alleged that his
lot is isolated by several surrounding estates, including the lot owned by petitioners Helen, Marilyn, and Liby
Calimoso. He needs a right-of-way in order to have access to a public road, and that the shortest and most
convenient access to the nearest public road, Fajardo Subdivision Road, passes through the petitioners’ lot.

CALIMOSOS: objected to the establishment of the easement. Petitioners argue that while the establishment of the
easement through their lot provided for the shortest route, it would cause substantial damage to the two houses
already standing on their property. They alleged that the respondent has other right-of-way alternatives.

RTC: granted the respondent’s complaint and ordered the petitioners to provide the respondent an easement of right-of-way
"measuring 14 meters in length and 3 meters in width (42 square meters, more or less) over Lot 1454-B-25, specifically at
the portion adjoining the bank of Sipac Creek." Accordingly, the RTC ordered the respondent to pay the petitioners proper
indemnity in the amount of "Php1,500 per square meter of the portion of the lot subject of the easement."

CA: affirmed the RTC’s decision and held that all the requisites for the establishment of a legal or compulsory easement of right-
of-way were present in the respondent’s case. The CA held that the establishment of the easement through the petitioners’ lot
was more practical, economical, and less burdensome to the parties.

ISSUE: W/N the respondent has met all the requisites for the establishment of a legal easement of right-of-way on
the lot owned by the petitioners

SC: NO. Not all the requisites for the valid establishment of an easement of right-of-way are present in this case.

REQUISITES to be entitled to an easement of right-of-way: [SPIP]

1. The dominant estate is surrounded by other immovables and has no adequate outlet to a public highway;
2. There is payment of proper indemnity;
3. The isolation is not due to the acts of the proprietor of the dominant estate; and
4. The right-of-way claimed is at the point least prejudicial to the servient estate; and insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest."

That the respondent’s lot is surrounded by several estates and has no access to a public road are undisputed. The
only question before this Court is whether the right-of- way passing through the petitioners’ lot satisfies the fourth
requirement of being established at the point least prejudicial to the servient estate.

Three options were then available to the respondent for the demanded right-of-way: the first option is to traverse
directly through the petitioners’ property (14 meters from respondent’s lot to the Fajardo Subdivision Road);
the second option is to pass through two vacant lots on the southwest portion of the respondent’s lot ( 43 meters to
another public highway, the Diversion Road); and the third option is to construct a concrete bridge over Sipac Creek
and ask for a right-of-way on the property of a certain Mr. Basa in order to reach the Fajardo Subdivision Road.

Article 650 of the Civil Code provides that the easement of right-of-way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant
estate to a public highway may be the shortest. Under this guideline, whenever there are several tenements
surrounding the dominant estate, the right-of-way must be established on the tenement where the distance to the
public road or highway is shortest and where the least damage would be caused. If these two criteria (shortest
distance and least damage) do not concur in a single tenement, the least prejudice criterion must prevail over the
shortest distance criterion.

In this case, the establishment of a right-of-way through the petitioners’ lot would cause the destruction of the wire
fence and a house on the petitioners’ property. Although this right-of-way has the shortest distance to a public
road, it is not the least prejudicial considering the destruction pointed out, and that an option to traverse two
vacant lots without causing any damage, albeit longer, is available.

We have held that "mere convenience for the dominant estate is not what is required by law as the basis of setting
up a compulsory easement;" that "a longer way may be adopted to avoid injury to the servient estate, such as when
there are constructions or walls which can be avoided by a round-about way."
LIWAYWAY ANDRES, RONNIE ANDRES, and PABLO FRANCISCO v. STA. LUCIA REALTY & DEVELOPMENT,
INCORPORATED [August 24, 2015]

In 2000, petitioners filed a Complaint for Easement of Right-of-Way against Sta. Lucia Realty & Development before
the RTC. They alleged that they are co-owners and possessors for more than 50 years of three parcels of
unregistered agricultural land in Rizal. Sta. Lucia Realty acquired the lands surrounding the subject property,
developed the same into a residential subdivision known as the Binangonan Metropolis East, and built a concrete
perimeter fence around it such that petitioners were denied access to the nearest public road. They prayed for a
right-of-way within Binangonan Metropolis East for them to have access to Col. Guido Street, a public road.

STA. LUCIA REALTY: denied knowledge of any property adjoining its subdivision owned by petitioners. At any rate, it
pointed out that petitioners failed to sufficiently allege in their complaint the existence of the requisites for the grant
of an easement of right-of-way.

