Chapter 1

OWNERSHIP IN GENERAL

Art. 427. Ownership may be exercised over things or rights.

Define: the independent and general right of a person to control a thing in his possession,
enjoyment, disposition and recovery, subject to no restrictions except those imposed by the
State, the law or private persons.

o In Roman Law, ownership was an absolute right.

o But this has evolved with time, in light of social justice, general welfare of the people,
exercise of police power, environmental protection and stewardship, civil laws and statutes
passed

Thus: we have building permits, sanitary and environmental regulations, zoning compliance
for residential, commercial zones, Agrarian reform laws.

Q. What are the Different Kinds of Ownership? State their Characteristics?

1. Full ownership (dominium or jus propia) – all rights of owner; title and possession is with
property owner.
2. Naked ownership (nuda proprietas) – this is ownership where the right to the use and fruits
is denied; owner has title to property but does not enjoy the use and fruits or possession of
the property.
3. Sole ownership – vested in only one person
4. Co-ownership – vested in two or more owners; each co-owner is owner of the whole, and at
same time, owner of an undivided aliquot part thereof.

Art. 428. The owner has the right to enjoy and dispose of a thing, without other limitations
than those established by law.

The owner has also a right of action against the holder and possessor of the thing in order
to recover it.

Q. Under Art. 428, what are the Rights of a Property Owner?

A. 1. Right to ENJOY – includes rights to possess, to use, to the fruits

2. Right to DISPOSE – includes rights to consume, destroy or abuse;

to encumber or alienate

3. Right to RECOVER or vindicate

I. Rights of an Owner Under Roman Law

1. Jus possidendi – right to possess ( to hold or control a thing or enjoy a right)
2. Jus utendi – right to use (includes right to exclude others from enjoying it)
3. Jus fruendi – right to the fruits ( natural, industrial and civil fruits)
4. Jus abutendi – right to consume (transform or abuse)
5. Jus disponendi – right to dispose (includes right to donate, sell, pledge, mortgage)
6. Jus vindicandi – right to recover
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Q. What are the Limitations of the RIGHT OF OWNERSHIP?

A. Right of ownership is not absolute, there are limitations, such as:

1. Those imposed by the State or the Law –

a.) State’s exercise of :
i. Eminent Domain – Art. 435
ii. Police Power - Art. 436
iii. Taxation,

b.) Certain legal maxims and principles –

(i.) Welfare of the people is the supreme law of the land (salus populi est suprema
lex)

(ii.) Use your own as not to injure another´s property (sic utere ut alienum non laedas).
The owner of a thing cannot make use thereof in such a manner as to injure the
rights of a third person (Art. 431).

c.) Legal Easement and Servitudes and similar laws, ordinances

d.) Art. 431 – Use must not injure rights of others; Nuisance (Arts. 609-707)
e.) Arts. 432 – Doctrine of State of Necessity; interference is necessary to avert imminent
danger or precent greater injury

2. Those imposed by the Owner – thru contracts or agreements with other parties (lease,
usufruct, pledge where owner surrenders possession)

3. Those imposed by the Grantor – provisions or conditions made by donor or grantor on the
use or disposition of the property

Q. Art. 428, par. 2, provides that - “The owner has a right of action against the holder and possessor of
the thing in order to recover it.”

If what is to be recovered is a movable or personal property, what kind of action or legal remedy
may be availed of by the property owner?

A. RECOVERY OF MOVABLE OR PERSONAL PROPERTY:

1. Replevin
o A provisional remedy or action to recover possession of personal property.
o Governed by Rule 60, Sec. 1-10, Rules of Court (PROVISIONAL REMEDIES)
o Writ of Replevin cannot be directed against the lawful possessor
o Will not lie to recover property in custodia legis
o Maybe served anywhere in the Phils.

Q. If what is to be recovered is an immovable or real property, what kind of actions or legal

remedies may be availed of by the real property owner?

A. RECOVERY OF MOVABLE OR REAL PROPERTY:

1. Forcible Entry Or Unlawful Detainer (Accion Interdictal)
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 2. Accion Publiciana
3. Accion Reivindicatoria
4. Quieting of Title
5. Also in certain cases: Writ of Preliminary Mandatory Injunction and Writ of Possession

SUMMARY:

1. FORCIBLE ENTRY (Detentacion) Questions:

 Define: It is a summary action to recover possession of real property by a person deprived

thereof by force, intimidation, strategy, threat or stealth (Rule 70, Sec. 1, RC).

 What to allege in complaint and prove in hearing of case: Plaintiff must allege and prove
prior physical possession (Sps. Benitez v. CA, 1997)

 Period Limitation: Must be filed with Municipal Trial Court within 1 year from unlawful
withholding or depriving of possession; may not be alleged in complaint but must be proved
in trial.

 What is main issue in forcible entry?

