You are on page 1of 20

PROPERTY

Pre-final Reviewer

Art. 484. There is co-ownership whenever the ownership of 2) Without prejudice to the interest of the co-ownership
an undivided thing or right belongs to different persons. 3) Without preventing the other co-owners from making use
In default of contracts, or of special provisions, co- thereof according to their own rights.
ownership shall be governed by the provisions of this
Title. (392) Purpose – to be determined by the agreement, express/implied,
by the parties [may be changed].
Sanchez Roman [the greatest Spanish Civil Law commentator] - In default – purpose is that to which the property is ordinarily
right of common dominion which two or more persons have in a adapted according to its nature or use to which it has been
spiritual part of thing, not materially or physically divided. previously devoted.

Characteristics of Co-ownership Prescription of Use – mere tolerance on the part of co-owners


A. Plurality of Subjects – Co-owners cannot legalize the change in the use of a thing from that
B. Unity of or Material Indivision – there is a single obj. which intended by the parties. Mere tolerance cannot be a basis of
is not materially divided and which is the element which prescription [Manresa].
binds the subjects.
C. Recognition of Ideal Shares – determines the rights and Co-owner cannot devote community property to his exclusive use
obligations of the co-owners. to the prejudice of the co-ownership.
*Relationship of Co-owners is fiduciary in character such that *if lease is agreed – cannot retain property for his use without
each co-owner becomes trustee for the benefit of his co-owners. rent.
*if occupied exclusively for exploitation of an industry – other co-
Causes of Co-ownership owners become co-participants in the accessions of the property
1. Law and should share in the net profits thereof.
2. Contracts
3. Succession Co-owners may establish rules in the in their use of the thing
4. Fortuitous Event or Chance owned in common. In default thereof, there should be a just and
5. Occupancy equitable distribution of its uses among all co-owners.

*Co-ownership may exist as to rights and is not limited to The right of enjoyment by each co-owner is limited by a similar
corporeal things. right of the others. Hence, if the thing is a dwelling, all co-owner
may live therein.
CO-OWNERSHIP PARTNERSHIP
May arise from various causes Created only by agreement or If one occupies without opposition of the others and there is no
[see above] contract agreement to lease the property, no rentals can be demanded.
Purpose is merely collective Usually to obtain profit.
enjoyment and to maintain Art. 487. Any one of the co-owners may bring an action in
unity and preservation of the ejectment. (n)
thing owned in common.
Covers all kinds of actions for the recovery of possession,
No separate juridical There is juridical personality
including FE and UD, the accion publiciana and reivindicatoria
personality. separate and distinct from the
[suit is deemed instituted for all].
members.
Special authorization is There is generally mutual
Favorable Decision – bind all co-owners
required for mutual representation by the partners.
Adverse Decision – will not be binding on all
representation.
*if a co-owner knows action is being instituted alone by a co-
There is freedom of disposition Cannot transfer rights to 3rd
owner, he shall be bound by the decision – Tolentino
of a co-owner’s share. persons without the consent of
the others.
If action is for the benefit of a co-owner alone [i.e. claims the
Death of co-owner does not Death or incapacity of a partner possession himself and not the co-ownership] action will not
extinguish the co-ownership. can lead to the extinguishment prosper.
of the partnership.
Distribution of profits governed Profits may be distributed in Ejectment Against Another Co-owner – i.e. if co-owner takes
by Art. 485. accordance with stipulations. exclusive possession of the property and asserts ownership – the
only effect will be the recognition of the co-ownership [defendant
Art. 485. The share of the co-owners, in the benefits as well cannot be excluded and plaintiff cannot recover any material or
as in the charges, shall be proportional to their respective determinate part of the property].
interests. Any stipulation in a contract to the contrary shall
be void. Art. 488. Each co-owner shall have a right to compel the
The portions belonging to the co-owners in the co-ownership other co-owners to contribute to the expenses of
shall be presumed equal, unless the contrary is preservation of the thing or right owned in common and to
proved. (393a) the taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest
Accretion added to a land owned in common becomes part of the as may be equivalent to his share of the expenses and taxes.
property in co-ownership. No such waiver shall be made if it is prejudicial to the co-
ownership. (395a)
Art. 486. Each co-owner may use the thing owned in
common, provided he does so in accordance with the Refers to taxes and expenses for preservation [does not cover
purpose for which it is intended and in such a way as not to those merely produce benefits, mere luxury, embellishment,
injure the interest of the co-ownership or prevent the other pleasure].
co-owners from using it according to their rights. The
purpose of the co-ownership may be changed by agreement, Expenses for Preservation – those w/c if not made would
express or implied. (394a) endanger the existence of the thing or reduce its value or
Limitations on Co-owner’s Rights productivity.
1) To the purpose for which it is intended
1|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

Expenses advanced by (1) co-owner should be borne by all. Co-owner who caused alteration without consent is liable to
remove/demolish the alteration at his own cost [if still possible]
If co-owner does not pay his share – bring an action to compel with damages. Whatever is useful to the co-ownership should
him to contribute – but you cannot compel him to renounce belong to it.
[renunciation is a voluntary and free act].
*UNANIMOUS consent is required for all acts of ownership.[i.e.
Renunciation – must be of an amount EQUIVALENT to his share in impose easement].
the expenses and taxes; must be EXPRESSLY made.
*NOT allowed if PREJUDICIAL to the co-owneship. Art. 492. For the administration and better enjoyment of the
*actually dacion en pago; valuation – at the time renunciation is thing owned in common, the resolutions of the majority of
made. the co-owners shall be binding.
There shall be no majority unless the resolution is approved
Art. 489. Repairs for preservation may be made at the will of by the co-owners who represent the controlling interest in
one of the co-owners, but he must, if practicable, first notify the object of the co-ownership.
his co-owners of the necessity for such repairs. Expenses to Should there be no majority, or should the resolution of the
improve or embellish the thing shall be decided upon by a majority be seriously prejudicial to those interested in the
majority as determined in Article 492. (n) property owned in common, the court, at the instance of an
interested party, shall order such measures as it may deem
Related to the previous article. proper, including the appointment of an administrator.
Authorizes any co-owner to advance the expenses for Whenever a part of the thing belongs exclusively to one of the
preservation. co-owners, and the remainder is owned in common, the
preceding provision shall apply only to the part owned in
If practicable, he is required to give notice to his co-owners of the common. (398)
necessity of the repairs but he is not required to obtain their
consent. Acts of Administration [Characteristics]
*those who oppose thereby impeding the repair of the property 1. Refer to the enjoyment and preservation of the thing.
are liable for the damage caused. 2. They have transitory effects.

Failure to give notice when practicable – still entitled to recover ADMINISTRATION ALTERATION
but is burdened to prove necessity of repairs and reasonableness Refer to enjoyment of a thing. Relate to the substance or form
of costs. of the thing.
Transitory in character. More permanent in nature.
Art. 490. Whenever the different stories of a house belong to
different owners, if the titles of ownership do not specify the Leases of Immovable Property
terms under which they should contribute to the necessary If lease is to be recorded in the Registry of Property – acts of
expenses and there exists no agreement on the subject, the alteration.
following rules shall be observed:
(1) The main and party walls, the roof and the other things Special Power of Atty Required for Leases of Real Property
used in common, shall be preserved at the expense of all the a. When lease is to be recorded in the Registry
owners in proportion to the value of the story belonging to b. Lease is more than 1 year
each; *in these two cases mere majority cannot constitute lease.
(2) Each owner shall bear the cost of maintaining the floor of
his story; the floor of the entrance, front door, common yard Majority – in interest [not in number].
and sanitary works common to all, shall be maintained at the
expense of all the owners pro rata; Management of the Property
(3) The stairs from the entrance to the first story shall be 1. Co-owners themselves
maintained at the expense of all the owners pro rata, with the 2. May be delegated to other persons [governed by the rules
exception of the owner of the ground floor; the stairs from on agency].
the first to the second story shall be preserved at the expense 3. If no majority, or when seriously prejudicial, court may
of all, except the owner of the ground floor and the owner of appoint [powers and duties defined by appointment].
the first story; and so on successively. (396)
Instances When Minority may Complain Against Resolution of the
Art. 491. None of the co-owners shall, without the consent of
Majority
the others, make alterations in the thing owned in common,
1. Substantial change or alteration of the property/use to
even though benefits for all would result therefrom.
which it has been dedicated by its nature and agreement
However, if the withholding of the consent by one or more of
2. Goes beyond the limits of mere administration or invades
the co-owners is clearly prejudicial to the common interest,
proprietary rights of co-owners
the courts may afford adequate relief. (397a)
3. Majority authorizes leases, loans, or other contracts
without security, exposing the thing to serious danger
Alteration – change in the thing from the state in w/c the others
4. Majority refuses to dismiss administrator who is guilty of
believe it should remain, or withdrawing it from the use to w/c
fraud or negligence or is unqualified.
they desire it to be intended [not limited to material changes, but
5. Resolution if carried out would cause serious injury to the
includes changes in the use from that expressly or tacitly agreed
thing itself.
upon].
Art. 493. Each co-owner shall have the full ownership of his
Article refers to alterations/transformations w/c change the part and of the fruits and benefits pertaining thereto, and he
essence and nature of the thing – requiring the UNANIMOUS may therefore alienate, assign or mortgage it, and even
consent of all the co-owners [if merely affects the better substitute another person in its enjoyment, except when
enjoyment of the thing – MAJORITY is required]. personal rights are involved. But the effect of the alienation
or the mortgage, with respect to the co-owners, shall be
Consent may either be EXPRESS or TACIT [knowledge w/out
objection].
2|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