PETITIONERS: argue that they are entitled to demand an easement of right-of-way from Sta. Lucia Realty because
they are the owners of the subject property intended to be the dominant estate. They contend that they have
already acquired ownership of the subject property through ordinary acquisitive prescription. This is considering
that their possession became adverse as against Juanito Blanco (under whose names the subject property is declared
for taxation) when Carlos formally registered his claim of ownership with the DENR and sought to declare the subject
property for taxation purposes in 1998. Since more than 10 years had lapsed from that time without the Blancos
doing anything to contest their continued possession of the subject property, petitioners aver that ordinary
acquisitive prescription had already set in their favor and against the Blancos.

HOWEVER, the subject property is still not registered under the Land Registration Act since no tax declaration over
the same has been issued to petitioners despite application with the Municipal Assessor of Binangonan. When
required by the court to submit documents regarding the said application, Pablo attached in his Compliance Carlos'
letter to the Municipal Assessor of Binangonan requesting for the issuance of a tax declaration and the reply
thereto of the Provincial Assessor of Rizal. In the aforesaid reply, the Provincial Assessor denied the request on the
ground that the subject property was already declared for taxation purposes under the name of Juan Diaz and later,
in the name of Juanito Blanco.

RTC: rendered its decision in favor of PETITIONERS. The RTC held that based on Article 1137 of the Civil Code,
petitioners are considered owners of the subject property through extraordinary prescription. Having real right over
the same, they are entitled to demand an easement of right-of-way under Article 649 of the Civil Code. The RTC
further held that Pablo's testimony sufficiently established: (1) that the subject property was surrounded by
respondent's property; (2) the area and location of the right-of-way sought; (3) the value of the land on which the
right-of-way is to be constituted which was P600 per square meter; and (4) petitioners and Liza's possession of the
subject property up to the present time. Thus, it ordered Sta. Lucia to grant the right of way to the plaintiffs upon
payment of an indemnity equivalent to the market value of the 50-square meter right of way.

STA. LUCIA: argued that petitioners were neither able to prove that they were owners nor that they have any real
right over the subject property intended to be the dominant estate. They likewise failed to establish that the only
route available from their property to Col. Guido Street is through respondent's subdivision.

CA: reversed the decision of the RTC. The CA held that the evidence adduced by petitioners failed to sufficiently
establish their asserted ownership and possession of the subject property. Moreover, respondent in fact denied in
the allegation of petitioners that they have been in possession of subject property for more than 50 years. In view of
these, petitioners have no right to demand an easement of right-of-way from respondent.

ISSUE: W/N petitioners are entitled to demand an easement of right-of-way from respondent.

SC: NO. Under Article 649 of the Civil Code, an easement of right-of-way may be demanded by the owner of an
immovable or by any person who by virtue of a real right may cultivate or use the same.
Before the RTC, petitioners based their claim of ownership on extraordinary acquisitive prescription 13 under Article
1137 of the Civil Code. Also with the CA, petitioners initially asserted ownership through extraordinary acquisitive
prescription. It was only later in their Motion for Reconsideration therein that they averred that their ownership
could also be based on ordinary acquisitive prescription 14. Even if timely raised, such argument of petitioners, as
well as with respect to extraordinary acquisitive prescription, fails.

Only lands of the public domain, subsequently classified or declared as “no longer intended for public use or for
the development of national wealth,” or removed from the sphere of public dominion and are considered
converted into patrimonial lands or lands of private ownership, may be alienated or disposed through any of the
modes of acquiring ownership under the Civil Code. If the mode of acquisition is prescription, whether ordinary or
extraordinary, it must first be shown that the land has already been converted to private ownership prior to the
requisite acquisitive prescriptive period. Otherwise, Article 1113 of the Civil Code, which provides that property of
the State not patrimonial in character shall not be the subject of prescription, applies.

It appears that the subject property is an unregistered public agricultural land. Being a land of the public domain,
petitioners, in order to validly claim acquisition thereof through prescription, must first be able to show that the
State has expressly declared through either a law enacted by Congress or a proclamation issued by the President that
the subject [property] is no longer retained for public service or the development of the national wealth or that the
property has been converted into patrimonial.

Consequently, without an express declaration by the State, the land remains to be a property of public dominion
and hence, not susceptible to acquisition by virtue of prescription. In the absence of such proof of declaration in
this case, petitioners' claim of ownership over the subject property based on prescription necessarily crumbles.
Conversely, they cannot demand an easement of right-of-way from respondent for LACK OF PERSONALITY.