A. Issue involved is mere physical possession (de facto), not juridical possession (de
jure) nor ownership.

 Can a person who is in possession of public land, file an action for forcible entry?
A. Yes, because judgment in this case is conclusive as to possession only, but not to title
or ownership of property

 Preliminary injunction is available as a remedy to abate or prevent further acts of

dispossession against plaintiff, or to restore him/her in possession (Rule 70, Sec.15)

 To whom is judgment in forcible entry action binding?

A. Forcible entry is an action in personam , thus binding upon parties and privies only. It is
not in rem (binding upon the whole world).

2. UNLAWFUL DETAINER (Desahucio):

 Define: It is an action brought when possession by a lessor, vendor, vendee or other person
of any land or building is being unlawfully withheld after the expiration or termination of the
right to hold possession by virtue of any contract, express or implied. (Rule70, Sec. 1, supra)

 Will Unlawful Detainer lie against squatters? Yes, as their possession was by mere
tolerance and becomes unlawful once owner demands that they vacate.

 Where filed? Must be filed with MTC within 1 year from date of demand to vacate.

 If several demands were made by the complainant, when or how is 1 year period counted?

1.) If there is affixed period for termination of lease and that lease ends automatically without
need of any demand – the 1 yr. period will be counted from expiration of the lease.

2.) If the ground for ejectment is non-payment of rent, or non-fulfillment of conditions of the
lease, the 1-year period is counted from the date of demand to vacate; or if there are
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 several demands made, from latest demand. (Calubayan v. Pascual, L-22645, Sept. 18,
1967)

3.) The demand must be made at least 5 days (for building) or, 15 days (land) before the
action is brought; demand requirement may not be alleged in complaint but must be
proved in trial.

 What is the Issue involved in Unlawful Detainer?

A. Mere physical possession (de facto), not juridical possession (de jure) nor ownership.

de jure, noun, adv., adj. (di joo r-ee, dey joo r-ey; Lat. de yoo-Re) - by right ; according to
law

de facto, noun, adj. (dee fak-toh) 1. in fact; in reality: Although his title was prime minister,
he was de facto president of the country. 2. actually existing, especially when without lawful
authority ( distinguished from de jure). In fact. Description of a person or action that exists
for all intentions and purposes, but which lacks official legitimacy.

 Judgment is conclusive as to possession only, not to title or ownership of property

 Preliminary injunction is available as a remedy to abate or prevent further acts of

dispossession against plaintiff, or to restore him/her in possession (Rule 70, Sec.15)

 To whom is decision binding in UD cases?

A. UD is an action in personam (binding upon parties and privies only), not in rem (binding
upon the whole world).

 Is prior possession by plaintiff or petitioner a condition precedent in Unlawful Detainer?

A. Unlike forcible entry, prior possession by plaintiff or petitioner is not always a condition
precedent (Pharma Industries Inc. v Pajarillaga, L-53788, Oct. 17, 1980)

Note: Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect
the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on
ground of lack of cause of action or prematurity; but the same would not prevent a court of
competent jurisdiction from exercising its power of adjudication over the case before it, where the
defendants, as in this case, failed to object to such exercise of jurisdiction in their answer and even
during the entire proceedings a quo.” (LIBRADA M. AQUINO vs. ERNEST S. AURE [G.R. No. 153567,
February 18, 2008])

 If after filing of motion for execution pending appeal, accrued rentals are paid,
will this payment prevent execution of the judgment against the defendant in
the unlawful detainer case?

A. NO, subsequent payment cannot prevent execution (Base v Leviste, L-52762, Aug.
29, 1980).

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3. ACCION PUBLICIANA –

 Define: Action to recover the better right of possession, and is a plenary action in an
ordinary civil proceeding before the Regional Trial Court.

 Period to file: Must be brought within 10 years, otherwise the real right of possession is lost

 Issue involved? possession de jure, not possession de facto

 If possession is deprived for more than 1 year, what alternative remedy can plaintiff avail of?
Accion publiciana is remedy when the 1-year period for bringing “forcible entry” or “unlawful
detainer” has already expired, to be brought in the RTC, or the MTC, as the case may be.

 Where to file? May also be filed with MTC if the assessed value of the property does not
exceed P20,000 or P50,000, for actions filed in Metro Manila. (Republic Act No. 7691, [Sec.
3], expanded MTC jurisdiction, 1994)

 Res judicata only as to the fact/issue of better right of possession, but not to other actions
between the same parties for other issues like quieting of title, compelling the other party to
execute a formal deed of sale over the same property, etc…

Res judicata: noun \ˈrēz-ˌjü-di-ˈkä-tə\ : a matter finally decided on its merits by a court
having competent jurisdiction and not subject to litigation again between the same
parties

 An action in personam, not in rem; binding only upon the parties and their privies or
successors in interest but not against strangers or third parties.

