Moralidad v. Pernes

5/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 497
G.R. No. 152809. August 3, 2006.*
MERCEDES MORALIDAD, petitioner, vs. SPS.

DIOSDADO PERNES and ARLENE PERNES,
respondents.
Usufruct; Words and Phrases; Usufruct, in essence, is nothing

else but simply allowing one to enjoy another’s property—it is also
defined as the right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi, with the owner
retaining the jus disponendi or the power to alienate the same.—
The Court is inclined to agree with the CA that what was
constituted between the parties herein is one of usufruct over a
piece of land, with the petitioner being the owner of the property
upon whom the naked title thereto remained and the respondents
being two (2) among other unnamed usufructuaries who were
simply referred to as petitioner’s kin. The Court, however, cannot
go along with the CA’s holding that the action for unlawful
detainer must be dismissed on ground of prematurity. Usufruct is
defined under Article 562 of the Civil Code in the following wise:
ART. 562. Usufruct gives a right to enjoy the property of another
with the obligation of preserving its form and substance, unless
the title constituting it or the law otherwise provides. Usufruct, in
essence, is nothing else but simply allowing one to enjoy another’s
property. It is also defined as the right to enjoy the property of
another temporarily, including both the jus utendi and the jus
fruendi, with the owner retaining the jus disponendi or the power
to alienate the same.
Same; The term or period of the usufruct originally specified
provides only one of the bases for the right of a usufructuary to
hold and retain possession of the thing given in usufruct.—We
disagree with the CA’s conclusion of law on the matter. The term
or period of the usufruct originally specified provides only one of
the bases for the right of a usufructuary to hold and retain
possession of the thing given in usufruct. There are other modes
or instances whereby the usufruct shall be considered terminated
or extinguished. For sure, the Civil Code enumerates such other
modes of extinguishment: ART. 603. Usufruct is extinguished:
central.com.ph/sfsreader/session/00000172231ecaccdfc22f61003600fb002c009e/t/?o=False 1/16
(1) By the death of the usufructuary, unless a contrary intention

clearly appears; (2) By expira-
_______________
* SECOND DIVISION.
533
VOL. 497, AUGUST 3, 2006 533
Moralidad vs. Parnes
tion of the period for which it was constituted, or by the

fulfillment of any resolutory condition provided in the
title creating the usufruct; (3) By merger of the usufruct and
ownership in the same person; (4) By renunciation of the
usufructuary; (5) By the total loss of the thing in usufruct; (6) By
the termination of the right of the person constituting the
usufruct; (7) By prescription.
Same; By express provision of law, the usufructuaries do not
have the right to reimbursement for the improvements they may
have introduced on the property.—The relationship between the
petitioner and respondents respecting the property in question is
one of owner and usufructuary. Accordingly, respondents’ claim
for reimbursement of the improvements they introduced on the
property during the effectivity of the usufruct should be governed
by applicable statutory provisions and principles on usufruct. In
this regard, we cite with approval what Justice Edgardo Paras
wrote on the matter: If the builder is a usufructuary, his
rights will be governed by Arts. 579 and 580. In case like
this, the terms of the contract and the pertinent provisions of law
should govern (3 Manresa 215-216; se also Montinola vs. Bantug,
71 Phil. 449). (Emphasis ours.) By express provision of law,
respondents, as usufructuary, do not have the right to
reimbursement for the improvements they may have introduced
on the property. We quote Articles 579 and 580 of the Civil Code:
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
therefor. He may, however, remove such improvements, should
it be possible to do so without damage to the property. (Emphasis
supplied.) Art. 580. The usufructuary may set off the
improvements he may have made on the property against any

damage to the same.
Same; If the rule on reimbursement or indemnity were
otherwise, then the usufructuary might improve the owner out of
his property.—Given the foregoing perspective, respondents will
have to be ordered to vacate the premises without any right of
reimbursement. If the rule on reimbursement or indemnity were
otherwise, then the usufructuary might, as an author pointed out,
improve the owner out of his property. The respondents may,
however, remove or destroy the improvements they may have
introduced thereon without damaging the petitioner’s property.
534
534 SUPREME COURT REPORTS ANNOTATED
Same; Equity; The disposition herein arrived is not only legal