SC: ordered the dismissal of petitioners' Complaint for Easement of Right-of-Way against respondent.

13
EXTRAORDINARY PRESCRIPTION – acquired through uninterrupted adverse possession for 30 years without need of title or of good faith
14
ORDINARY PRESCRIPTION – requires possession in good faith and just title for 10 years.
FE VELASCO, represented by ALFREDO GONZALES vs. VICENTE CUSI, JR. and THE CITY OF DAVAO [July 20, 1981]

FE VELASCO bought Lot 77-B-2 in 1956, which was originally a portion of Lot No. 77, covered by an OCT issued on
July 21, 1911. When Velasco bought the subject lot, Bolton Street was already existing. Without ascertaining the
monuments along Bolton Street, she had her house constructed on said lot and built a fence along Bolton Street,
which she believed to be the boundary between her lot and said street and in line with other fences already existing
when she bought said lot.

After a relocation of the monuments of her lot, Velasco discovered that Bolton Street has encroached upon her lot by
at least 25 sq.m. Since the City of Davao is now asphalting Bolton Street, Velasco filed with the CFI of Davao the
present Action to Quiet Title15 because the continued occupation of said portion by the City of Davao has cast a cloud
of doubt on the title of Velasco, valued at P400 per square meters.

CITY OF DAVAO: filed a motion to dismiss on the ground that the complaint states no cause of action.

CFI: dismissed the case. The court held that the action is to quiet title and damages, but the complaint does not
allege any cloud or doubt on the title, TCT of Velasco to Lot No. 77-B-2. The allegations in the complaint that “Bolton
Street encroached on the questioned lot and the City of Davao had continuously occupied the portion so encroached
upon” do not cast a cloud of doubt on the title of the plaintiff over said portion which would justify this action.
Further, the court held that Bolton Street as an easement must remain a burden on the lot in question, pursuant to
Sec. 39 of Act 496 on the ground that it is subject to easement of Public Highway.

ISSUE: W/N the lot in question is subject to easement of public highway.

SC: affirmed the decision of the lower court and held that the complaint states no cause of action upon which to
render judgment in favor of petitioner. Bolton Street has been where it is from time immemorial. When the mother
title of petitioner's TCT was issued in 1911, it was issued subject to the provisions of Section 3916 of Act 496.

Bolton Street, which is a public highway already subsisting when OCT No. 638 was issued, is deemed to have attached
as a legal encumbrance to the lot originally registered as Lot No. 77, notwithstanding the lack of an annotation
thereof on OCT no. 638. Thus, pursuant to Section 39 of Act 496, petitioner's Lot No. 77-B-2, which was originally a
part of Lot No. 77, must have to remain subject to the same legal encumbrance of a public highway.

Bolton Street cannot be a discontinuous easement as VELASCO claims it to be, which may not be acquired by
prescription. Nonetheless, whether the mode of acquisition of the easement that Bolton Street would be only by
virtue of title, this is not material or of any consequence in the present proceedings.

It remained as such legal encumbrance, as effectively as if it had been duly noted on the certificate of title, by virtue
of the clear and express provision of Section 39 of Act 496, it being admitted that at the time of the registration of
Lot 77, the public highway was already in existence or subsisting. This fact erases whatever cause of action
petitioner may have to bring the complaint she filed in the court a quo for quieting of title on a portion of the
street which she claims to be part of her lot, free from encumbrance of any kind.

The Order complained of has only this legal postulate as its basis. Nothing has been mentioned therein on the
acquisition by the City of Davao of the lot in question by prescription, and a discussion of this matter as is found in
petitioner's brief would be entirely irrelevant.
15
REQUISITES for an Action to Quiet Title:
(1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of action, and
(2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity or legal efficacy.

16
Section 39. Every person receiving a certificate of title in pursuance of a decree or registration, and every subsequent purchasers of
registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances, except those noted on said
certificate, and any of the following encumbrances which may be subsisting namely: xxx (3) Any public highway, way, private way, ... or any
government irrigation, canal, or lateral thereof
NICOLAS VALISNO vs. FELIPE ADRIANO [May 23, 1988]

In June 1959, NICOLAS VALISNO bought a parcel of land in Nueva Ecija, covered by a TCT, from Felipe Adriano’s sister,
Honorata Adriano Francisco. The land which is planted with watermelon, peanuts, corn, tobacco, and other
vegetables adjoins that of the Felipe Adriano on the bank of the Pampanga River. Both parcels of land had been
inherited by Honorata Adriano Francisco and her brother, Felipe Adriano, from their father, Eladio Adriano. At the
time of the sale of the land to Valisno, the land was irrigated by water from the Pampanga River through a canal
about 70 meters long, traversing Adriano’s land.