limited to the portion which may be alloted to him in the 3. Evidence thereon must be clear and convincing.
division upon the termination of the co-ownership. (399) Art. 495. Notwithstanding the provisions of the preceding
article, the co-owners cannot demand a physical division of
Co-owner can validly sell and dispose of or lease his undivided the thing owned in common, when to do so would render it
interest. unserviceable for the use for which it is intended. But the co-
The sale or other disposition affects only his undivided share, and ownership may be terminated in accordance with Article
the transferee gets only what would correspond to his grantor in 498. (401a)
the partition of the co-owned property.
With EXPRESS consent from other co-owners, 1 co-owner can Art. 496. Partition may be made by agreement between the
alienate or encumber any definite or specific portion, without parties or by judicial proceedings. Partition shall be
segregating it as independent property [in the event of poartition, governed by the Rules of Court insofar as they are consistent
the delimited portion shall form part of what may finally be with this Code. (402)
allotted to such co-owner].
Partition may be made ORALLY or IN WRITING.
Co-owner cannot alienate his rights which are purely personal [his Oral Partition is valid and enforcement upon the parties [Statute
share in a right to use and habitation]. of Frauds has no operation].
Neither can he make a disposition which would give the thing a
different use from that agreed upon. Principal Issues in Partition
1. W.O.N. plaintiff is co-owner.
RIGHT OF LEGAL REDEMPTION [Requisites] *Rabuya 2. How property is to be divided.
1. There must be co-ownership
2. One of the co-owners sold his right to a stranger Art. 497. The creditors or assignees of the co-owners may
3. Sale was made before partition take part in the division of the thing owned in common and
4. Exercised within 30 days from notice [or actual knowledge] object to its being effected without their concurrence. But
5. Vendee reimbursed for price of the sale they cannot impugn any partition already executed, unless
there has been fraud, or in case it was made notwithstanding
a formal opposition presented to prevent it, without
Art. 494. No co-owner shall be obliged to remain in the co- prejudice to the right of the debtor or assignor to maintain
ownership. Each co-owner may demand at any time the its validity. (403)
partition of the thing owned in common, insofar as his share
is concerned. All types of creditors included [the law does not distinguish].
Nevertheless, an agreement to keep the thing undivided for a *must be creditors DURING the co-ownership and not before or
certain period of time, not exceeding ten years, shall be valid. after.
This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which Althoug not expressly provided, NOTIFICATION must be made to
shall not exceed twenty years. creditors for partition to be binding on them [once notified, they
Neither shall there be any partition when it is prohibited by are bound to intervene].
law.
No prescription shall run in favor of a co-owner or co-heir Art. 498. Whenever the thing is essentially indivisible and
against his co-owners or co-heirs so long as he expressly or the co-owners cannot agree that it be allotted to one of them
impliedly recognizes the co-ownership. (400a) who shall indemnify the others, it shall be sold and its
proceeds distributed.(404)
TERMINATION OF CO-OWNERSHIP
1. Consolidation in only one of the owners of all other shares a.k.a. Juridical Dissolution
2. Destruction of the thing/loss of the right Thing is essentially INDIISIBLE.
3. Prescription IFO 3rd person First, adjudication to one of the o-owners [who pays the others
4. Partition the amount adjudged equitable].
Second, by the sale of the thing to 3rd persons [private/public
*mere agreement to subdivide is not enough [there must be sale].
subdivision plan drawn and co-owners actually occupying
respective portions, and titles issued accordingly]. Art. 499. The partition of a thing owned in common shall not
prejudice third persons, who shall retain the rights of
Mere fact that the partition may affect usefulness/value of the mortgage, servitude or any other real rights belonging to
whole is not an excuse for refusal to partition. them before the division was made. Personal rights
pertaining to third persons against the co-ownership shall
WHEN PARTITION IS NOT ALLOWED also remain in force, notwithstanding the partition. (405)
1. When co-owners agreed to continue with co-ownership for
period allowed by law [10 yrs., always renewable]. 3RD PERSONS - all those who do not intervene in the partition.
- If more than ten years the stipulation is void as
to the excess Art. 500. Upon partition, there shall be a mutual accounting
2. Co-ownership is imposed as a condition [in a for benefits received and reimbursements for expenses
donation/will]. made. Likewise, each co-owner shall pay for damages caused
3. By its nature the property cannot be legally divided [party by reason of his negligence or fraud. (n)
walls, conjugal partnership].
4. Partition will make thing unserviceable for use and purpose DE GUIA V CA
for w/c it is intended.
DE GUIA contends that a co-owner cannot claim a definite portion
IN ORDER THAT POSSESSION CONSIDERED ADVERSE from the property owned in common until there is a partition. DE
[REPUDIATION] GUIA argues that ABEJO should have filed an action for partition
1. That he has performed unequivocal acts of repudiation instead of recovery of possession since the court cannot
amounting to an ouster of the others implement any decision in the latter case without first a partition.
2. Positive acts of repudiation have been made known to the DE GUIA contends that an action for recovery of possession
other co-owners cannot prosper when the property subject of the action is part of

3|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

an undivided, co-owned property. The procedural mode adopted dominion. However, they are at the same time individual owners
by ABEJO, which is recovery of possession, makes enforcement of a ½ portion, which is truly abstract because until there is
difficult if not impossible since there is still no partition of the 21
partition, such portion remains indeterminate or unidentified. As
subject property. co-owners, ABEJO and DE GUIA may jointly exercise the right of
Under Article 484 of the Civil Code, "there is co-ownership dominion over the entire FISHPOND until they partition the
whenever the ownership of an undivided thing or right belongs to FISHPOND by identifying or segregating their respective portions.
different persons." A co-owner of an undivided parcel of land is an Since a co-ownership subsists between ABEJO and DE GUIA,
"owner of the whole, and over the whole he exercises the right of judicial or extra-judicial partition is the proper recourse. An action
dominion, but he is at the same time the owner of a portion which to demand partition is imprescriptible and not subject to
15 22
is truly abstract." On the other hand, there is no co-ownership laches. Each co-owner may demand at any time the partition of
when the different portions owned by different people are already the common property unless a co-owner has repudiated the co-
concretely determined and separately identifiable, even if not yet 23
ownership under certain conditions. Neither ABEJO nor DE GUIA
16
technically described. has repudiated the co-ownership under the conditions set by law.
Article 487 of the Civil Code provides, "[a]ny one of the co-owners To recapitulate, we rule that a co-owner may file an action for
may bring an action in ejectment." This article covers all kinds of recovery of possession against a co-owner who takes exclusive
actions for the recovery of possession. Article 487 includes possession of the entire co-owned property. However, the only
forcible entry and unlawful detainer (accion interdictal), recovery effect of such action is a recognition of the co-ownership. The
of possession (accion publiciana), and recovery of ownership courts cannot proceed with the actual partitioning of the co-
(accion de reivindicacion). The summary actions of forcible entry owned property. Thus, judicial or extra-judicial partition is
and unlawful detainer seek the recovery of physical possession necessary to effect physical division of the FISHPOND between
only. These actions are brought before municipal trial courts ABEJO and DE GUIA. An action for partition is also the proper
within one year from dispossession. However,accion forum for accounting the profits received by DE GUIA from the
publiciana, which is a plenary action for recovery of the right to FISHPOND. However, as a necessary consequence of such
possess, falls under the jurisdiction of the proper regional trial recognition, ABEJO shall exercise an equal right to possess, use
court when the dispossession has lasted for more than one and enjoy the entire FISHPOND.
year. Accion de reivindicacion, which seeks the recovery of DE GUIA further claims that the trial and appellate courts erred
ownership, also falls under the jurisdiction of the proper regional when they ordered the recovery of rent when the exact identity of
17
trial court. 1awphi1.nét the portion in question had not yet been clearly defined and
Any co-owner may file an action under Article 487 not only delineated. According to DE GUIA, an order to pay damages in the
against a third person, but also against another co-owner who form of rent is premature before partition.
takes exclusive possession and asserts exclusive ownership of the We disagree.
18 The right of enjoyment by each co-owner is limited by a similar
property. In the latter case, however, the only purpose of the
action is to obtain recognition of the co-ownership. The plaintiff right of the other co-owners. A co-owner cannot devote common
cannot seek exclusion of the defendant from the property because property to his exclusive use to the prejudice of the co-
24
as co-owner he has a right of possession. The plaintiff cannot ownership. Hence, if the subject is a residential house, all the
19 co-owners may live there with their respective families to the
recover any material or determinate part of the property.
In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria extent possible. However, if one co-owner alone occupies the
20
De La Cruz and Herminio De La Cruz, we reiterated the rule that entire house without opposition from the other co-owners, and
a co-owner cannot recover a material or determinate part of a there is no lease agreement, the other co-owners cannot demand
common property prior to partition as follows: the payment of rent. Conversely, if there is an agreement to lease
It is a basic principle in civil law that before a property owned in the house, the co-owners can demand rent from the co-owner
common is actually partitioned, all that the co-owner has is an who dwells in the house.
ideal or abstract quota or proportionate share in the entire The co-owners can either exercise an equal right to live in the
property. A co-owner has no right to demand a concrete, specific house, or agree to lease it. If they fail to exercise any of these
or determinate part of the thing owned in common because until options, they must bear the consequences. It would be unjust to
division is effected his right over the thing is represented only by require the co-owner to pay rent after the co-owners by their
25
an ideal portion. silence have allowed him to use the property.
As such, the only effect of an action brought by a co-owner In case the co-owners agree to lease a building owned in
against a co-owner will be to obtain recognition of the co- common, a co-owner cannot retain it for his use without paying
26
ownership; the defendant cannot be excluded from a specific the proper rent. Moreover, where part of the property is
portion of the property because as a co-owner he has a right to occupied exclusively by some co-owners for the exploitation of an
possess and the plaintiff cannot recover any material or industry, the other co-owners become co-participants in the
determinate part of the property. Thus, the courts a quo erred 27
accessions of the property and should share in its net profits.
when they ordered the delivery of one-half (½) of the building in The Lejano Heirs and Teofilo Abejo agreed to lease the entire
favor of private respondent. FISHPOND to DE GUIA. After DE GUIA’s lease expired in 1979, he
Indisputably, DE GUIA has been in exclusive possession of the could no longer use the entire FISHPOND without paying rent. To
entire FISHPOND since July 1974. Initially, DE GUIA disputed allow DE GUIA to continue using the entire FISHPOND without
ABEJO’s claim of ownership over the ½ undivided portion of the paying rent would prejudice ABEJO’s right to receive rent, which
FISHPOND. Subsequently, he implicitly recognized ABEJO’s ½ would have accrued to his ½ share in the FISHPOND had it been
undivided share by offering to settle the case for P300,000 and to 28
leased to others. Since ABEJO acquired his ½ undivided share in
vacate the property. During the trial proper, neither DE GUIA nor the FISHPOND on 22 November 1983, DE GUIA should pay ABEJO
ABEJO asserted or manifested a claim of absolute and exclusive reasonable rent for his possession and use of ABEJO’s portion
ownership over the entire FISHPOND. Before this Court, DE
1a\^/phi1.net