and called for by the law and facts of the case—it is also right.—
Out of the generosity of her heart, the petitioner has allowed the
respondent spouses to use and enjoy the fruits of her property for
quite a long period of time. They opted, however, to repay a noble
gesture with unkindness. At the end of the day, therefore, they
really cannot begrudge their aunt for putting an end to their right
of usufruct. The disposition herein arrived is not only legal and
called for by the law and facts of the case. It is also right.
PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Fajardo, Ruiz-Valenzuela Law Firm for petitioner.
Arnel C. Gonzales for respondents.
GARCIA, J.:
Under consideration is this petition for review on
certiorari under Rule 45 of the Rules of Court to nullify and
set aside the following issuances of the Court of Appeals
(CA) in CA-G.R. SP No. 61610, to wit:

1. Decision dated September 27, 2001,1 affirming an earlier

decision of the Regional Trial Court (RTC) of Davao City which
reversed that of the Municipal Trial Court in Cities (MTCC),
Davao City, Branch 1, in an action for unlawful detainer thereat
commenced by the petitioner against the herein respondents; and
2. Resolution dated February 28, 2002,2 denying petitioner’s

motion for reconsideration.
_______________
1 Penned by Associate Justice Remedios A. Salazar-Fernando with

then Associate Justice Romeo A. Brawner (now ret.) and Associate Justice
Mariano C. Del Castillo, concurring; Rollo, pp. 51-58.
2 Id., at pp. 59-64.
535
VOL. 497, AUGUST 3, 2006 535

At the heart of this controversy is a parcel of land

located in Davao City and registered in the name of
petitioner Mercedes Moralidad under Transfer Certificate
of Title (TCT) No. T-123125 of the Registry of Deeds of
Davao City.
In her younger days, petitioner taught in Davao City,
Quezon City and Manila. While teaching in Manila, she
had the good fortune of furthering her studies at the
University of Pennsylvania, U.S.A. While schooling, she
was offered to teach at the Philadelphia Catholic
Archdiocese, which she did for seven (7) years. Thereafter,
she worked at the Mental Health Department of said
University for the next seventeen (17) years.
During those years, she would come home to the
Philippines to spend her two-month summer vacation in
her hometown in Davao City. Being single, she would
usually stay in Mandug, Davao City, in the house of her
niece, respondent Arlene Pernes, a daughter of her younger
sister, Rosario.
Back in the U.S.A. sometime in 1986, she received news
from Arlene that Mandug at the outskirts of Davao City
was infested by NPA rebels and many women and children
were victims of crossfire between government troops and
the insurgents. Shocked and saddened about this
development, she immediately sent money to Araceli,
Arlene’s older sister, with instructions to look for a lot in
Davao City where Arlene and her family could transfer and
settle down. This was why she bought the parcel of land
covered by TCT No. T-123125.
Petitioner acquired the lot property initially for the
purpose of letting Arlene move from Mandug to Davao City
proper but later she wanted the property to be also

available to any of her kins wishing to live and settle in
Davao City. Petitioner made known this intention in a
document she executed on July 21, 1986.3 The document
reads:
_______________
3 Id., at p. 65.
536

I, MERCEDES VIÑA MORALIDAD, of legal age, single,

having been born on the 29th day of January, 1923, now actually
residing at 8021 Lindbergh Boulevard, Philadelphia,
Pennsylvania, U.S.A., wishes to convey my honest intention
regarding my properties situated at Palm Village Subdivision,
Bajada, Davao City, 9501, … and hereby declare:
1. That it is my desire that Mr. and Mrs. Diosdado M.
Pernes may build their house therein and stay as long as
they like;
2. That anybody of my kins who wishes to stay on the
aforementioned real property should maintain an
atmosphere of cooperation, live in harmony and must avoid
bickering with one another;
3. That anyone of my kins may enjoy the privilege to
stay therein and may avail the use thereof. Provided,
however, that the same is not inimical to the purpose
thereof;
4. That anyone of my kins who cannot conform with the
wishes of the undersigned may exercise the freedom to look
for his own;
5. That any proceeds or income derived from the
aforementioned properties shall be allotted to my nearest
kins who have less in life in greater percentage and lesser
percentage to those who are better of in standing.
x x x x x x x x x
Following her retirement in 1993, petitioner came back