In December 1959, Adriano levelled a portion of the irrigation canal so that Valisno was deprived of the irrigation
water and prevented from cultivating his 57-hectare land. Thus, Valisno filed in the Bureau of Public Works and
Communications a complaint for deprivation of water rights.

BUREAU OF PUBLIC WORKS: rendered A DECISION ordering Adriano to reconstruct the irrigation canal, "otherwise
judicial action shall be taken against him under the provisions of the Irrigation Act." Adriano asked for a
reinvestigation of the case WHILE Valisno rebuilt the irrigation canal at his own expense because his need for water
to irrigate his watermelon fields was urgent.

In June 1960, VALISNO filed a complaint for damages in the CFI of Nueva Ecija claiming that he suffered damages
amounting to P8,000 when he failed to plant his fields that year (1960) for lack of irrigation water, P800 to
reconstruct the canal on defendant Adriano's land, and P1,500 for attorney's fees and the costs of suit.

SECRETARY OF PUBLIC WORKS: reversed the Bureau's decision by issuing a final resolution dismissing Valisno's
complaint. The Secretary held that Eladio Adriano's water rights which had been granted in 1923 ceased to be
enjoyed by him in 1936 or 1937, when his irrigation canal collapsed. His non-use of the water right since then for a
period of more than five years extinguished the grant by operation of law, hence the water rights did not form part of
his hereditary estate, and Valisno did not acquire any water rights with the land purchased.

ADRIANO averred that neither his late father nor Honorata possessed water rights for the land. Adriano applied for
water rights for his land in 1956 and obtained the same in 1958. Thus, he had a perfect right to level his land for his
own use because he merely allowed his sister to use his water rights when she still owned the adjacent land.

CFI: held that VALISNO had no right to pass through ADRIANO’s land to draw water from the Pampanga River. Under
Section 4 of the Irrigation Law, controversies between persons claiming a right to water from a stream are within
the jurisdiction of the Secretary of Public Works and his decision on the matter is final.

ISSUE: W/N Valisno had a right to continue to enjoy the easement of water through Adriano’s land under the NCC.

VALISNO: argues that while the CFI correctly held that the Secretary of Public Works may legally decide who between
the parties is entitled to apply for water rights under the Irrigation Act, it erred in ruling that the Secretary has
authority to hear and decide VALISNO’s claim for damages for ADRIANO’s violation of VALISNO’s right to continue to
enjoy the easement of aqueduct or water through ADRIANO’s land under Articles 642 17, 64318, and 64619 of the
Civil Code.
17
Article 642. Any person who may wish to use upon his own estate any water of which he can dispose shall have the right to
make it flow through the intervening estates, with the obligation to indemnify their owners, as well as the owners of the lower
estates upon which the waters may filter or descend.

18
Article 643. One desiring to make use of the right granted inthe preceding article is obliged:
(1) To prove that he can dispose of the water and that it is sufficient for the use for which it is intended;
(2) To show that the proposed right of way is the most convenient and the least onerous to third persons;
(3) To indemnify the owner of the servient estate in the manner determined by the laws and regulations.

19
Article 646. For legal purposes, the easement of aqueduct shall be considered as continuous and apparent, even though the
flow of the water may not be continuous, or its use depends upon the needs of the dominant estate, or upon a schedule of
alternate days or hours.
SC: YES. The existence of the irrigation canal on ADRIANO’s land for the passage of water from the Pampanga River to
Honorata's land prior to and at the time of the sale of Honorata's land to VALISNO was equivalent to a title for the
vendee of the land to continue using it as provided in Article 624 20 of the Civil Code.

This provision shall also apply in case of the division of a thing owned in common on by two or more persons. This
provision was lifted from Article 122 of the Spanish Law of Waters.

Article 122. Whenever a tract of irrigated land which previously received its waters from a single
point is divided through inheritance, sale or by virtue of some other title, between two or more
owners, the owners of the higher estates are under obligation to give free passage to the water as an
easement of conduit for the irrigation of the lower estates, and without right to any compensation
therefore unless otherwise stipulated in the deed of conveyance.