4. ACCION REIVINDICATORIA -

 What: Action to recover ownership over real property brought in the Regional Trial Court
(now MTC. Republic Act No. 7691, [Sec. 3], )

 Where filed: May be filed with the RTC even if an action for forcible entry or unlawful
detainer has been filed over the same property between the same parties.

 May also be filed with MTC if the assessed value of the property does not exceed P20,000
or P50,000, for actions filed in Metro Manila. (Republic Act No. 7691, [Sec. 3], expanded
MTC jurisdiction, 1994)

 When filed: May be filed anytime even if cause of action will also include ejectment.

 For Prescription purposes: (a.) must be brought within 10 years, if the other party claims
ownership based in good faith and ordinary prescription, or, (b.) within 30 years if the other
party obtains ownership thru extraordinary prescription, one which does not require good
faith or just title

 May be availed of despite lapse of time if a constructive trust is created in favor of the party
vindicating his/her right to the property (Eustaquio Jan et al., v. Vicente Zuniga, et al, L-
17044, Apr. 28, 1962, etc…p. 124-125, Civil Code, Paras, Vol. 2)

At variance with SC ruling in JM Tuason and Co., v. Magdangal, L-15539 which ruled that
reconveyance based on an implied or constructive trust prescribes in 10 years.

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  Issue involved - is ownership and not mere possession de jure or de facto

 To whom binding - An action in personam, not in rem; binding only upon the parties and their
privies or successors in interest but not against strangers or third parties.

 What judgment includes in general - Judgment for Ownership generally carries with it the
right to possession and those necessarily included therein, unless, it is clearly established
that the actual possessor had some rights that need to be respected or protected.

 Will not prosper if the deprivation of land is by virtue of a valid law.

NOTA BENE:

o In 1994, Republic Act No. 7691 expanded the MTC’s jurisdiction (Sec. 3), to include other
actions involving title to or possession of real property (accion publiciana and reinvindicatoria)
where the assessed value of the property does not exceed P20,000 or P50,000, for actions filed
in Metro Manila.

o Because of this amendment, the test of whether an action involving possession of real property
has been filed in the proper court no longer depends solely on the type of action filed but also on
the assessed value of the property involved.

o More specifically, since MTCs now have jurisdiction over accion publiciana and accion
reinvindicatoria (depending, of course, on the assessed value of the property), jurisdiction over
such actions has to be determined on the basis of the assessed value of the property. (Spouses
Cruz v. Spouses Leonardo et al., G.R. No. 172217, Sept. 18, 2009)

WRIT OF INJUNCTION (Civil Code)

In Forcible Entry Actions: Art. 539, par. 2 – “xxx. A possessor deprived of his possession
through forcible entry may within 10 days from the filing of the complaint, present a motion to secure
from the competent court, in the action for forcible entry, a writ of preliminary mandatory injunction
to restore him in his possession. The court shall decide the motion within 30 days from filing
thereof.

In Unlawful Detainer Cases: Art. 1674. In ejectment cases where an appeal is taken the
remedy granted in article 539, second paragraph shall also apply, if the higher court is satisfied that
the lessee´s appeal is frivolous or dilatory, or that the lessor´s appeal is prima facie meritorious. The
period of 10 days referred to in said article shall be counted from the time the appeal is perfected.

General Rule: Remedy of preliminary mandatory injunction cannot be filed independently by a

person deprived of his possession of real or personal property. Reason: there is a disputable
presumption that the defendant who is in actual possession has the better right.

Exception: see Art. 539 - Original Forcible Entry Case; Art.1674 – Unlawful Detainer Case
Appealed

Exception to Exception:
 Rustia v. Franco, 41 Phil. 281: Even if there is no action for forcible entry or unlawful
detainer, an owner still in actual possession who wants to prevent repeated or further
intrusion into his property by a stranger who persists in entering and taking products of his
land, may file an independent action for preliminary or prohibitive injunction.
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WRIT OF POSSESSION
 A writ of possession used in connection with the Land Registration Law is an order directing the
sheriff to place a successful registrant under the Torrens system in possession of the property
covered by a decree of the Court.
 The right to demand writ of possession never prescribes. Reason: lands with a Torrens title
cannot be acquired by prescription.
 Its issuance is summary in nature.

TORRENS TITLE: Conclusive Evidence of Ownership

General Rule: conclusive evidence of ownership of the land referred therein

 Presumption of regularity and validity in its favor. Thus, persons dealing with property covered
by Torrens Certificate of Title are not required to go beyond what appears on its face.
 After 1 year from decree of registration, it is no longer open to review or attack and cancelled
although its issuance is attended with fraud.