beginning from that date. The compensatory damages of P25,000


GUIA limits the issues to the propriety of bringing an action for per year awarded to ABEJO is the fair rental value or the
recovery of possession and the recovery of compensatory reasonable compensation for the use and occupation of the leased
damages. 29
Following the inherent and peculiar features of co-ownership, property, considering the circumstances at that time. DE GUIA
while ABEJO and DE GUIA have equal shares in the FISHPOND shall continue to pay ABEJO a yearly rent of P25,000
quantitatively speaking, they have the same right in a qualitative corresponding to ABEJO’s ½ undivided share in the FISHPOND.
sense as co-owners. Simply stated, ABEJO and DE GUIA are However, ABEJO has the option either to exercise an equal right
owners of the whole and over the whole, they exercise the right of to occupy the FISHPOND, or to file a new petition before the trial

4|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

court to fix a new rental rate in view of changed circumstances in because the ejectment of respondents would benefit not only him
the last 20 years. 1a\^/phi1.net but also his alleged co-owners. However, petitioner forgets that
ABEJO made an extrajudicial demand on DE GUIA by sending the he filed the instant case to acquire possession of the property and
27 November 1983 demand letter. Thus, the rent in arrears to recover damages. If granted, he alone will gain possession of
should earn interest at 6% per annum from 27 November 1983 the lot and benefit from the proceeds of the award of damages to
30 the exclusion of the heirs of Graciana. Hence, petitioner cannot
until finality of this decision pursuant to Article 2209 of the Civil
Code. Thereafter, the interest rate is 12% per annum from finality successfully capitalize on the alleged benefit to his co-owners.
of this decision until full payment.
31 Incidentally, it should be pointed out that in default of the said
heirs of Graciana, whom petitioner labeled as "fictitious heirs," the
31
ADLAWAN V ADLAWAN State will inherit her share and will thus be petitioner’s co-
owner entitled to possession and enjoyment of the property.
The renowned civilist, Professor Arturo M. Tolentino, explained – The present controversy should be differentiated from the cases
A co-owner may bring such an action, without the necessity of where the Court upheld the right of a co-owner to file a suit
joining all the other co-owners as co-plaintiffs, because the suit is pursuant to Article 487 of the Civil Code. In Resuena v. Court of
32 33
deemed to be instituted for the benefit of all. If the action is for Appeals, and Sering v. Plazo, the co-owners who filed the
the benefit of the plaintiff alone, such that he claims ejectment case did not represent themselves as the exclusive
possession for himself and not for the co-ownership, the owner of the property. In Celino v. Heirs of Alejo and Teresa
28 34
action will not prosper. (Emphasis added) Santiago, the complaint for quieting of title was brought in
29 behalf of the co-owners precisely to recover lots owned in
In Baloloy v. Hular, respondent filed a complaint for quieting of
35 36
title claiming exclusive ownership of the property, but the common. Similarly in Vencilao v. Camarenta, the amended
evidence showed that respondent has co-owners over the complaint specified that the plaintiff is one of the heirs who co-
property. In dismissing the complaint for want of respondent’s owns the controverted properties.
authority to file the case, the Court held that – In the foregoing cases, the plaintiff never disputed the existence
Under Article 487 of the New Civil Code, any of the co-owners of a co-ownership nor claimed to be the sole or exclusive owner of
may bring an action in ejectment. This article covers all kinds of the litigated lot. A favorable decision therein would of course inure
actions for the recovery of possession, including an accion to the benefit not only of the plaintiff but to his co-owners as well.
publiciana and a reinvidicatory action. A co-owner may bring such The instant case, however, presents an entirely different backdrop
an action without the necessity of joining all the other co-owners as petitioner vigorously asserted absolute and sole ownership of
as co-plaintiffs because the suit is deemed to be instituted for the the questioned lot. In his complaint, petitioner made the following
benefit of all. Any judgment of the court in favor of the co-owner allegations, to wit:
will benefit the others but if such judgment is adverse, the same 3. The plaintiff was the only son (illegitimate) and sole heir of
cannot prejudice the rights of the unimpleaded co-owners. If the the late DOMINADOR ADLAWAN who died intestate on 28 May
action is for the benefit of the plaintiff alone who claims to be the 1987 without any other descendant nor ascendant x x x.
sole owner and entitled to the possession thereof, the action will xxxx
not prosper unless he impleads the other co-owners who are 5. Being the only child/descendant and, therefore, sole heir of
indispensable parties. the deceased Dominador Adlawan, the plaintiff became the
In this case, the respondent alone filed the complaint, claiming absolute owner, and automatically took POSSESSION, of the
sole ownership over the subject property and praying that he be 37
aforementioned house and lot x x x. (Emphasis added)
declared the sole owner thereof. There is no proof that the other Clearly, the said cases find no application here because
co-owners had waived their rights over the subject property or petitioner’s action operates as a complete repudiation of the
conveyed the same to the respondent or such co-owners were existence of co-ownership and not in representation or recognition
aware of the case in the trial court. The trial court rendered thereof. Dismissal of the complaint is therefore proper. As noted
judgment declaring the respondent as the sole owner of the by Former Supreme Court Associate Justice Edgrado L. Paras "[i]t
property and entitled to its possession, to the prejudice of the is understood, of course, that the action [under Article 487 of the
latter’s siblings. Patently then, the decision of the trial court is Civil Code] is being instituted for all. Hence, if the co-owner
erroneous. expressly states that he is bringing the case only for himself, the
Under Section 7, Rule 3 of the Rules of Court, the respondent was action should not be allowed to prosper."
38
mandated to implead his siblings, being co-owners of the Indeed, respondents’ not less than four decade actual physical
property, as parties. The respondent failed to comply with the possession of the questioned ancestral house and lot deserves to
rule. It must, likewise, be stressed that the Republic of the be respected especially so that petitioner failed to show that he
Philippines is also an indispensable party as defendant because has the requisite personality and authority as co-owner to file the
the respondent sought the nullification of OCT No. P-16540 which instant case. Justice dictates that respondents who are now in the
was issued based on Free Patent No. 384019. Unless the State is twilight years of their life be granted possession of their ancestral
impleaded as party-defendant, any decision of the Court would property where their parents and siblings lived during their
not be binding on it. It has been held that the absence of an lifetime, and where they, will probably spend the remaining days
indispensable party in a case renders ineffective all the of their life.
proceedings subsequent to the filing of the complaint including
the judgment. The absence of the respondent’s siblings, as CRUZ V CATAPANG
parties, rendered all proceedings subsequent to the filing thereof,
including the judgment of the court, ineffective for want of In her memorandum,[16] petitioner contends that the consent and
authority to act, not only as to the absent parties but even as to knowledge of co-owner Norma Maligaya cannot defeat the action
30
those present. for forcible entry since it is a basic principle in the law of co-
In the instant case, it is not disputed that petitioner brought the ownership that no individual co-owner can claim title to any
suit for unlawful detainer in his name alone and for his own definite portion of the land or thing owned in common until
benefit to the exclusion of the heirs of Graciana as he even partition.
executed an affidavit of self- adjudication over the disputed On the other hand, respondent in her memorandum[17] counters
property. It is clear therefore that petitioner cannot validly that the complaint for forcible entry cannot prosper because her
maintain the instant action considering that he does not recognize entry into the property was not through strategy or stealth due to
the co-ownership that necessarily flows from his theory of the consent of one of the co-owners. She further argues that
succession to the property of his father, Dominador. since Norma Maligaya is residing in the house she built, the issue
In the same vein, there is no merit in petitioner’s claim that he
has the legal personality to file the present unlawful detainer suit
5|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