to the Philippines to stay with the respondents’ on the
house they build on the subject property. In the course of
time, their relations turned sour because members of the
Pernes family were impervious to her suggestions and
attempts to change certain practices concerning matters of

health and sanitation within their compound. For instance,
Arlene’s eldest son, Myco Pernes, then a fourth year
veterinary medicine student, would answer petitioner back
with clenched fist and at one time hurled profanities when
she corrected him. Later, Arlene herself followed suit.
Petitioner brought the matter to the local barangay lupon
where she lodged a complaint for slander, harassment,
threat and defamation against the Pernes
537
VOL. 497, AUGUST 3, 2006 537

Family. Deciding for petitioner, the lupon apparently

ordered the Pernes family to vacate petitioner’s property
but not after they are reimbursed for the value of the house
they built thereon. Unfortunately, the parties could not
agree on the amount, thus prolonging the impasse between
them.
Other ugly incidents interspersed with violent
confrontations meanwhile transpired, with the petitioner
narrating that, at one occasion in July 1998, she sustained
cuts and wounds when Arlene pulled her hair, hit her on
the face, neck and back, while her husband Diosdado held
her, twisting her arms in the process.
Relations having deteriorated from worse to worst,
petitioner, on July 29, 1998, lodged a formal complaint
before the Regional Office of the Ombudsman for
Mindanao, charging the respondent spouses, who were
both government employees, with conduct unbecoming of
public servants. This administrative case, however, did not
prosper.
Then, on August 3, 1998, petitioner filed with the MTCC
of Davao City an unlawful detainer suit against the
respondent spouses. Petitioner alleged that she is the
registered owner of the land on which the respondents built
their house; that through her counsel, she sent the
respondent spouses a letter demanding them to vacate the
premises and to pay rentals therefor, which the
respondents refused to heed.
In their defense, the respondents alleged having entered
the property in question, building their house thereon and
maintaining the same as their residence with petitioner’s
full knowledge and express consent. To prove their point,
they invited attention to her written declaration of July 21,

1986, supra, wherein she expressly signified her desire for
the spouses to build their house on her property and stay
thereat for as long as they like.
The MTCC, resolving the ejectment suit in petitioner’s
favor, declared that the respondent spouses, although
builders in good faith vis-à-vis the house they built on her
property, cannot invoke their bona fides as a valid excuse
for not com-
538

plying with the demand to vacate. To the MTCC,

respondents’ continued possession of the premises turned
unlawful upon their receipt of the demand to vacate, such
possession being merely at petitioner’s tolerance, and sans
any rental. Accordingly, in its decision dated November 17,
1999,4 the MTCC rendered judgment for the petitioner, as
plaintiff therein, to wit:
“WHEREFORE, judgment is hereby rendered in favor of herein

plaintiff and against the defendants, as follows:
a) Directing the defendants, their agents and other
persons acting on their behalf to vacate the premises and to
yield peaceful possession thereof to plaintiff;
b) Ordering defendants to pay P2,000.00 a month from
the filing of this complaint until they vacate premises;
c) Sentencing defendants to pay the sum of
P120,000.005 as attorney’s fees and to pay the cost of suit.
Defendants counterclaim are hereby dismissed except with
respect to the claim for reimbursement of necessary and useful
expenses which should be litigated in an ordinary civil actions.”
(sic)
Dissatisfied, the respondent spouses appealed to the

RTC of Davao City.
In the meantime, petitioner filed a Motion for Execution
Pending Appeal. The motion was initially granted by the
RTC in its Order of February 29, 2000, but the Order was
later withdrawn and vacated by its subsequent Order
dated May 9, 20006 on the ground that immediate
execution of the appealed decision was not the prudent
course of action to take, consid-
_______________
4 Id., at pp. 33-42.