No enlightened concept of ownership can shut out the Idea of restrictions thereon, such as easements. Absolute and
unlimited dominion is unthinkable, inasmuch as the proper enjoyment of property requires mutual service and
forbearance among adjoining estates.

As indicated in the decision of the Bureau of Works, "the principal issue involved in this case falls under the subject of
servitude of waters which are governed by Article 648 of the new Civil Code and the suppletory laws mentioned in
the cases of [Lunod vs. Meneses] and [Osmena vs. Camara] which are the irrigation law and the Spanish Law of
Waters of August 3, 1866, specifically Article 122 thereof.

The deed of sale in favor of Valisno included the "conveyance and transfer of the water rights and improvements"
appurtenant to Honorata Adriano's property. By the terms of the Deed of Absolute Sale, Honorata Adriano Francisco
sold, ceded, conveyed and transferred to Dr. Nicolas Valisno all "rights, title, interest and participations over the
parcel of land above- described, together with one Berkely Model 6 YRF Centrifugal Pump G" and one set of suction
pipe," and the water rights and such other improvements appertaining to the property subject of this sale.
According to VALISNO, the water right was the primary consideration for his purchase of Honorata's property, for
without it the property would be unproductive.

WATER RIGHTS, such as the right to use a drainage ditch for irrigation purposes, which are appurtenant to a parcel of
land, pass with the conveyance of the land, although not specifically mentioned in the conveyance. The purchaser's
easement of necessity in a water ditch running across the grantor's land cannot be defeated even if the water is
supplied by a third person. The fact that an easement by grant may also have qualified as an easement of necessity
does detract from its permanency as property right, which survives the determination of the necessity.

As an easement of waters in favor of the appellant has been established, he is entitled to enjoy it free from
obstruction, disturbance or wrongful interference, such as the appellee's act of levelling the irrigation canal to
deprive him of the use of water from the Pampanga River.

SC: reversed the decision of the CFI and ordered ADRIANO to grant VALISNO continued and unimpeded use of the
irrigation ditch traversing his land in order to obtain water from the Pampanga River to irrigate Valisno’s land.

LA VISTA ASSOCIATION, INC. vs. CA, SOLID HOMES, INC., ATENEO DE MANILA UNIVERSITY [September 5, 1997]
20
Article 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of
both shall be considered, should either of them be alienated, as a title in order that he easement may continue actively and
passively, unless at the time, the ownership of the two estates is divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed.
In 1949, the Tuasons sold to Philippine Building Corporation a portion of their landholdings by virtue of a Deed of
Sale with Mortgage. The deed provides that ". . . the BOUNDARY LINE between the property herein sold and the
adjoining property of the VENDORS shall be a road 15 meters wide, one-half of which shall be taken from the
property herein sold to the VENDEE and the other half from the portion adjoining belonging to the VENDORS."

In December 1951, the Philippine Building Corporation sold the subject parcel of land to ATENEO which assumed the
mortgage, with the consent of the Tuasons. On the other hand, the Tuasons developed a part of the estate
adjoining the portion sold to Philippine Building Corporation into a residential village known as La Vista
Subdivision. Thus, the boundary between LA VISTA and the portion sold to Philippine Building Corporation was the
15-meter wide roadway known as the Mangyan Road.

In 1952, ATENEO sold to MARYKNOLL the western portion of the land adjacent to Mangyan Road. MARYKNOLL then
constructed a wall in the middle of the 15-meter wide roadway, making one-half of Mangyan Road part of its school
campus. The Tuasons objected and later filed a complaint before the then CFI of Rizal for the demolition of the wall.
MARYKNOLL agreed to remove the wall and restore Mangyan Road to its original width of 15 meters.

In 1976, ATENEO informed LA VISTA of its intention to develop its property along Mangyan Road into a subdivision.
LA VISTA President Manuel Gonzales clarified certain aspects with regard to the use of Mangyan Road, saying that
“the easement of a right-of-way on Ateneo’s 7 ½ portion was created in La Vista’s favor and vice versa.” Later, La Vista
offered to buy the property ATENEO was intending to develop, on the condition that "the mutuaI right of way
between Ateneo and La Vista will be extinguished." The offer of LA VISTA to buy was not accepted by ATENEO.
Instead, ATENEO offered to sell the property to the public subject to the condition that the right to use the 15-
meter roadway will be transferred to the vendee. LA VISTA became one of the bidders. However it lost to Solid
Homes, Inc., in the bidding.