Exception:
 Reconveyance (thru accion reivindicatoria) of the property covered by the Torrens Title may
still be sought if the same is obtained by fraud or other illegal means.
 If the same land has been transferred to an innocent purchaser in good faith, the remedy is
to file an action for damages.

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

o The “DOCTRINE OF SELF-HELP” -- the right to counter and use reasonable force to
protect one´s property, and repel or prevent its unlawful invasion or taking.

o This is one instance when a person is allowed to take the law into his own hands and use
force. Normally, the power to use force is reserved to the sovereign police power of the State.

o Art. 429 is similar to Art. 11, par. 4 of the Revised Penal Code
“ Justifying Circumstances – The following do not incur any criminal liability:
xxx
4. Any person who, in order to avoid an evil or injury, does an act which causes damage to another,
provided that the following requisites are present:
First. That the evil sought to be avoided actually exists;
Second. That the injury feared be greater than that done to avoid it;
Third. That there be no other practical and less harmful means of preventing it.

What are the REQUISITES FOR VALID EXERCISE OF “DOCTRINE OF SEL-HELP”?

1.) Person who employed force or violence must be the owner or lawful possessor.
2.) This person must be in actual physical possession.
3.) There must be actual or imminent aggression.
4.) Force employed by the owner or lawful possessor is reasonable.

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 ILLUSTRATE :

a) X armed with a gun and Y with a knife both threatened A with death if he does not give up his
new car. But A who used to be a policeman knew from recent news that people whose cars
have been carnapped were also killed. A had a gun and opted to use it against X thwarting the
carnapping attempt. Y ran away as he only has a knife. X was injured. Is A justified in shooting
X in this case?

Answer: Yes. Apply doctrine of self-help under Art. 429….(see above discussion)

b) A owns a BMW car. X and Y succeeded in stealing the car. One week after, A saw his car in
Y’s house. A went to Y’s house and put a gun to Y’s head to give up the BMW, otherwise, he
will shoot him. Is this allowed under the self help doctrine in Art. 429?

Answer: NO, as A is no longer in physical possession of the car. This 2nd requisite is lacking –
“that A must be in actual possession”. In cases where the possessor or holder of a property
claiming ownership or title thereto is illegitimate, the true owner (who is not in possession) must
go to court.
“A” cannot take the law in his hands and apply the doctrine of Self-help under Art. 429,
because he is not in possession. Here, car owner “A” must resort to judicial remedies provided
by law to recover his property.

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

o The right of owner to enclose his land or tenements is limited by the servitudes existing thereon.

o Lunod v. Meneses, 11 Phil. 128 – Owner of lower estate cannot enclose his land by ditches or
fences which impedes the flow of water, although he may regulate or control the descent of the
water.

Art. 431. The owner of a thing cannot make use thereof in such a manner as to injure the
rights of a third person.

• An owner may use his property in such a way as not to injure another´s property (sic utere ut
alienum non laedas).

• Sample cases, see p. 147-148, Paras, Vol. 2, Civil Code

Art. 432. The owner of a thing has no right to prohibit the interference of another with the
same, if the interference is necessary to avert an imminent danger and the threatened
damage compared to the damage arising to the owner from the interference, is much greater.
The owner may demand from the person benefited indemnity for the damage to him.

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 o Art. 432 refers to the legal principle of “STATE OF NECESSITY” as distinguished from the
doctrine of “Self-help” in Art. 429.

o It is similar to the rule in Art. 11 par. 4 of the Revised Penal Code where state of necessity is
deemed a justifying circumstance to prevent a greater injury.

“Any person who, in order to avoid an evil or injury, does an act which causes damage to another
does not incur criminal liability provided that the following requisites are present:
1. That the evil sought to be avoided actually exists
2. That the injury feared be greater than that done to avoid it
3. That there be no other practical and less harmful means of preventing it.”

General Rule: Civil indemnity or compensation may be demanded by the property owner from
the person/s benefitted for the damage done to him.

Exception: No compensation if the injury is caused by the property owner himself, and the
person who interfered was not at fault.

NOTE: Study application of Art. 432 – thru EXAMPLES in your Paras book.

Art. 433. Actual possession under claim of ownership raises disputable presumption of
ownership. The true owner must resort to judicial process for the recovery of the property.

o Article 433 applies when the plaintiff & true owner is not in possession of the property.
o If the possessor claiming the ownership is illegitimate, the true owner (not in possession) must
go to court. He cannot apply the doctrine of self-help under Article 429 since he is not in
possession.

o What are the Legal Remedies or Judicial process available to plaintiff ?