5 Later changed to P20,000.00 as per Order dated December 16, 1999 of
the Regional Trial Court of Davao City, Branch 1, rectifying the clerical
error found on page 10 of the Decision dated November 17, 1999 in Civil
Case No. 5938-A-98.
6 Rollo, p. 44.
539
VOL. 497, AUGUST 3, 2006 539

ering that the house the respondents constructed on the

subject property might even be more valuable than the
land site.
Eventually, in a decision7 dated September 30, 2000, the
RTC reversed that of the MTCC, holding that respondents’
possession of the property in question was not, as ruled by
the latter court, by mere tolerance of the petitioner but
rather by her express consent. It further ruled that Article
1678 of the Civil Code on reimbursement of improvements
introduced is inapplicable since said provision
contemplates of a lessor-lessee arrangement, which was not
the factual milieu obtaining in the case. Instead, the RTC
ruled that what governed the parties’ relationship are
Articles 448 and 546 of the Civil Code, explaining thus:
“Since the defendants-appellees [respondents] are admittedly

possessors of the property by permission from plaintiff
[petitioner], and builders in good faith, they have the right to
retain possession of the property subject of this case until they
have been reimbursed the cost of the improvements they have
introduced on the property.
Indeed, this is a substantive right given to the defendants by
law, and this right is superior to the procedural right to [sic]
plaintiff to immediately ask for their removal by a writ of
execution by virtue of a decision which as we have shown is
erroneous, and therefore invalid.” (Words in brackets supplied),
and accordingly dismissed petitioner’s appeal, as follows:
“WHEREFORE, in view of the foregoing, the Decision appealed

from is REVERSED and declared invalid. Consequently, the
motion for execution pending appeal is likewise denied.
Counter-claims of moral and exemplary damages claimed by

defendants are likewise dismissed. However, attorney’s fees in the
amount of fifteen thousand pesos is hereby awarded in favor of
defendants-appellants, and against plaintiffs.
SO ORDERED.”8
_______________
7 Id., at pp. 45-50

8 Id., at p. 50.
540

Therefrom, petitioner went to the CA in CA-G.R. SP No.

61610.
On September 27, 2001, the CA, while conceding the
applicability of Articles 448 and 546 of the Civil Code to the
case, ruled that it is still premature to apply the same
considering that the issue of whether respondents’ right to
possess a portion of petitioner’s land had already expired or
was already terminated was not yet resolved. To the CA,
the unlawful detainer suit presupposes the cessation of
respondents’ right to possess. The CA further ruled that
what governs the rights of the parties is the law on
usufruct but petitioner failed to establish that respondents’
right to possess had already ceased. On this premise, the
CA concluded that the ejectment suit instituted by the
petitioner was premature. The appellate court thus
affirmed the appealed RTC decision, disposing:
“WHEREFORE, premises considered, the instant petition for

review is hereby denied for lack of merit. Accordingly, the
petitioner’s complaint for Unlawful Detainer is DISMISSED.
SO ORDERED.”
With the CA’s denial of her motion for reconsideration in

its Resolution of February 28, 2002, petitioner is now
before this Court raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS ERRED

IN DISMISSING THE UNLAWFUL DETAINER CASE FOR
BEING PREMATURE WHICH DECISION IS NOT IN
ACCORDANCE WITH LAW AND JURISPRUDENCE.
II. WHETHER OR NOT THE COURT OF APPEALS ERRED

IN APPLYING ARTICLES 448 AND 546 AND THE
PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF
ARTICLE 1678 OF THE CIVIL CODE.
The Court rules for the petitioner.