is not just possession de facto but also one of possession de Thus, the legal effect of an agreement to preserve the properties
jure since it involves rights of co-owners to enjoy the property. in co-ownership is to create an express trust among the heirs as
As to the issue of whether or not the consent of one co-owner will co-owners of the properties. Co-ownership is a form of trust and
[16]
warrant the dismissal of a forcible entry case filed by another co- every co-owner is a trustee for the others.
owner against the person who was given the consent to construct Before the partition of a land or thing held in common, no
a house on the co-owned property, we have held that a co-owner individual or co-owner can claim title to any definite portion
cannot devote common property to his or her exclusive use to the thereof. All that the co-owner has is an ideal or abstract quota or
[17]
prejudice of the co-ownership.[18] In our view, a co-owner cannot proportionate share in the entire land or thing.
give valid consent to another to build a house on the co-owned Article 493 of the Civil Code gives the owner of an undivided
property, which is an act tantamount to devoting the property to interest in the property the right to freely sell and dispose of it,
his or her exclusive use. i.e., his undivided interest. He may validly lease his undivided
xxx xxx xxx interest to a third party independently of the other co-
[18]
Under Article 491, none of the co-owners shall, without the owners. But he has no right to sell or alienate a concrete,
consent of the others, make alterations in the thing owned in specific or determinate part of the thing owned in common
common. It necessarily follows that none of the co-owners can, because his right over the thing is represented by a quota or ideal
[19]
without the consent of the other co-owners, validly consent to the portion without any physical adjudication.
making of an alteration by another person, such as respondent, in Although assigned an aliquot but abstract part of the property,
the thing owned in common. Alterations include any act of strict the metes and bounds of petitioner’s lot has not been
dominion or ownership and any encumbrance or disposition has designated. As she was not a party to the Deed of Absolute
been held implicitly to be an act of alteration.[19] The construction Sale voluntarily entered into by the other co-owners, her right to
of a house on the co-owned property is an act of dominion. 1/6 of the property must be respected. Partition needs to be
Therefore, it is an alteration falling under Article 491 of the Civil effected to protect her right to her definite share and determine
Code. There being no consent from all co-owners, respondent had the boundaries of her property. Such partition must be done
no right to construct her house on the co-owned property. without prejudice to the rights of private respondent Virginia Teria
Consent of only one co-owner will not warrant the dismissal of the as buyer of the 5/6 portion of the lot under dispute.
complaint for forcible entry filed against the builder. The consent
given by Norma Maligaya in the absence of the consent of PAULMITAN V CA
petitioner and Luz Cruz did not vest upon respondent any right to
enter into the co-owned property. Her entry into the property still The redemption of the land made by Fanesa did not terminate the
falls under the classification “through strategy or stealth.†co-ownership nor give her title to the entire land subject of the
xxx Respondent’s entry into the property without the co-ownership. Speaking on the same issue, the Court, in Adille v.
permission of petitioner could appear to be a secret and Court of Appeals, resolved the same by holding that the right of
clandestine act done in connivance with co-owner Norma Maligaya repurchase may be exercised by a co-owner with respect to his
whom respondent allowed to stay in her house. Entry into the share alone (CIVIL CODE, art. 1612; CIVIL CODE (1889), art.
land effected clandestinely without the knowledge of the other co- 1514.). While the records show that the property was redeemed
owners could be categorized as possession by in its entirety, the plaintiff shouldering the expenses therefor, that
stealth.[20] Moreover, respondent’s act of getting only the did not make him the owner of all of it. In other words, it did not
consent of one co-owner, her sister Norma Maligaya, and allowing put to end the existing state of co-ownership (Supra, art. 489).
the latter to stay in the constructed house, can in fact be There is no doubt that redemption of property entails a necessary
considered as a strategy which she utilized in order to enter into expense.
the co-owned property. As such, respondent’s acts constitute XXX XXX XXX
forcible entry. Article 488 of the Civil Code provides that “each co-owner shall
Petitioner’s filing of a complaint for forcible entry, in our view, have a right to compel the other co-owners to contribute to the
was within the one-year period for filing the complaint. The one- expenses of preservation of the thing or right owned in common
year period within which to bring an action for forcible entry is and to the taxes. Any one of the latter may exempt himself from
generally counted from the date of actual entry to the land. this obligation by renouncing so much of his undivided interest as
However, when entry is made through stealth, then the one-year may be equivalent to his share of the expenses and taxes. No
period is counted from the time the petitioner learned about such waiver shall be made if it is prejudicial to the co-ownership.”
it.[21] Although respondent constructed her house in 1992, it was Thus, although Fanesa did not acquire ownership over the entire
only in September 1995 that petitioner learned of it when she lot by virtue of the redemption she made, nevertheless, she did
visited the property. Accordingly, she then made demands on acquire the right to be reimbursed for half of the redemption price
respondent to vacate the premises. Failing to get a favorable she paid to the Provincial Government of Negros Occidental on
response, petitioner filed the complaint on January 25, 1996, behalf of her co-owners. Until reimbursed, Fanesa holds a lien
which is within the one-year period from the time petitioner upon the subject property for the amount due her.
learned of the construction.
MARIATEGUI V CA [citing Adille v CA]
SANCHEZ V CA
Petitioners contend that they have repudiated the co-ownership
This case overlooks a basic yet significant principle of civil law: when they executed the extrajudicial partition excluding the
co-ownership. Throughout the proceedings from the MeTC to the private respondents and registered the properties in their own
[11]
Court of Appeals, the notion of co-ownership was not names (Petition, p. 16; Rollo, p. 20). However, no valid
sufficiently dealt with. We attempt to address this controversy in repudiation was made by petitioners to the prejudice of private
the interest of substantial justice. Certiorari should therefore be respondents. Assuming petitioners' registration of the subject lot
granted to cure this grave abuse of discretion. in 1971 was an act of repudiation of the co-ownership,
xxx xxx xxx prescription had not yet set in when private respondents filed in
In co-ownership, the relationship of such co-owner to the other 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA
co-owners is fiduciary in character and attribute. Whether 552 [1990]).
established by law or by agreement of the co-owners, the In their complaint, private respondents averred that in spite of
property or thing held pro-indiviso is impressed with a fiducial their demands, petitioners, except the unwilling defendants in the
nature so that each co-owner becomes a trustee for the benefit of lower court, failed and refused to acknowledge and convey their
his co-owners and he may not do any act prejudicial to the lawful shares in the estate of their father (Record on Appeal, p.
[15]
interest of his co-owners. 6). This allegation, though denied by the petitioners in their

6|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

answer (Ibid, p. 14), was never successfully refuted by them. Put 1. Possession in the Concept of Owner and in the Concept of
differently, in spite of petitioners' undisputed knowledge of their Holder
relationship to private respondents who are therefore their co- 2. Possession by Oneself and Possession in the Name of
heirs, petitioners fraudulently withheld private respondent's share Another
in the estate of Lupo Mariategui. According to respondent Jacinto, 3. Possession in Good Faith and Possession in bad Faith
since 1962, he had been inquiring from petitioner Maria del
Rosario about their (respondents) share in the property left by Art. 524. Possession may be exercised in one's own name or
their deceased father and had been assured by the latter (Maria in that of another. (413a)
del Rosario) not to worry because they will get some shares. As a
matter of fact, sometime in 1969, Jacinto constructed a house Rights of possession may be exercised by agents.
where he now resides on Lot No. 163 without any complaint from Possession by another may either be:
petitioners. 1. Necessary – i.e. exercised on behalf of the conceived child,
Petitioners' registration of the properties in their names in 1971 of juridical persons.
did not operate as a valid repudiation of the co-ownership. 2. Voluntary – i.e. agents or administrators appointed by the
owner or possessor.
In Adille vs. Court of Appeals (157 SCRA 455, 461-462 [1988]),
[3rd person who voluntary exercises possession in the
the Court held: name of another is not effective unless ratified by the
Prescription, as a mode of terminating a relation of co-ownership, person in whose name it is exercised].
must have been preceded by repudiation (of the co-ownership).
The act of repudiation, in turn, is subject to certain conditions: (1) Art. 525. The possession of things or rights may be had in one
a co-owner repudiates the co-ownership; (2) such an act of of two concepts: either in the concept of owner, or in that of
repudiation is clearly made known to the other co-owners; (3) the the holder of the thing or right to keep or enjoy it, the
evidence thereon is clear and conclusive; and (4) he has been in ownership pertaining to another person. (432)
possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law. POSSESSION IN CONCEPT OF OWNER – maybe the owner himself
xxx xxx xxx or one who claims to be so. *it is not important whether the
It is true that registration under the Torrens system is owner believes to be the owner or not, what matters is in the
constructive notice of title, but it has likewise been our holding performance of acts of ownership, he is or may be considered by
that the Torrens title does not furnish shield for fraud. It is as the owner by those who witness his exercise of propriety
therefore no argument to say that the act of registration is rights.
equivalent to notice of repudiation, assuming there was one,
notwithstanding the long-standing rule that registration operates EFFECTS:
as a universal notice of title. a. Converted into ownership by lapse of time
Inasmuch as petitioners registered the properties in their names b. Possessor can bring all actions necessary to protect his
in fraud of their co-heirs prescription can only be deemed to have possession [except accion reinvindicatoria]
commenced from the time private respondents discovered the c. Can ask for the inscription of his possession in the registry
petitioners' act of defraudation (Adille vs. Court of of property
Appeals, supra). Hence, prescription definitely may not be d. Upon recovering possession from one unlawfully depriving
invoked by petitioners because private respondents commenced him of it, he can recover fruits and damages
the instant action barely two months after learning that e. He can exercise right of pre-emption and entitled to
petitioners had registered in their names the lots involved. indemnity in case of expropriation

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX POSSESSION IN CONCEPT OF HOLDER – possessor acknowledges


that there is in another a superior right which he believes to be
Art. 523. Possession is the holding of a thing or the ownership, whether his belief be right or wrong. [while tenant
enjoyment of a right. (430a) possess land as holder, he possess the lease right as owner].