1. Action for forcible entry
2. Accion publiciana
3. Accion reivindicatoria
4. Quieting of title

Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely
on the strength of his title and not on the weakness of the defendant's claim.

o What are the 2 REQUISITES that must be proven in an action to recover property?
1. The Identity of the property – size, boundaries, location must be clearly demonstrated
2. Plaintiff‘s Title to it - plaintiff must establish the fact that he has a better title and right to the
property than the present possessor; plaintiff must rely on his own title and not on the
weakness of the defendant-possessor. [Study the cases cited Paras book. ]

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Art. 435. No person shall be deprived of his property except by competent authority and for
public use and always upon payment of just compensation.
Should this requirement be not first complied with, the courts shall protect and in a
proper case, restore the owner in his possession.

o This provision is adopted from the Constitutional provision on eminent domain which states: “no
person may be deprived of property without due process of law.” (Art. III, Sec.1, 1987 Phil.
Constitution)

Define Eminent Domain: sovereign right of the State to acquire private property (of private persons,
corporation, or political subdivisions) for public use upon payment of just compensation.

• Eminent Domain refers to the Right.

• Expropriation refers to the Procedure to effect or exercise this right. (Rule 67, Rules of Court)

• Expropriation proceeding is filed with the Regional Trial Court and is governed by Rule 67 of the
Rules of Court.

• Eminent Domain refers to the right. Expropriation refers to the procedure to effect or exercise
this right. (Rule 67, Rules of Court)

What are the Essential Requisities of Eminent Domain?

1. Taking by competent authority

2. Observance of due process of law
3. For public use or purpose
4. Payment of just compensation

1. Taking by COMPETENT AUTHORITY

A. Authority as of right – the State

B. Authority by virtue of a grant -- persons or corporations offering public services

Specific examples of Competent Authority:

1. National Government (thru the President)
2. Cities thru its Board with the mayors approval
3. Provinces (thru Provincial Board with approval of Executive Secretary of Pres.
4. Municipalities (id)
5. Other public corporations thru its Board of Directors upon prior govt. approval
6. The Manila Railroad Co.,

 Congress has inherent right to possess and exercise the power of eminent domain, and may
validly delegate this to local governments, other public entities and public utilities.

 The right to expropriate is not an inherent power of municipal corporations. A law must first exist
conferring upon it the power of eminent domain before it can exercise this right.

2. Observance of DUE PROCESS OF LAW

Art. III, Sec.1, 1987 Phil. Constitution - no person may be deprived of property without due process
of law.

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 o There is due process of law when there had been substantial compliance with the procedure
laid under Rule 67 of the Rules of Court – Expropriation Proceedings.

o Read Cases: Santos v. Director of Lands, 22 Phil. 424; Ayala de Roxas v. City of Manila 9
Phil. 215 and Arce et al. v. Genato, L-40587, Feb. 27, 1976.

 Strict construction: Whenever an entity is granted the right to expropriate, the grant is strictly
construed against the expropriator.

3. For PUBLIC USE or PUBLIC PURPOSE

General rule: Question or issue of public use/purpose is a question of fact. It is a judicial question
that can be inquired into and heard by the Court.

Exception: If Congress passed a resolution specifically expropriating a property for a clear and
designated public purpose, the courts cannot inquire into the necessity of such purpose.

 Congress may authorize the devoting of land from one public use to another. A city is not so
authorized. (City of Manila v. Chinese Community, 40 Phil. 349)

 Doctrine of Reasonable Necessity: Absolute necessity for public use is not required for
expropriation; reasonable necessity is all that is required. (Manila Railroad Co., v. Mitchell, 50
Phil. 832)

 Public Use is not limited only to use by the general public, nor synonymous only with public
interest, public benefit, public welfare and public convenience. It can also include furtherance of
social justice and urban development, such as providing for socialized housing for slum dwellers
to become private homeowners, etc. (Reyes v. NHA, 395 SCRA 494, 2003)

Read Case: RP v. PLDT Co., L-18841, Jan. 27, 1949

 The idea that "public use" is strictly limited to clear cases of "use by the public" has long
been discarded. x x x
 The purpose in setting up the marker is essentially to recognize the distinctive contribution of
the late Felix Manalo to the culture of the Philippines, rather than to commemorate his
founding and leadership of the Iglesia ni Cristo. The attempt to give some religious
perspective to the case deserves little consideration, for what should be significant is the
principal objective of, not the casual consequences that might follow from, the exercise of
the power. (MANOSCA vs. COURT OF APPEALS [GR 106440, 29 Jan. 1996])

Q. If after expropriation, the expropriating authority failed to use the land expropriated for the
purpose alleged in expropriation complaint, but instead now applies the land to another
completely different use or purpose. Can the private landowner file a case to recover or
reacquire his land expropriated?