The Court is inclined to agree with the CA that what
was constituted between the parties herein is one of
usufruct over a piece of land, with the petitioner being the
owner of the
541
VOL. 497, AUGUST 3, 2006 541

property upon whom the naked title thereto remained and

the respondents being two (2) among other unnamed
usufructuaries who were simply referred to as petitioner’s
kin. The Court, however, cannot go along with the CA’s
holding that the action for unlawful detainer must be
dismissed on ground of prematurity.
Usufruct is defined under Article 562 of the Civil Code
in the following wise:
“ART. 562. Usufruct gives a right to enjoy the property of

another with the obligation of preserving its form and substance,
unless the title constituting it or the law otherwise provides.”
Usufruct, in essence, is nothing else but simply allowing

one to enjoy another’s property.9 It is also defined as the
right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi,10 with
the owner retaining the jus disponendi or the power to
alienate the same.11
It is undisputed that petitioner, in a document dated
July 21, 1986, supra, made known her intention to give
respondents and her other kins the right to use and to
enjoy the fruits of her property. There can also be no
quibbling about the respondents being given the right “to
build their own house” on the property and to stay thereat
“as long as they like.” Paragraph #5 of the same document
earmarks “proceeds or income derived from the
aforementioned properties” for the petitioner’s “nearest kins
who have less in life in greater percentage and lesser
percentage to those who are better of (sic) in standing.” The
established facts undoubtedly gave respondents not only

the right to use the property but also granted
_______________
9 Hemedes vs. Court of Appeals, G.R. No. 107132, October 8, 1999, 316
SCRA 309.
10 Eleizegui vs. Manila Lawn Tennis Club, 2 Phil. 309 (1909); cited in
De Leon & De Leon, Jr., Comments & Cases on Property, 2003 ed., p. 397.
11 Art. 581, Civil Code.
542

them, among the petitioner’s other kins, the right to

enjoy the fruits thereof. We have no quarrel, therefore,
with the CA’s ruling that usufruct was constituted between
petitioner and respondents. It is thus pointless to discuss
why there was no lease contract between the parties.
However, determinative of the outcome of the ejectment
case is the resolution of the next issue, i.e., whether the
existing usufruct may be deemed to have been extinguished
or terminated. If the question is resolved in the affirmative,
then the respondents’ right to possession, proceeding as it
did from their right of usufruct, likewise ceased. In that
case, petitioner’s action for ejectment in the unlawful
detainer case could proceed and should prosper.
The CA disposed of this issue in this wise:
x x x Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as

amended, provides x x x
x x x x x x x x x
From the foregoing provision, it becomes apparent that for an
action for unlawful detainer to prosper, the plaintiff [petitioner]
needs to prove that defendants’ [respondents’] right to possess
already expired and terminated. Now, has respondents’ right to
possess the subject portion of petitioner’s property expired or
terminated? Let us therefore examine respondents’ basis for
occupying the same.
It is undisputed that petitioner expressly authorized
respondents to occupy portion of her property on which their
house may be built. Thus—“it is my desire that Mr. and Mrs.
Diosdado M. Pernes may build their house therein and stay as
long as they like.” From this statement, it seems that petitioner
had given the respondents the usufructuary rights over the

portion that may be occupied by the house that the latter would
build, the duration of which being dependent on how long
respondents would like to occupy the property. While petitioner
had already demanded from the respondents the surrender of the
premises, this Court is of the opinion that the usufructuary rights
of respondents had not been terminated by the said demand
considering the clear statement of petitioner that she is allowing
respondents to occupy portion of her land as long as the
543
VOL. 497, AUGUST 3, 2006 543

latter want to. Considering that respondents still want to occupy

the premises, petitioner clearly cannot eject respondents.12
We disagree with the CA’s conclusion of law on the

matter. The term or period of the usufruct originally
specified provides only one of the bases for the right of a
usufructuary to hold and retain possession of the thing
given in usufruct. There are other modes or instances
whereby the usufruct shall be considered terminated or
extinguished. For sure, the Civil Code enumerates such
other modes of extinguishment:
ART. 603. Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary
intention clearly appears;
(2) By expiration of the period for which it was constituted, or
by the fulfillment of any resolutory condition provided in
the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same
person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting
the usufruct;
(7) By prescription. (Emphasis supplied.)
The document executed by the petitioner dated July 21,