2 REQUISITES TO COMPLETE POSSESSION


1. Occupancy, apprehension, or taking Art. 526. He is deemed a possessor in good faith who is not
Possession cannot exist without occupation EXCEPT in aware that there exists in his title or mode of acquisition any
cases provided for in Art. 537. flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any
2. Intent to Possess [Animus Possidendi] case contrary to the foregoing.
Possession involves a state of mind whereby the Mistake upon a doubtful or difficult question of law may be
possessor intends to exercise and does exercise a right the basis of good faith. (433a)
of possession, whether legal or otherwise.
POSSESSOR IN GF – one who is unaware that there exists a flaw
Constructive Possession – possession in the eyes of the law does which invalidates his acquisition of the thing. [i.e. possessor’s
not mean that a man has to have his feet in every square meter belief that person from whom he received a thing was the owner
of ground before it can be said that he is in possession. of the same and could convey title].
*can be determined by outward [overt] acts and proven conduct.
DEGREES OF POSSESSION *belief of the possessor that he is the legal owner, to be well-
1. Mere Holding or Possession w/out Title and in Violation of grounded, must be based upon some title or mode of acquisition
the Right of the Ower [thief/usurper] [sale, donation, inheritance or other means of transmitting
2. Possession with Juridical Title but not that of Ownership ownership].
[tenant, pledge]
3. Possession with a Just Title, or a Title Sufficient to Transfer Gross inexcusable ignorance of the law may not be the basis of
Ownership, but not from the True Owner [buying from one GF but possible excusable ignorance may be [i.e. re: doubtful or
who pretends to be owner] difficult questions of law].
4. Possession with a Just Title from the True Owner *must hold under a title valid in form or deed sufficient to
transfer property [from sale, inheritance].
CLASSES OF POSSESSION

7|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

POSSESSION IN BF – one in possession knowing his title thereto


is defective. Art. 536. In no case may possession be acquired through
force or intimidation as long as there is a possessor who
Art. 527. Good faith is always presumed, and upon him who objects thereto. He who believes that he has an action or a
alleges bad faith on the part of a possessor rests the burden right to deprive another of the holding of a thing, must
of proof. (434) invoke the aid of the competent court, if the holder should
refuse to deliver the thing. (441a)
Art. 528. Possession acquired in good faith does not lose this
character except in the case and from the moment facts exist If a person believes he is entitled to possession of a thing which is
which show that the possessor is not unaware that he in the possession of another he may ask the latter to deliver
possesses the thing improperly or wrongfully. (435a) possession. If he refuses, recourse must be with the courts.
*otherwise may be liable for forcible entry.
Possession in GF ceases from the moment defects in the title are
made known to the possessor. Art. 537. Acts merely tolerated, and those executed
clandestinely and without the knowledge of the possessor of
Art. 529. It is presumed that possession continues to be a thing, or by violence, do not affect possession. (444)
enjoyed in the same character in which it was acquired, until
the contrary is proved. (436) ACTS MERELY TOLERATED – by reason of neighborliness or
familiarity, the owner of property allows his neighbor or another
Art. 530. Only things and rights which are susceptible of person to do on the property.
being appropriated may be the object of possession. (437) *although continued for a long time, no right will be acquired by
prescription.
Art. 531. Possession is acquired by the material occupation of *question of deciding whether it is tolerance/abandonment is for
a thing or the exercise of a right, or by the fact that it is courts to decide
subject to the action of our will, or by the proper acts and
legal formalities established for acquiring such right. (438a) CLANDESTINE & UNKNOWN – possession must be public to be
basis for prescription.
ACQUISITION OF POSSESSION
1. Corpus – material holding of a thing. ACTS OF VIOLENCE – may either be actual or threatened; by the
2. Animus - intent to possess. possessor himself or one acting on his behalf.

Occupation – used in the general and real sense. Acts referred to herein do not constitute true possession and do
not prejudice the rights of real possessor.
Art. 532. Possession may be acquired by the same person
who is to enjoy it, by his legal representative, by his agent, or Art. 538. Possession as a fact cannot be recognized at the
by any person without any power whatever: but in the last same time in two different personalities except in the cases
case, the possession shall not be considered as acquired until of co-possession. Should a question arise regarding the fact
the person in whose name the act of possession was executed of possession, the present possessor shall be preferred; if
has ratified the same, without prejudice to the juridical there are two possessors, the one longer in possession; if the
consequences of negotiorum gestio in a proper case. (439a) dates of the possession are the same, the one who presents a
title; and if all these conditions are equal, the thing shall be
Personal Acquisition placed in judicial deposit pending determination of its
1. Must have capacity to acquire possession possession or ownership through proper proceedings. (445)
2. Must have intent to possess
3. Possibility to acquire possession must be present Except in co-ownership, ownership as a fact can only be
recognized in 1 person.
Acquisition Thru Another Should a question arise as to fact of possession:
1. Representative/agent has the intention to acquire thing or Present possessor is preferred.
exercise the right for another If there are 2 Possessors
2. The person for whom the thins has been 1. One longer in possession
2. One who presents a title
3. Placed in judicial deposit pending determination of its
Art. 533. The possession of hereditary property is deemed possession or ownership
transmitted to the heir without interruption and from the
moment of the death of the decedent, in case the inheritance Art. 539. Every possessor has a right to be respected in his
is accepted. possession; and should he be disturbed therein he shall be
One who validly renounces an inheritance is deemed never to protected in or restored to said possession by the means
have possessed the same. (440) established by the laws and the Rules of Court.
A possessor deprived of his possession through forcible
Art. 534. On who succeeds by hereditary title shall not suffer entry may within ten days from the filing of the complaint
the consequences of the wrongful possession of the decedent, present a motion to secure from the competent court, in the
if it is not shown that he was aware of the flaws affecting it; action for forcible entry, a writ of preliminary mandatory
but the effects of possession in good faith shall not benefit injunction to restore him in his possession. The court shall
him except from the date of the death of the decedent. (442) decide the motion within thirty (30) days from the filing
thereof. (446a)
BF is personal and intransmissible [GF can benefit only the person
who has it and GF of heir cannot erase the effects of BF of i.e. A landlord cannot summarily enter and dispossess his tenant,
predecessor]. even for non-payment of rent, and until the lease is legally
terminated the tenant has a right to the possession.
Art. 535. Minors and incapacitated persons may acquire the
possession of things; but they need the assistance of their Within 10 days from the filing of complaint for F.E., plaintiff may
legal representatives in order to exercise the rights which be restored in possession during pendency of the action by a writ
from the possession arise in their favor. (443) of preliminary mandatory injunction.

8|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

*writ of preliminary injunction itself cannot be used as substitute *to be paid to every possessor irrespective of GF or BF but only
for an action of F.E. and U.D. GF possessor can retain thing until reimbursed.

Art. 540. Only the possession acquired and enjoyed in the Useful Expenses – incurred to give greater utility or productivity
concept of owner can serve as a title for acquiring to the thing.
dominion. (447) *only reimbursed to possessor in GF [compensation/reward for
him].
It is only the conviction of ownership externally manifested, which Option Available for One who Defeats a Possessor in GF
generates ownership [adverse possession of property is not an 1. Refunding amount of expenses
encumbrance in law]. 2. Paying the increase in value which the thing acquires by
virtue of his possession
Occupation and use, however long continued, will not confer title
by prescription or adverse possession, unless coupled with the Art. 547. If the useful improvements can be removed without
element of hostility toward the right of the true owner. damage to the principal thing, the possessor in good faith
may remove them, unless the person who recovers the
Art. 541. A possessor in the concept of owner has in his favor possession exercises the option under paragraph 2 of the
the legal presumption that he possesses with a just title and preceding article. (n)
he cannot be obliged to show or prove it. (448a)
If useful improvement can be removed without injury to the
Possession is presumed ownership, unless the contrary is proved. principal thing, the possessor in GF may remove it, instead o
asking for reimbursement
Just title – means that which is legally sufficient to transfer the
ownership or the real right to which it relates. Art. 548. Expenses for pure luxury or mere pleasure shall not
be refunded to the possessor in good faith; but he may
Art. 542. The possession of real property presumes that of remove the ornaments with which he has embellished the
the movables therein, so long as it is not shown or proved principal thing if it suffers no injury thereby, and if his
that they should be excluded. (449) successor in the possession does not prefer to refund the
amount expended. (454)
Art. 543. Each one of the participants of a thing possessed in
common shall be deemed to have exclusively possessed the These expenses do not affect the essence or substance of the
part which may be allotted to him upon the division thereof, thing itself, but only the comfort, convenience or enjoyment of
for the entire period during which the co-possession lasted. the possessor.
Interruption in the possession of the whole or a part of a The law does not compensate personal whims or caprices.
thing possessed in common shall be to the prejudice of all the
possessors. However, in case of civil interruption, the Rules Possessor in GF/BF have the same rights when it comes to
of Court shall apply. (450a) expenses for pure luxury: to remove the improvements upon w/c
they were made if the principal thing will suffer no injury and the
Art. 544. A possessor in good faith is entitled to the fruits owner does not prefer to retain them upon payment of the proper
received before the possession is legally interrupted. indemnity.
Natural and industrial fruits are considered received from
the time they are gathered or severed. Art. 549. The possessor in bad faith shall reimburse the
Civil fruits are deemed to accrue daily and belong to the fruits received and those which the legitimate possessor
possessor in good faith in that proportion.(451) could have received, and shall have a right only to the
expenses mentioned in paragraph 1 of Article 546 and in
Art. 545. If at the time the good faith ceases, there should be Article 443. The expenses incurred in improvements for pure
any natural or industrial fruits, the possessor shall have a luxury or mere pleasure shall not be refunded to the
right to a part of the expenses of cultivation, and to a part of possessor in bad faith, but he may remove the objects for
the net harvest, both in proportion to the time of the which such expenses have been incurred, provided that the
possession. thing suffers no injury thereby, and that the lawful possessor
The charges shall be divided on the same basis by the two does not prefer to retain them by paying the value they may
possessors. have at the time he enters into possession. (445a)
The owner of the thing may, should he so desire, give the
possessor in good faith the right to finish the cultivation and Possessor in BF – no right to receive any fruits.
gathering of the growing fruits, as an indemnity for his part Fruits already gathered and existing will have to be returned.
of the expenses of cultivation and the net proceeds; the Fruits consumed, lost, or could have been received will have to be
possessor in good faith who for any reason whatever should paid.
refuse to accept this concession, shall lose the right to be Fruits ungathered will have to go to lawful possessor/owner.
indemnified in any other manner. (452a) *he is liable only for the period of his possession [not liable for
those who preceded him].
Art. 546. Necessary expenses shall be refunded to every *possessor in BF is entitled to production expenses and the
possessor; but only the possessor in good faith may retain charges on property w/c lawful owner would have himself paid.
the thing until he has been reimbursed therefor. *Necessary expenses may also be recovered, w/out right of
Useful expenses shall be refunded only to the possessor in retention.
good faith with the same right of retention, the person who *Improvements made for pure luxury may be removed if the
has defeated him in the possession having the option of principal thing does not suffer injury.
refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by Art. 550. The costs of litigation over the property shall be
reason thereof. (453a) borne by every possessor. (n)