Subsequently, Solid Homes developed a subdivision now known as Loyola Grand Villas and they now claim to have
an easement of right-of-way along Mangyan Road through which they could have access to Katipunan Avenue.

LA VISTA however informed Solid Homes, Inc. that LA VISTA could not recognize the right-of-way over Mangyan Road
because Philippine Building Corporation and ATENEO never complied with their obligation of providing the Tuasons
with a right-of-way on their 7.5-meter portion of the road and since the property was purchased for commercial
purposes, Solid Homes, Inc., was no longer entitled to the right-of-way as Mangyan Road was established exclusively
for ATENEO in whose favor the right-of-way was originally constituted. LA VISTA, after instructing its security guards
to prohibit agents and assignees of Solid Homes, Inc., from traversing Mangyan Road, then constructed one-meter
high cylindrical concrete posts chained together at the middle of and along the entire length of Mangyan Road
thus preventing the residents of LOYOLA from passing through.

In 1976, Solid Homes, Inc. instituted the case before CFI of Rizal and prayed that LA VISTA be enjoined from
preventing and obstructing the use and passage of LOYOLA residents through Mangyan Road.

CFI (now RTC): rendered its decision recognizing the easement of right-of-way along Mangyan Road in favor of Solid
Homes, Inc., and ordering LA VISTA to pay damages and enjoining them from closing, obstructing, preventing or
otherwise refusing to Solid Homes, its successors-in-interest, their agents and all persons acting for and on its/their
behalf, and to the public in general, the unobstructed ingress and egress on Mangyan Road.

CA: rendered its decision affirming the decision of the RTC. A right-of-way was properly appreciated along the entire
route of Mangyan Road. One's attention should rather be focused on the contractual stipulations in the deed of sale
between the Tuasons and the Philippine Building Corporation, which were incorporated in the deed of assignment by
the Philippine Building Corporation in favor of Ateneo, as well as in the deed of sale when the property was
transferred by Ateneo to Solid Homes. Like any other contractual stipulation, the same cannot be extinguished except
by voluntary rescission of the contract establishing the servitude or renunciation by the owner of the dominant lots,
more so when the easement was implicitly recognized by the letters of the La Vista President to Ateneo dated
February 11 and April 28, 1976.
LA VISTA: assails the Decision of CA which recognized an easement of right-of-way along Mangyan Road,
permanently enjoining LA VISTA from closing to Solid Homes, Inc., and its successors-in-interest the ingress and
egress on Mangyan Road.

ISSUE: W/N an easement of right-of-way over Mangyan Road exists in favor of respondents Solid Homes, et. al.

SC: YES. LA VISTA’s cited cases involve the issuance of a preliminary injunction pending resolution of a case on the
merits. In the instant case, however, the subject of inquiry is not merely the issuance of a preliminary injunction but
the final injunctive writ which was issued after trial on the merits. A writ of preliminary injunction is generally
based solely on initial and incomplete evidence. Consequently, there may be vital facts subsequently presented
during the trial which were not obtaining when the writ of preliminary injunction was issued. It does not
necessarily mean that when a writ of preliminary injunction issues, a final injunction follows.

A LEGAL or COMPULSORY EASEMENT is that which is constituted by law for public use or for private interest. The owner of an
estate may claim a legal or compulsory right-of-way only after he has established the existence of four requisites, namely:
(a) the estate is surrounded by other immovables and is without adequate outlet to a public highway;
(b) after payment of the proper indemnity;
(c) the isolation was not due to the proprietors own acts; and,
(d) the right-of-way claimed is at a point least prejudicial to the servient estate, and insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest.

A VOLUNTARY EASEMENT on the other hand is constituted simply by will or agreement of the parties.

From the facts of the instant case, it is apparent that the parties and their predecessors-in-interest intended to
establish an easement of right-of-way over Mangyan Road for their mutual benefit, both as dominant and servient
estates. These certainly are indubitable proofs that the parties concerned had indeed constituted a voluntary
easement of right-of-way over Mangyan Road and, like any other contract, the same could be extinguished only by
mutual agreement or by renunciation of the owner of the dominant estate.

The free ingress and egress along Mangyan Road created by the voluntary agreement between Ateneo and Solid
Homes, Inc., is thus legally demandable (Articles 619 and 625, New Civil Code) with the corresponding duty on the
servient estate not to obstruct the same.

Resultantly, when the court says that an easement exists, it is not creating one. For, even an injunction cannot be
used to create one as there is no such thing as a judicial easement. In the instant case, the court merely DECLARES
the existence of an easement created by the parties.