A. Yes. The Supreme Court in an En Banc decision in MCIAA v. Lozada, G.R. No. 176625, February
25, 2010, ruled to allow recovery of the land by the private owners for the following reason:

„More particularly, with respect to the element of public use, the expropriator should commit to
use the property pursuant to the purpose stated in the petition for expropriation filed, failing
which, it should file another petition for the new purpose. If not, it is then incumbent upon the
expropriator to return the said property to its private owner, if the latter desires to reacquire the
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 same. Otherwise, the judgment of expropriation suffers an intrinsic flaw, as it would lack one
indispensable element for the proper exercise of the power of eminent domain, namely, the
particular public purpose for which the property will be devoted. Accordingly, the private
property owner would be denied due process of law, and the judgment would violate the
property owner’s right to justice, fairness, and equity.“

“x x x the taking of private property, consequent to the Government’s exercise of its power of
eminent domain, is always subject to the condition that the property be devoted to the specific
public purpose for which it was taken. Corollarily, if this particular purpose or intent is not
initiated or not at all pursued, and is peremptorily abandoned, then the former owners, if they so
desire, may seek the reversion of the property, subject to the return of the amount of just
compensation received. In such a case, the exercise of the power of eminent domain has
become improper for lack of the required factual justification.”

4. PAYMENT OF JUST COMPENSATION

Q. What is Just Compensation?

A. Just compensation means FAIR MARKET VALUE of the property. FACTORS to consider:
 Cost of acquisition
 Current value of similar properties
 Their size, shape or location of land and any improvements thereon at the time of taking
 Its actual or potential use/s
 Fair and full equivalent value of the loss sustained.
 Tax declarations thereon
 Consequential damages or the loss sustained – example: injuries to adjoining portions of the
land, demolition of buildings, destruction of crops, depreciation caused to the remaining
property, if any.

o To be determined by the Court thru appointment of not more than 3 competent and
disinterested commissioners… ( Sec. 5, 6, 7, Rule 67, Rules of Court)

Q. WHEN do you compute, assess or determine just compensation?

A. The value of the property taken should be assessed

(a.) AS OF THE TIME OF TAKING, [Com. of Public Highways v. Burgos, 96 SCRA 831]

(b.) UPON THE FILING OF EXPROPRIATION PROCEEDINGS [R.P. v. Castellvi, 58 SCRA 336]

o If the complainant-expropriator enters or takes the property even before filing of the
expropriation complaint, the assessment should be made as of the TIME OF ENTRY
or TAKING. [City of Cebu vs. Dedamo, GR 142971, 7 May 2002; Ansaldo vs.
Tantuico GR 50147, 3 August 1990]

Q. Is the potential future benefits or rise in value of the property, and its sentimental value to the
owner be also considered in the valuation of the property expropriated?

A. Speculative valuation or benefits, and sentimental value to the owner are not considered in
determining just compensation (Manila Railroad Co. v. Mitchell, 49 Phil. 801)

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Q. If the expropriator made valuable improvements on the property at the time it entered the
property, should this improvement be deducted in the just compensation to be paid to the
property owner?

A. Cost of improving expropriated property is borne by plaintiff-expropriator and should not be

deducted from the compensation to be paid to property owner (City of Manila v. Corrales, 32
Phil. 85). In the same manner that the govt. expropriator need not pay for the improvements
made not by the owner but by the occupier (Jap.). (RP v. Lara, L-5080, Nov. 29, 1954)

Q. In case of expropriation, WHEN is OWNERSHIP of property transferred?

A. Only when payment of just compensation with interest has been made. (Jacinto v. Dir. Of Lands,
49 Phil. 583)

Q. In cases where the govt. failed to pay the compensation despite demand, can the owner file an
action to recover possession of his property?

A. Yes, within FIVE YEARS from the FINALITY OF JUDGMENT in the expropriation proceedings,
the OWNER shall have the right to recover possession of his property. (Republic v. Lim, 462
SCRA 265 )

Q. If just compensation has been determined by the court but still not paid by the govt. despite
being final, to whom should you file a suit against to collect payment?

A. If the government does not pay, suit may be filed against the Auditor General. (Ministerio v. CFI
of Cebu, 40 SCRA 464; Santiago v. RP, 87 SCRA 294)

Q. If expropriation is abandoned by plaintiff/expropriator can the property owner be indemnified for

all losses or prejudice caused to him?

A. YES. The property owner must be indemnified for all losses or prejudice caused him by the
expropriation action.

Effect of Expropriation on Ownership

1. Ownership or title (except right to occupy or possess), is transferred only upon full payment of
just compensation with interest. (Jacinto v. Dir. of Lands, 49 Phil. 583; Reyes v. NHA, 395 SCRA 494,
2003).

2. Taxes due on the property expropriated shall be paid by the expropriator or govt. once it is taken
or occupied, even if the title does not pass until payment is made. (Calvo v. Zandueta, 49 Phil. 605).