Necessary Expenses – for the preservation of the thing; “cost of Art. 551. Improvements caused by nature or time shall
living” for the thing and must be returned to the one who paid always insure to the benefit of the person who has succeeded
them, irrespective of his GF or BF. in recovering possession. (456)

9|Page
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

Art. 552. A possessor in good faith shall not be liable for the If the possessor of a movable lost or which the owner has
deterioration or loss of the thing possessed, except in cases been unlawfully deprived, has acquired it in good faith at a
in which it is proved that he has acted with fraudulent intent public sale, the owner cannot obtain its return without
or negligence, after the judicial summons. reimbursing the price paid therefor. (464a)
A possessor in bad faith shall be liable for deterioration or
loss in every case, even if caused by a fortuitous event. (457a) When a movable is in the possession of one who has acquired and
holds it in GF, the true owner cannot recover it, except when the
GF – no liability. latter has lost it or he has been unlawfully deprived of it.
GF then BF – liable for deterioration or loss in cases of fraud and
negligence after judicial summons. 3 Requisites
BF – absolutely liable for deterioration or loss [even in case of 1. Possession is in GF
F.E.]. 2. Owner has voluntarily parted with the possession of the
thing
Art. 553. One who recovers possession shall not be obliged to 3. Possessor is in the concept of owner
pay for improvements which have ceased to exist at the time
he takes possession of the thing. (458) The owner can recover even from 3rd person if
1. He lost the thing
Art. 554. A present possessor who shows his possession at 2. He was unlawfully deprived thereof
some previous time, is presumed to have held possession *except if 3rd person bought thing in a public sale. [public sale –
also during the intermediate period, in the absence of proof there is public notice of sale, everybody has right to bid and offer
to the contrary. (459) to buy].

Art. 555. A possessor may lose his possession: Art. 560. Wild animals are possessed only while they are
(1) By the abandonment of the thing; under one's control; domesticated or tamed animals are
(2) By an assignment made to another either by onerous or considered domestic or tame if they retain the habit of
gratuitous title; returning to the premises of the possessor. (465)
(3) By the destruction or total loss of the thing, or because it
goes out of commerce; Art. 561. One who recovers, according to law, possession
(4) By the possession of another, subject to the provisions of unjustly lost, shall be deemed for all purposes which may
Article 537, if the new possession has lasted longer than one redound to his benefit, to have enjoyed it without
year. But the real right of possession is not lost till after the interruption. (466)
lapse of ten years. (460a)
Possessor in GR will be deemed in continuous possession for the
Abandonment – voluntary renunciation of all the rights w/c a purpose of prescription.
person may have in a thing, with the intent to lose such thing; A possessor in BF will not be obliged to return fruits which might
includes giving up of possession, not necessarily of ownership, by have been received during the time that he was not in possession.
every possessor. MEDINA V GREENFIELD DEV’T.
*necessary that the person making the “abandonment” is a
possessor in the concept of an owner. Petitioners also claim that they are in actual possession of the
*spes recuperandi is gone and animus revertendi is finally given property. As alleged in their complaint, they instituted Santos
up. 26
Arevalo, a co-petitioner, as caretaker. They also alleged in their
petition filed before this Court that Balbino and Yolanda Medina
Possession by another is subject to the provisions of Art. 537 [by and their respective families are still residing on a portion of the
mere tolerance] 27
property. Respondent belies their claim, declaring that it
employed Arevalo as caretaker. Respondent presented a notarized
Art. 556. The possession of movables is not deemed lost so
Receipt and Quitclaim dated April 26, 1994, signed by Arevalo,
long as they remain under the control of the possessor, even
who attested that he was employed by respondent as caretaker
though for the time being he may not know their
and that his stay on the property was a mere privilege granted by
whereabouts. (461)
respondent.
Possession and ownership are two different legal concepts. Just as
Control in this article means juridical control or right.
possession is not a definite proof of ownership, neither is non-
*control is present even if you do not actually have the thing or
possession inconsistent with ownership. Even assuming that
do not know its whereabouts for the time being as long as you
petitioners' allegations are true, it bears no legal consequence in
can get their physical or natural possession by diligent search.
the case at hand because the execution of the deeds of
conveyances is already deemed equivalent to delivery of the
Art. 557. The possession of immovables and of real rights is
property to respondent, and prior physical delivery or possession
not deemed lost, or transferred for purposes of prescription 28
to the prejudice of third persons, except in accordance with is not legally required. Under Article 1498 of the Civil Code,
the provisions of the Mortgage Law and the Land "when the sale is made through a public instrument, the
Registration laws. (462a) execution thereof shall be equivalent to the delivery of the object
of the contract, if from the deed the contrary does not appear or
Art. 558. Acts relating to possession, executed or agreed to by cannot be inferred." Possession is also transferred, along with
one who possesses a thing belonging to another as a mere ownership thereof, to respondent by virtue of the notarized deeds
29
holder to enjoy or keep it, in any character, do not bind or of conveyances.
prejudice the owner, unless he gave said holder express
authority to do such acts, or ratifies them VILLA V HEIRS OF ALTAVAS
subsequently. (463)
As to respondents' ownership and right of possession of the
Art. 559. The possession of movable property acquired in subject properties, records show that the MCTC based its Decision
good faith is equivalent to a title. Nevertheless, one who has not only on the Position Paper of respondents but also on the
lost any movable or has been unlawfully deprived thereof pieces of evidence submitted by them. Respondents attached, as
may recover it from the person in possession of the same. annexes to their Complaint, the Original Certificates of Title Nos.
RO-4326 and RO-4327 in the name of Enrique, covering Lot Nos.