1986 constitutes the title creating, and sets forth the
conditions of, the usufruct. Paragraph #3 thereof states
“[T]hat anyone of my kins may enjoy the privilege to stay
therein and may avail the use thereof. Provided, however,
that the same is not inimical to the purpose thereof”
(Emphasis supplied). What may be inimical to the purpose

constituting the usufruct may be gleaned from the
preceding paragraph wherein petitioner made it
abundantly clear “that anybody of my kins who wishes to
stay on the aforementioned property
_______________
12 Rollo, pp. 56-57.
544

should maintain an atmosphere of cooperation, live

in harmony and must avoid bickering with one
another.” That the maintenance of a peaceful and
harmonious relations between and among kin constitutes
an indispensable condition for the continuance of the
usufruct is clearly deduced from the succeeding Paragraph
#4 where petitioner stated “[T]hat anyone of my kins who
cannot conform with the wishes of the undersigned
may exercise the freedom to look for his own.” In fine, the
occurrence of any of the following: the loss of the
atmosphere of cooperation, the bickering or the cessation of
harmonious relationship between/among kin constitutes a
resolutory condition which, by express wish of the
petitioner, extinguishes the usufruct.
From the pleadings submitted by the parties, it is
indubitable that there were indeed facts and circumstances
whereby the subject usufruct may be deemed terminated or
extinguished by the occurrence of the resolutory conditions
provided for in the title creating the usufruct, namely, the
document adverted to which the petitioner executed on
July 21, 1986.
As aptly pointed out by the petitioner in her
Memorandum, respondents’ own evidence before the MTCC
indicated that the relations between the parties “have
deteriorated to almost an irretrievable level.”13 There is no
doubt then that what impelled petitioner to file complaints
before the local barangay lupon, the Office of the
Ombudsman for Mindanao, and this instant complaint for
unlawful detainer before the MTCC is that she could not
live peacefully and harmoniously with the Pernes family
and vice versa.
Thus, the Court rules that the continuing animosity

between the petitioner and the Pernes family and the
violence and humiliation she was made to endure, despite
her advanced age and frail condition, are enough factual
bases to consider the usufruct as having been terminated.
_______________
13 Id., at p. 185.
545
VOL. 497, AUGUST 3, 2006 545

To reiterate, the relationship between the petitioner and

respondents respecting the property in question is one of
owner and usufructuary. Accordingly, respondents’ claim
for reimbursement of the improvements they introduced on
the property during the effectivity of the usufruct should be
governed by applicable statutory provisions and principles
on usufruct. In this regard, we cite with approval what
Justice Edgardo Paras wrote on the matter:
If the builder is a usufructuary, his rights will be

governed by Arts. 579 and 580. In case like this, the terms of
the contract and the pertinent provisions of law should govern (3
Manresa 215-216; se also Montinola vs. Bantug, 71 Phil. 449).14
(Emphasis ours.)
By express provision of law, respondents, as

usufructuary, do not have the right to reimbursement for
the improvements they may have introduced on the
property. We quote Articles 579 and 580 of the Civil Code:
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
therefor. He may, however, remove such improvements, should
it be possible to do so without damage to the property. (Emphasis
supplied.)
Art. 580. The usufructuary may set off the improvements he
may have made on the property against any damage to the same.
Given the foregoing perspective, respondents will have

to be ordered to vacate the premises without any right of
reimbursement. If the rule on reimbursement or indemnity

were otherwise, then the usufructuary might, as an author
pointed out, improve the owner out of his property.15 The
respondents
_______________
14 Paras, Civil Code of the Philippines Annotated, Vol. II, 13th Ed.
(1994), p. 211.
15 De Leon & De Leon, Jr., Comments & Cases on Property, 2003 ed., p.
417.
546

may, however, remove or destroy the improvements they

may have introduced thereon without damaging the
petitioner’s property.
Out of the generosity of her heart, the petitioner has
allowed the respondent spouses to use and enjoy the fruits
of her property for quite a long period of time. They opted,
however, to repay a noble gesture with unkindness. At the
end of the day, therefore, they really cannot begrudge their
aunt for putting an end to their right of usufruct. The
disposition herein arrived is not only legal and called for by
the law and facts of the case. It is also right.
WHEREFORE, the petition is GRANTED. The assailed
Decision and Resolution of the CA are REVERSED and
SET ASIDE. Accordingly, the decision of the MTCC is
REINSTATED with MODIFICATION that all of
respondents’ counterclaims are dismissed, including
their claims for reimbursement of useful and necessary
expenses.
No pronouncement as to costs.
SO ORDERED.
Puno (Chairman), Sandoval-Gutierrez, Corona and