3. Expropriation transfers ownership over all kinds of properties whether real or personal, tangible
or intangible. (Metropolitan Water District v. Director of Lands, 57 Phil. 293)

Art. 436. When any property is condemned or seized by competent authority in the interest of
health, safety or security, the owner thereof shall not be entitled to compensation, unless he
can show that such condemnation or seizure is unjustified.
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o Seizure or condemnation as an exercise of Police Power includes the right to destroy the
property seized provided that public interest is served and the means used are not unduly harsh,
abusive or oppressive. If unjustified, the owner is entitled to just compensation.

o The State in the exercise of police power, may abate nuisances whether public or private,
whether per se or per accidens. (More discussions later in Title VIII on Nuisances, Arts. 694- 706.).

Art. 437. The owner of a parcel of land is the owner of the surface and of everything under it,
and he can construct thereon any works or make any plantations and excavations which he
may deem proper, without detriment to servitudes and subject to special laws and
ordinances. He cannot complain of the reasonable requirements of aerial navigation.

Q. Is the right of the landowner absolute? Or is it subject to limitations?

A. Surface Right of Landowner is subject to the following limitations:

1. Servitudes or easements
2. Special Laws – e.g. Mining Law
3. Ordinances – Heights of buildings or depth of underground constructions
4. Reasonable requirements of aerial navigation
5. Principles of human relations (justice, honesty, good faith) and prevention of injury to the
rights of third person.
o (Castro v. Monsod, G.R. No. 183719, Feb. 02, 2011)

ART. 437 :

o The word LAND usually refers to the surface of the earth. In a legal sense, however, it refers to
that which extends from the centre of the earth up to the air space above. This is commonly
referred t o as the "heaven to hell" concept.

o This legal concept stemmed from medieval Roman Law, phrased in Latin: Cuius est solum, eius
est usque ad caelum et ad inferos ("For whoever owns the soil, it is theirs up to Heaven and
down to Hell.“)

o One who owns land enjoys SURFACE RIGHTS -- he owns the land surface, and any sand,
gravel, soil which can be excavated by surface operations.

o SURFACE RIGHTS to land also include ownership of the air space above the land owned, that
owner can reasonably use, subject to zoning and building limitations, air travel or navigation
easement and other special laws of the Philippines.

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 o Example of cases involving Air and Surface Rights in Phils. :

1.) Alphaland Corp. is building a 34-story Alphaland Tower along Ayala Avenue, a P3-billion
skyscraper project.

Alphaland paid about P93 million to purchase “air rights” from the owner of the adjacent 7-
storey KPMG Center (the former Prudential Bank building), to provide an unobstructed view
of the central business district on its left side.

This means that if KPMG will, in the future, expand or tear down the current building and
build a new one, it cannot build anything taller than 7 stories so as not to block Alphaland’s
current view, or up to a certain height agreed by the parties in the contract.

2.) X owns a private land traversed by a big navigable river. The LGU during construction of its
barangay road, authorized its contractors to extract sand and gravel in the banks and the
bed of the big river in the land of X.

Q. Can Landowner X prevent the LGU and its agents from quarrying sand and gravel
therein, or at least, ask for indemnity or payment for the sand/gravel taken from the river bed
and bank?

A. NO, because river banks and river beds are public domain properties owned by the
State. (Hilario v. City of Manila, L-19570, Apr. 27, 1967)

Q. If minerals and natural resources are found in a private property owner’s land, does the
landowner becomes the owner thereof automatically? Can the owner immediately extract the
minerals and natural resources found in his land because of his surface rights ?

A. SURFACE RIGHTS do not include ownership of minerals found in the sub-surface of the
property. This is owned by the State even if the land has Torrens Title.

o Thus in Republic v. CA GR 43938, Apr. 15, 1988 – SC ruled : If a person is the owner of
agricultural land in which minerals are discovered, his ownership of such land does not give
him the right to extract or use the said minerals without the permission of the State to which
such minerals belong.

 REGALIAN DOCTRINE – the ownership of mines and natural resources is reserved to the
State; stressed in the Constitution and implemented in the Mining Law.

“ The exploration, development and utilization of natural resources shall be under the full
control and supervision of the State. (Art. XII, Sec. 2, 1987 PC) “

 The Regalian doctrine is intended for the benefit of the State, not for private persons. Mines
discovered underneath the land should belong to public dominion in as much as they are
properties for the development of the national wealth. (Art. 420 [2])

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Art. 438. Hidden treasure belongs to the owner of the land, building, or other property on
which it is found.
Nevertheless, when the discovery is made on the property of another, or of the State
or any of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If
the finder is a trespasser, he shall not be entitled to any share of the treasure.
If the things found be of interest to science or the arts, the State may acquire them at
their just price, which shall be divided in conformity with the rule stated.

Art. 439. By treasure is understood, for legal purposes, any hidden and unknown deposit of
money, jewelry, or other precious objects, the lawful ownership of which does not appear.