10 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

2816 and 2817, respectively, as evidence of their ownership and petitioner continued to declare the “sugar central railroad right of
right to possess the disputed properties. way” in its realty tax receipts, thereby doubtlessly conceding the
Moreover, being a mere lessee, petitioner steps into the shoes of ownership of respondent heirs. Respondents themselves were
her lessor, Virginia. However, Virginia's claim of ownership was emphatic that they simply tolerated petitioner’s continued use of
not sustained by the MCTC, which instead found that she was not Cadastral Lot No. 954 so as not to jeopardize the employment of
the owner of and had no right to possess the disputed property or one of their co-heirs in the sugar mill of petitioner.[31]
to transfer possession of the same, through lease, in favor of The only time petitioner assumed a legal position adverse to
another person. Virginia later withdrew her appeal filed with the respondents’ was when it filed a claim over the property in 1965
RTC. By reason of such withdrawal, she is bound by the findings during the cadastral survey of Medellin. Since then (1965) and
of the MCTC. until the filing of the complaint for the recovery of the subject
land before the RTC of Cebu in 1989, only 24 years had lapsed.
BOGO-MEDELLIN MILLING CO. V CA Since the required 30-year extraordinary prescriptive period had
not yet been complied with in 1989, petitioner never acquired
Petitioner’s claim of ownership through extraordinary acquisitive ownership of the subject land.
prescription under Article 1137 of the Civil Code cannot be
sustained. MANOTOK REALTY V CA
There is no dispute that the controversial strip of land has been in
the continuous possession of petitioner since 1929. But A possessor in good faith is one who is not aware that there exists
possession, to constitute the foundation of a prescriptive right, in his title or mode of acquisition any flaw which invalidates it.
must be possession under a claim of title, that is, it must be (Caram v. Laureta, 103 SCRA 7, Art. 526, Civil Code). One who
adverse.[21] Unless coupled with the element of hostility towards acquires real estate with knowledge of a defect or lack of title in
the true owner, possession, however long, will not confer title by his vendor cannot claim that he has acquired title thereto in good
prescription.[22] faith as against the true owner of the land or of an interest
Xxx xxx xxx therein; and the same rule must be applied to one who has
While it is true that, together with a person’s actual and adverse knowledge of facts which should put a reasonable man upon his
possession of the land, tax declarations constitute strong evidence guard, and then claims that he acted in good faith under the
of ownership of the land occupied by him,[25] this legal precept belief that there was no defect in the title of the vendor. (See
does not apply in cases where the property is declared to be a Leung Yee v. FL Strong Machinery Co., 37 Phil. 644).
mere easement of right of way. The records show that when Dayrit executed the deed of'
An easement or servitude is a real right, constituted on the assignment in favor of the respondent, the disputed lot was
corporeal immovable property of another, by virtue of which the already registered and titled in the name of the petitioner. Such
owner has to refrain from doing, or must allow someone to do, an act of registration served as a constructive notice to the whole
something on his property, for the benefit of another thing or world and the title issued in favor of petitioner made his
person. It exists only when the servient and dominant estates ownership conclusive upon and against all persons including
belong to two different owners. It gives the holder of the Dayrit and. herein respondent, although no personal notice was
easement an incorporeal interest on the land but grants no title served on either of the latter. (See Garcia v. Bello, 13 SCRA 769;
thereto. Therefore, an acknowledgment of the easement is an Demontano v. Court of Appeals, 81 SCRA 286). Therefore, the
admission that the property belongs to another.[26] presumption of good faith in favor of the respondent cannot apply
Having held the property by virtue of an easement, petitioner because as far as the law is concerned, he had notice of the
cannot now assert that its occupancy since 1929 was in the ownership by the petitioner over said lot. It is also unthinkable
concept of an owner. Neither can it declare that the 30-year that in the big Tambunting Estate beset with one of the most
period of extraordinary acquisitive prescription started from that serious squatter problems in Metro Manila, any tenant or
year. prospective buyer would be unaware that the petitioner acquired
Petitioner, however, maintains that even if a servitude was merely the estate as highest bidder at the sale ordered by the probate
imposed on the property in its favor, its possession immediately court. Furthermore, the respondent did not even bother to inquire
became adverse to the owner in the late 1950’s when the grant about the certificate of title covering the lot in question to verify
was alleged by respondent heirs to have expired. It stresses that, who was the real owner thereof, despite the fact that his
counting from the late 1950’s (1959 as found by the trial court), transferor, Dayrit, never showed him any title thereto; a
the 30-year extraordinary acquisitive prescription had already set circumstance which should have put him upon such inquiry or
in by the time respondent heirs made a claim against it in their investigation. His failure to exercise that measure of precaution
letters dated March 1 and April 6, 1989. which was reasonably required of a prudent man in order to
We do not think so. The mere expiration of the period of acquaint him with the defects in the title of his vendor precludes
easement in 1959 did not convert petitioner’s possession into an him from claiming possession in good faith.
adverse one. Mere material possession of land is not adverse
possession as against the owner and is insufficient to vest title, VILLAMIL V VILLAROSA
unless such possession is accompanied by the intent to possess as
an owner.[27] There should be a hostile use of such a nature and The burden of proving the status of a purchaser in good faith lies
exercised under such circumstances as to manifest and give upon one who asserts that status.[26]
notice that the possession is under a claim of right. An innocent purchaser for value is one who buys the property of
In the absence of an express grant by the owner, or conduct by another without notice that some other person has a right to or
petitioner sugar mill from which an adverse claim can be implied, interest in that same property, and who pays a full and fair price
its possession of the lot can only be presumed to have continued at the time of the purchase or before receiving any notice of
in the same character as when it was acquired (that is, it
another person’s claim.[27]
possessed the land only by virtue of the original grant of the
easement of right of way),[28] or was by mere license or The honesty of intention that constitutes good faith implies
tolerance of the owners (respondent heirs).[29] It is a freedom from knowledge of circumstances that ought to put a
fundamental principle of law in this jurisdiction that acts of prudent person on inquiry. Good faith consists in the belief of the
possessory character executed by virtue of license or tolerance of possessors that the persons from whom they received the thing
the owner, no matter how long, do not start the running of the are its rightful owners who could convey their title. Good faith,
period of prescription.[30] while always presumed in the absence of proof to the contrary,
After the grant of easement expired in 1959, petitioner never requires this well-founded belief.[28]
performed any act incompatible with the ownership of respondent Indeed, we found that Villarosa had successfully discharged this
heirs over Cadastral Lot No. 954. On the contrary, until 1963, burden. In the instant case, there were no traces of bad faith on

11 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

Villarosa’s part in acquiring the subject property by We, therefore, hold that the transfer of possession of the subject
purchase. Villarosa merely responded to a newspaper properties on October 10, 1996 to respondent cannot be
advertisement for the sale of a parcel of land with an unfinished considered as "delivery" within the purview of Article 1543 of the
structure located in Tierra Pura, Tandang Sora, Quezon Civil Code. It follows that since there has been no transfer of
City.[29] He contacted the number specified in the advertisement ownership of the subject properties since the deeds of absolute
and was able to talk to a certain lady named Annabelle[30]who sale have not yet been executed by the parties, the action filed by
introduced him to the owner, Mateo Tolentino.[31] When he respondent has not prescribed.
visited the site, he inquired from Mateo Tolentino about the
unfinished structure and was informed that the latter allegedly BARTOLOME ORTIZ V HON. KAYANAN
ran out of money and eventually lost interest in pursuing the
construction because of his old age.[32] Villarosa was then given a The issue decisive of the controvery is—after the rendition by the
copy of the title.[33] He went to the Register of Deeds and was trial court of its judgment in Civil Case No. C-90 on March 22,
able to verify the authenticity of the title.[34] He also found out 1966 confirming the award of one-half of the property to Quirino
that the property was mortgaged under the name of Mario Comintan—whether or not petitioner is still entitled to retain for
Villamor, who turned out to be the employer of Tolentino. Upon his own exclusive benefit all the fruits of the property, such as the
reaching an agreement on the price of P276,000.00, Villarosa tolls collected by him from March 1967 to December 1968, and
redeemed the title from Express Financing September 1969 to March 31, 1970, amounting to about
Company.[35] Thereafter, the property was released from P25,000.00. In other words, petitioner contends that so long as
[36]
mortgage and a deed of sale was executed. Villarosa then the aforesaid amount of P13,632,00 decreed in the judgment
secured the transfer of title in his name.[37] representing the expenses for clearing the land and the value of
Well-settled is the rule that every person dealing with a registered the coconuts and fruit trees planted by him remains unpaid, he
land may safely rely on the correctness of the certificate of can appropriate for his exclusive benefit all the fruits which he
title issued therefor and the law will in no way oblige him to go may derive from the property, without any obligation to apply any
beyond the certificate to determine the condition of the property. portion thereof to the payment of the interest and the principal of
Where there is nothing in the certificate of title to indicate any the debt.
cloud or vice in the ownership of the property, or any We find this contention untenable.
encumbrance thereon, the purchaser is not required to explore There is no question that a possessor in good faith is entitled to
further than what the Torrens Title upon its face indicates in quest the fruits received before the possession is legally
for any hidden defects or inchoate right that may subsequently 11
interrupted. Possession in good faith ceases or is legally
defeat his right thereto.[38] interrupted from the moment defects in the title are made known
This principle does not apply when the party has actual knowledge to the possessor, by extraneous evidence or by the filing of an
of facts and circumstances that would impel a reasonably cautious action in court by the true owner for the recovery of the
12
man to make such inquiry or when the purchaser has knowledge property. Hence, all the fruits that the possessor may receive
of a defect or the lack of title in his vendor or of sufficient facts to from the time he is summoned in court, or when he answers the
induce a reasonably prudent man to inquire into the status of the complaint, must be delivered and paid by him to the owner or
title of the property in litigation. One who falls within the 13
lawful possessor.
exception can neither be denominated an innocent purchaser for However, even after his good faith ceases, the possessor in fact
value nor a purchaser in good faith.[39] can still retain the property, pursuant to Article 546 of the New
XXX XXX XXX XXX Civil Code, until he has been fully reimbursed for all the necessary
A forged or fraudulent document may become the root of a valid and useful expenses made by him on the property. This right of
title if the property has already been transferred from the name of retention has been considered as one of the conglomerate of
the owner to that of the forger.[42] This doctrine serves to measures devised by the law for the protection of the possessor
emphasize that a person who deals with registered property in in good faith. Its object is to guarantee the reimbursement of the
good faith will acquire good title from a forger and be absolutely expenses, such as those for the preservation of the
protected by a Torrens title.[43] 14
property, or for the enhancement of its utility or
Having made the necessary inquiries and having found the title to 15
be authentic, Villarosa need not go beyond the certificate of productivity. It permits the actual possessor to remain in
title. When dealing with land that is registered and titled, as in possession while he has not been reimbursed by the person who
this case, buyers are not required by the law to inquire further defeated him in the possession for those necessary expenses and
than what the Torrens certificate of title indicates on its useful improvements made by him on the thing possessed. The
face.[44] He examined the transferor’s title, which was then under principal characteristic of the right of retention is its accessory
the name of Spouses Tolentino. He did not have to scrutinize character. It is accessory to a principal obligation. Considering
each and every title and previous owners of the property that the right of the possessor to receive the fruits terminates
preceding Tolentino. when his good faith ceases, it is necessary, in order that this right
In sum, Villarosa was able to establish good faith when he bought to retain may be useful, to concede to the creditor the right to
the subject property. Therefore, TCT No. 354675 issued in his secure reimbursement from the fruits of the property by utilizing
name is declared valid. its proceeds for the payment of the interest as well as the
principal of the debt while he remains in possession. This right of
CEBU WINLAND DEVT. V ONG SIAO HUA retention of the property by the creditor, according to Scaevola, in
the light of the provisions of Article 502 of the Spanish Civil
In the case at bar, it appears that respondent was already placed 16
Code, is considered not a coercive measure to oblige the
in possession of the subject properties. However, it is crystal clear debtor to pay, depriving him temporarily of the enjoyment of the
that the deeds of absolute sale were still to be executed by the fruits of his property, but as a means of obtainitig compensation
parties upon payment of the last installment. This fact shows that for the debt. The right of retention in this case is analogous to a
ownership of the said properties was withheld by petitioner. contract of antichresis and it cati be considered as a means of
Following case law, it is evident that the parties did not intend to extinguishing the obligation, inasmuch as the right to retain the
immediately transfer ownership of the subject properties until full thing lasts only for the period necessary to enable the creditor to
payment and the execution of the deeds of absolute be reimbursed from the fruits for the necessary and useful
28 17
sale. Consequently, there is no "delivery" to speak of in this expenses.
case since what was transferred was possession only and not According to Manresa, the right of retention is, therefore,
ownership of the subject properties. analogous to that of a pledge, if the property retained is a