Azcuna, JJ., concur.
Petition granted, assailed decision and resolution

reversed and set aside. That of the MTCC reinstated with
modification.
Note.—The annotation of usufructuary rights in a

certificate of title in favor of another does not impose upon
the mortgagee the obligation to investigate the validity of
its mortgagor’s title. In a usufruct, only the jus utendi and
jus fruendi over the property is transferred to the
usufructuary—the owner of the property maintains the jus
disponendi or the power to alienate, encumber, transform,
and even destroy the same. (Hemedes vs. Court of Appeals,
316 SCRA 347 [1999])
——o0o——
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5/17/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 497

G.R. No. 152809. August 3, 2006.*

MERCEDES MORALIDAD, petitioner, vs. SPS.

Usufruct; Words and Phrases; Usufruct, in essence, is nothing

(1) By the death of the usufructuary, unless a contrary intention

VOL. 497, AUGUST 3, 2006 533

Moralidad vs. Parnes

tion of the period for which it was constituted, or by the

improvements he may have made on the property against any

534 SUPREME COURT REPORTS ANNOTATED

Moralidad vs. Parnes

Same; Equity; The disposition herein arrived is not only legal

PETITION for review on certiorari of the decision and

1. Decision dated September 27, 2001,1 affirming an earlier

2. Resolution dated February 28, 2002,2 denying petitioner’s

1 Penned by Associate Justice Remedios A. Salazar-Fernando with

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At the heart of this controversy is a parcel of land

proper but later she wanted the property to be also

536 SUPREME COURT REPORTS ANNOTATED

I, MERCEDES VIÑA MORALIDAD, of legal age, single,

Following her retirement in 1993, petitioner came back

attempts to change certain practices concerning matters of

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Family. Deciding for petitioner, the lupon apparently

they invited attention to her written declaration of July 21,

538 SUPREME COURT REPORTS ANNOTATED

plying with the demand to vacate. To the MTCC,

“WHEREFORE, judgment is hereby rendered in favor of herein

Dissatisfied, the respondent spouses appealed to the

4 Id., at pp. 33-42.

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ering that the house the respondents constructed on the

“Since the defendants-appellees [respondents] are admittedly

and accordingly dismissed petitioner’s appeal, as follows:

“WHEREFORE, in view of the foregoing, the Decision appealed

Counter-claims of moral and exemplary damages claimed by

7 Id., at pp. 45-50

540 SUPREME COURT REPORTS ANNOTATED

Therefrom, petitioner went to the CA in CA-G.R. SP No.

“WHEREFORE, premises considered, the instant petition for

With the CA’s denial of her motion for reconsideration in

I. WHETHER OR NOT THE COURT OF APPEALS ERRED

II. WHETHER OR NOT THE COURT OF APPEALS ERRED

The Court rules for the petitioner.

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property upon whom the naked title thereto remained and

“ART. 562. Usufruct gives a right to enjoy the property of

Usufruct, in essence, is nothing else but simply allowing

established facts undoubtedly gave respondents not only

542 SUPREME COURT REPORTS ANNOTATED

them, among the petitioner’s other kins, the right to

x x x Section 1, Rule 70 of the 1997 Rules of Civil Procedure, as

had given the respondents the usufructuary rights over the

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latter want to. Considering that respondents still want to occupy

We disagree with the CA’s conclusion of law on the

ART. 603. Usufruct is extinguished:

The document executed by the petitioner dated July 21,

(Emphasis supplied). What may be inimical to the purpose

12 Rollo, pp. 56-57.

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should maintain an atmosphere of cooperation, live

Thus, the Court rules that the continuing animosity