Q. What is “HIDDEN TREASURE” COVERED by Arts. 438 & 439?

A. HIDDEN TREASURE - any hidden and unknown deposit of money, jewelry, or other precious
objects, the lawful ownership of which does not appear.

Q. Where Hidden Treasure May be Found:

A. 1. Land 2. Building 3. Other Property

o However, this does not include property embedded in the soil, or is part of the soil like
minerals in their natural state (gold, diamond, oil, copper, etc. )

o Immovables (like a tomb) is excluded, but not the objects found inside the tomb, such as
those of interest to science or the arts.

Q. What are the requisites when a person finds hidden treasure in land, building or other property
not his?
1. The treasure must be hidden and unknown
2. There is no lawful owner
3. Discovery is by chance
4. Finder must not be a trespasser

RULES - IF HIDDEN TREASURE IS FOUND IN ONE’S PROPERTY, OR IN ANOTHER’S:

1. If an owner finds treasure in his property, who owns the treasure?

A. It fully belongs to the property owner, subject to the rule in Art. 438 that - If the things found
be of interest to science or the arts, the State may acquire them at their just price.

2. If a person finds hidden treasure by chance in a property not his, who owns the treasure?

A. ½ goes to the finder and ½ goes to the owner of the property.

Note: A trespasser who finds hidden treasure is not entitled to any share of the treasure.

3. If a usufructuary finds hidden treasure on the land or building he is using, is he entitled to any
share as finder?

A. Usufructuary gets ½ as finder, and the other half belongs to the naked owner.

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4. If another person (not the usufructuary) finds hidden treasure on the land or building subject of
usufructuary, is this person entitled to any share as finder?

A. If this third person is not a trespasser, he gets ½ of the treasure and the other ½ goes to
the naked owner. The usufructuary gets nothing as he does not own the land/building.

Note: The same rule applies to a tenant or lessee in similar cases.

Illustrate : Facts: A donated the naked title to his land to B; its usufructuary to C for 10 years. C while
digging in the land to make a well for his water supply, found a chest of antique jewelries and coins
whose ownership is unknown. Q. Who will share in the hidden treasure found by usufructuary C?

A. C gets ½ share as finder of the hidden treasure by chance (not because he is a usufructuary), and B the
other half as naked owner of the land.

5. If a laborer of the landowner finds hidden treasure in the landowners’s land by chance, will the
laborer-finder get any share?

A. The laborer/finder gets ½ and the other ½ goes to the landowner. But he gets nothing except
his salary if he was employed precisely to find the treasure.

6. If hidden treasure is found by chance in a municipal plaza, is the finder entitled to any share?
A. The finder gets ½ , and the other ½ goes to the municipality.
Note: But if the hidden treasure is scientifically or artistically valuable, the share of the finder
may be acquired by the State or the municipality at its just price. This acquisition is a form of
eminent domain or expropriation; thus, must follow similar expropriation proceedings if
voluntary sale is not agreed upon by the parties.

7. If the owner or finder is married, the treasure belongs to conjugal partnership or community
property of the owner or finder depending on their property relations. (Art. 154 – Family Code)

Illustrate:
a.) Husband “H married his wife “W” in 2000. H found hidden treasure in 2001 and his share was
P1M. Will this be part of H’s separate, or community property in the absence of any pre-nuptial
agreement between them?
b.) H married W in 2000. H & W signed a separation of property regime agreement upon advise of
W’s rich parents. H found hidden treasures in 2001 and his share was P10M. To whom will the
share of H belong?
c.) What if in case b, H found the hidden treasure in W’s own land but the ownership of the treasure
found cannot be established?

8. In an EXPRESS TREASURE HUNT, what is the sharing of the hidden treasure found between
property owner and finder?

A. The actual finder and the property owner shall share according to their contract or
agreement.

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 SUMMARY: OTHER RULES IF OWNER OF “HIDDEN TREASURE” IS KNOWN

1.) If lawful ownership of a hidden precious object is clear and can be identified and proved, the
same cannot be considered as “hidden treasure” even if originally hidden and discovered by
another.

2.) If ownership of the treasure is known, but the owner is dead, the same will not be deemed
hidden treasure. This must be given to the lawful heirs.

If no legal heir exists, then it shall belong to the State, as part of its patrimonial property.

o EXCEPTION: If the true owner has forgotten where he kept the treasure and has
abandoned or given up hope to find the same, the object may now be considered hidden
treasure.

ILLUSTRATE:

Q. If X finds a precious movable property by chance but whose ownership is known and not
abandoned, will the finder in good faith get anything?

A. No, the finder even if in good faith will not get any share in the treasure he found. This is not
the hidden treasure contemplated by Art. 438.

o However, Arts. 719 & 720 of the Civil Code may be applied in this case.
Art. 720 obliges the owner of a movable property lost to award the finder 1/10 (or 10%) of
the sum/price of the thing found.

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