The argument of LA VISTA that there are other routes to LOYOLA from Mangyan Road is likewise meritless, to say
the least. The opening of an adequate outlet to a highway can extinguish only legal or compulsory easements, not
voluntary easements like in the case at bar. The fact that an easement by grant may have also qualified as an
easement of necessity does not detract from its permanency as a property right, which survives the termination of
the necessity.

That there is no contract between LA VISTA and Solid Homes, Inc., and thus the court could not have declared the
existence of an easement created by the manifest will of the parties, is devoid of merit. The predecessors-in-
interest of both LA VISTA and Solid Homes, Inc., (the Tuasons and the Philippine Building Corporation, respectively)
clearly established a contractual easement of right-of-way over Mangyan Road. When the Philippine Building
Corporation transferred its rights and obligations to ATENEO, the Tuasons expressly consented and agreed thereto.
Meanwhile, the Tuasons themselves developed their property into LA VISTA. On the other hand, ATENEO sold the
hillside portions of its property to Solid Homes, Inc., including the right over the easement of right-of-way.

In sum, when the easement in this case was established by contract, the parties unequivocally made provisions for
its observance by all who in the future might succeed them in dominion.
BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC. (BAPCI) vs. EDMUNDO OBIAS, et al. [October 9, 2009]

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) constructed a road in Pili, Camarines Sur,
used by BISUDECO in hauling and transporting sugarcane to and from its mill site (Pensumil). In 1992, Bicol Agro-
Industrial Producers Cooperative, Inc. acquired the assets of BISUDECO. In 1993, Bicol Agro-Industrial filed a
Complaint against respondents alleging that on March 27, 1993 and April 3, 1993, respondents unjustifiably
barricaded the disputed road by placing bamboos, woods, placards and stones across it, preventing Bicol Agro-
Industrial and the other sugar planter’s vehicles from passing through the disputed road, thereby causing serious
damage and prejudice to petitioner.

Bicol Agro-Industrial alleged that BISUDECO constructed the disputed road pursuant to an agreement with the
owners of the ricefields the road traversed. The agreement provides that BISUDECO shall employ the children and
relatives of the landowners in exchange for the construction of the road on their properties. Bicol Agro-Industrial
contends that through prolonged and continuous use of the disputed road, BISUDECO acquired a right of way over
the properties of the landowners, which right of way in turn was acquired by it when it bought BISUDECO’s assets.
Bicol Agro-Industrial prayed that respondents be permanently ordered to restrain from barricading the disputed road
and from obstructing its free passage.

RESPONDENTS: denied having entered into an agreement with BISUDECO regarding the construction and the use of
the disputed road. They alleged that BISUDECO, without their knowledge and consent, constructed the disputed road
on their properties and has since then intermittently used the road. Respondents claimed they tolerated BISUDECO
in the construction and the use of the road since BISUDECO was a GOCC, and the entire country was then under
Martial Law. Respondents denied that the road has become a public road, since no public funds were used for its
construction and maintenance.

Bicol Agro-Industrial averred, as an alternative cause of action, that it will avail of the benefits provided for under
Article 649 of the NCC21. Bicol Agro-Industrial thus demanded from respondents a right of way over the disputed
road for its use. {Legal or Compulsory Easement}

RESPONDENTS: claimed that the road from the sugarmill to the Maharlika Highway at Barangay Romero, which exits
at the Rural Bank of Bula site, had a distance of only about 15 kilometers; hence, respondents asserted that said road
was shorter and was a more appropriate right of way than the disputed road.

RTC: issued a Writ of Preliminary Injunction ordering the respondents to desist from constructing barricades across
the road. In 1997, the RTC rendered a Decision, declaring the Writ of Preliminary Injunction issued against the
respondents permanent and perpetual, BUT Bicol Agro-Industrial is ordered to pay the owners of the lots affected by
the road. Upon full payment thereof, the plaintiff shall be declared the absolute owner of the road in question.

The RTC ruled that Bicol Agro-Industrial failed to present any concrete evidence to prove that there was an
agreement between BISUDECO and respondents for the construction of the disputed road. Moreover, it held that
Bicol Agro-Industrial did not acquire the same by prescription. The RTC, however, held that Bicol Agro-Industrial was
entitled to a compulsory easement of right of way as provided for under Article 649 of the New Civil Code upon
payment of proper indemnity to respondents. {Both parties filed a motion for reconsideration of the RTC Decision.}

BICOL AGRO-INDUSTRIAL: contended that: (1) the value of the land is excessive; (2) the evidence is insufficient to
justify the award; (3) the decision is contrary to law and jurisprudence .

CA: rendered its decision MODIFYING the decision of the RTC. The CA affirmed the finding of the RTC that there was
no conclusive proof to sufficiently establish the existence of an agreement between BISUDECO and respondents. CA
also declared that an easement of right of way is discontinuous and as such cannot be acquired by prescription. The
CA affirmed the finding of the RTC that petitioner was entitled to a compulsory easement of right of way upon
payment of proper indemnity to respondents, but ownership over the disputed road should remain with
respondents, despite the grant of a compulsory easement.

21
ART. 649 – The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to
other persons, and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the
proper indemnity.
BICOL AGRO-INDUSTRIAL: filed a Motion for Reconsideration alleging that the CA Decision failed to rule on the issue
of estoppel and laches. Moreover, Benosa and Padua filed a Motion for Reconsideration assailing the portion of the
CA Decision deleting the award of indemnity to them. CA denied such.
ISSUE: W/N the subject road may be acquired by prescription.
SC: NO. EASEMENT or SERVITUDE is an encumbrance imposed upon an immovable for the benefit of another
immovable belonging to a different owner. By its creation, easement is established either by law (in which case it is a
legal easement) or by will of the parties (a voluntary easement). In terms of use, easement may either be continuous
or discontinuous. The easement of right of way – the privilege of persons or a particular class of persons to pass
over another’s land, usually through one particular path or linen – is characterized as a discontinuous
easement because its use is in intervals and depends on the act of man. Because of this character, an easement of
a right of way may only be acquired by virtue of a title 22.

While conceding that they have no direct evidence of the alleged agreement, BICOL AGRO-INDUSTRIAL posits that
they presented circumstantial evidence which, if taken collectively, would prove its existence. HOWEVER, crucial to
the petitioner’s cause was its burden of proving the existence of the alleged agreement between BISUDECO and
respondents for the construction of the road. In this regard, the RTC and CA found that petitioner failed to prove
its existence. The list of the Employees of Defendants’ relatives, son/daughter employed by the BISUDECO does not
in any manner prove the alleged agreement. There was no conclusive proof to sufficiently establish the existence of
an agreement between BISUDECO and the defendants-appellants regarding the construction and the use of the
disputed road.

The Court
On Acquisition by Prescription: [Bogo-Medellin Milling Co., Inc. v. CA] involving the construction of a railroad track to a sugar mill.
discussed the discontinuous nature of an easement of right of way and the rule that the same cannot be acquired by
prescription. “Continuous and apparent easements are acquired either by virtue of a title or by prescription of 10
years. The trial court and the CA both held that petitioner supposedly acquired the easement of right of way over the
subject land with the lapse of the 10-year prescriptive period in 1969 for the reason that the railroad right of way
was, according to them, continuous and apparent in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner
they are exercised, not according to the presence of apparent signs or physical indications of the existence of such
easements. Thus, easement is continuous if its use is, or may be, incessant without the intervention of any act of
man, like the easement of drainage; and it is discontinuous if it is used at intervals and depends on the act of man,
like the easement of right of way.

The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets
foot on somebody else’s land. Like a road for the passage of vehicles or persons, an easement of right of way of
railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes
over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of
man which is the very essence of discontinuous easements.

The presence of physical or visual signs only classifies an easement into apparent or non-apparent. Thus, a road
(which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements,
while an easement of not building beyond a certain height is non-apparent.

On Laches and Estoppel: There is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize
neglect or sleeping on one’s rights, but rather to avoid recognizing a right when to do so would result in a clearly unfair situation.
The question of laches is addressed to the sound discretion of the court and each case must be decided according to its
particular circumstances. ART. 622 seeks to prevent the imposition of a burden on a tenement based purely on the generosity,
tolerance and spirit of neighborliness of the owners thereof.

LACHES is a doctrine in equity and our courts are basically courts of law and not courts of equity; equity, which has been aptly
described as "justice outside legality," should be applied only in the absence of, and never against, statutory law; Aeguetas
nunguam contravenit legis. Based on this principle, we find that the positive mandate of Article 622 of the Civil Code – the
statutory provision requiring title as basis for the acquisition of an easement of a right of way – precludes the application of the
equitable principle of laches.

22
ART. 622 - Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title.