12 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

movable, and to that of antichresis, if the property held is


18 20. Article 546 and 547, NCC
immovable. This construction appears to be in harmony with
similar provisions of the civil law which employs the right of The Infante spouses being possessors in bad faith, their rights to
retention as a means or device by which a creditor is able to the improvements they introduced on the disputed lot are
obtain the payment of a debt. Thus, under Article 1731 of the governed by Articles 546 and 547 of the New Civil Code.
New Civil Code, any person who has performed work upon a
movable has a right to retain it by way of pledge until he is paid. 21. Infante’s expenses
Similarly, under Article 1914 of the same Code, the agent may Their expenses consisting of P1,500 for draining the property,
retain in pledge the things which are the object of the agency filling it with 500 cubic meters of garden soil, building a wall
until the principal effects reimbursement of the funds advanced by around it and installing a gate and P11,929for erecting a
the former for the execution of the agency, or he is indemnified bungalow thereon, are useful expenditures; for they add to the
for all damages which he may have suffered as a consequence of value of the property (Aringo vs. Arenas, 14 Phil. 263; Alburo vs.
the execution of the agency, provided he is free from fault. To the Villanueva, 7 Phil. 277; Valencia vs. Ayala de Roxas, 13 Phil. 45).
same effect, the depositary, under Article 1994 of the same Code,
may retain the thing in pledge until the full payment of what may 22. Article 546 and 547; Possessor in good faith entitled
be due him by reason of the deposit. The usufructuary, pursuant to right of retention of useful improvement and right to a
to Article 612 of the same Code, may retain the property until he refund for useful expenses; Implies contrary to possessor
is reimbursed for the amount paid for taxes levied on the capital in bad faith
(Article 597) and tor extraordinary repairs (Article 594). Under the second paragraph of Article 546, the possessor in good
XXX XXX XXX faith can retain the useful improvements unless the person who
Applying the afore-cited principles to the case at bar, petitioner defeated him in his possession refunds him the amount of such
cannot appropriate for his own exclusive benefit the tolls which he useful expenses or pay him the increased value the land may
collected from the property retained by him. It was his duty under have acquired by reason thereof. Under Article 547, the possessor
the law, after deducting the necessary expenses for his in good faith has also the right to remove the useful
administration, to apply such amount collected to the payment of improvements if such removal can be done without damage to the
the interest, and the balance to the payment of the obligation. land, unless the person with the superior right elects to pay for
We hold, therefore, that the disputed tolls, after deducting the useful improvements or reimburse the expenses therefor
petitioner's expenses for administration, belong to Quirino under paragraph 2 of Article 546. These provisions seem to imply
Comintan, owner of the land through which the toll road passed, that the possessor in bad faith has neither the right of retention of
further considering that the same was on portions of the property useful improvements nor the right to a refund for useful
on which petitioner had not introduced any improvement. The expenses.
trial court itself clarified this matter when it placed the toll road
under receivership. The omission of any mention of the tolls in the MWSS V CA
decision itself may be attributed to the fact that the tolls appear
to have been collected after the rendition of the judgment of the 3. Possessor in bad faith does not have the right to remove
trial court. useful improvements
Article 449 of the Civil Code of the Philippines provides that "he
who builds, plants or sows in bad faith on the land of another,
CARBONELL V CA loses what is built, planted or sown without right to indemnity."
As a builder in bad faith, NAWASA lost whatever useful
17. Poncio did not remain owner by possessing the lot improvements it had made without right to indemnity (Santos vs.
Being a valid consensual contract, the document effectively Mojica, Jan. 31, 1969, 26 SCRA 703).
transferred the possession of the lot to the vendee Carbonell by
constitutum possessorium (Article 1500, New Civil Code); because 4. Only possessor in good faith has right to be refunded for
thereunder the vendor Poncio continued to retain physical useful expenses with right of retention until reimbursed; or
possession of the lot as tenant of the vendee and no longer as removal of useful improvements without damage to the
owner thereof. More than just the signing of the document by principal thing
Poncio and Carbonell with Constancio Meonada as witness to Under Article 546 of said code, only a possessor in good faith shall
perfect the contract of sale, the transaction was further confirmed be refunded for useful expenses with the right of retention until
when Poncio agreed to the actual payment by Carbonell of his reimbursed; and under Article 547 thereof, only a possessor in
mortgage arrearages to the bank on 27 January 1955 and by his good faith may remove useful improvements if the can be done
consequent delivery of his own mortgage passbook to Carbonell. without damage to the principal thing and if the person who
If he remained owner and mortgagor, Poncio would not have recovers the possession does not exercise the option of
surrendered his mortgage passbook to Carbonell. reimbursing the useful expenses.

18. Poncio does not own another parcel of land with the 5. Possessor in bad faith has right to remove
same area adjacent to Carbonell improvements for pure luxury or mere pleasure, provided
It is not shown that Poncio owns another parcel with the same such suffers no injury thereby
area, adjacent to the lot of his cousin Carbonell and likewise The right given a possessor in bad faith is to remove
mortgaged by him to the Republic Savings Bank. The transaction improvements applies only to improvements for pure luxury or
therefore between Poncio and Carbonell can only refer and does mere pleasure, provided the thing suffers no injury thereby and
refer to the lot involved. If Poncio had another lot to remove his the lawful possessor does not prefer to retain them by paying the
house, the document would not have stipulated to allow him to value they have at the time he enters into possession (Article
stay in the sold lot without paying any rent for one year and 549, Id.).
thereafter to pay rental in case he cannot find another place to
transfer his house. 6. Mindanao Academy v. Yap
In Mindanao Academy, Inc. vs. Yap (13 SCRA 190), it was held
19. Carbonell liable to efund amount Infante paid the that "if the defendant constructed a new building, as he alleges,
bank to redeem the mortgage he cannot recover its value because the construction was done
While Carbonell has the superior title to the lot, she must however after the filing of the action for annulment, thus rendering him a
refund to Infante the amount of P1,500, which Infante builder in bad faith who is denied by law any right of
paid to the Republic Savings Bank to redeem the mortgage. reimbursement." What this Court allowed appellant Yap to remove
were the equipment, books, furniture and fixtures brought in by
13 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

him, because they were outside of the scope of the judgment and the designated time, either the same thing or, in special cases, its
may be retained by him. equivalent.
*includes both jus utendi and jus fruendi.
7. Carbonell v. CA cannot invoke to modify the provisions *there can be usufruct of rights and unproductive things.
of the Code; Case is not a precedent *usufruct on consumable things – not on the thing itself but on its
The decision in the case of Carbonell vs. Court of Appeals (69 value, if appraised, or on an equal quantity or quality,if not
SCRA 99) cannot be invoked to modify the clear provisions of the appraised.
Civil Code of the Philippines that a possessor in bad faith is not
entitled to reimbursement of useful expenses or to removal of Art. 563. Usufruct is constituted by law, by the will of private
useful improvements. In said case, the lower courts found that persons expressed in acts inter vivos or in a last will and
respondents Infantes were possessors in good faith. On appeal, testament, and by prescription. (468)
the First Division of this Court reversed the decision of the Court
of Appeals and declared petitioner Carbonell to have the superior 1. Legal – provided by law [parents over properties of
right to the land in question. On the question of whether or not children].
respondents Infantes were possessors in good faith, four 2. Voluntary – created by will f persons.
Members ruled that they were not, but as a matter of equity 3. Mixed/By Prescription
allowed them to remove the useful improvements they had
introduced on the land. Justice Teehankee (now Chief Justice) Art. 564. Usufruct may be constituted on the whole or a part
concurred on the same premise as the dissenting opinion of of the fruits of the thing, in favor of one more persons,
Justice Muñoz Palma that both the conflicting buyers of the real simultaneously or successively, and in every case from or to
property in question, namely petitioner Carbonell as the first a certain day, purely or conditionally. It may also be
buyer and respondents Infantes as the second buyer, may be constituted on a right, provided it is not strictly personal or
deemed purchasers in good faith at the respective dates of their intransmissible. (469)
purchase. Justice Muñoz Palma dissented on the ground that since
both purchasers were undoubtedly in good faith, respondents 1. TOTAL/PARTIAL
Infantes' prior registration of the sale in good faith entitled them 2. SIMPLE/MULTIPLE
to the ownership of the land. Inasmuch as only four Members 3. SIMULTANEOUS/SUCCESSIVE
concurred in ruling that respondents Infantes were possessors in 4. PURE/CONDITIONAL/WITH A TERM
bad faith and two Members ruled that they were possessors in 5. OVER THINGS/RIGHTS
good faith, said decision does not establish a precedent.
Usufruct Over Right – of same nature as the right which is
ROMEO EDU V HON.GOMEZ burdened [i.e. usufruct of real right is also a real right].

There is no merit in the petition considering that the acquirer or Art. 565. The rights and obligations of the usufructuary shall
the purchaser in good faith of a chattel of movable property is be those provided in the title constituting the usufruct; in
entitled to be respected and protected in his possession as if he default of such title, or in case it is deficient, the provisions
were the true owner thereof until a competent court rules contained in the two following Chapters shall be
otherwise. In the meantime, as the true owner, the possessor in observed. (470)
good faith cannot be compelled to surrender possession nor to be
required to institute an action for the recovery of the chattel, Rights and duties of the usufructuary provided by law may be
whether or not an indemnity bond is issued in his favor. The filing modified or eliminated by the parties.
of an information charging that the chattel was illegally obtained *naked owner y authorize the usufructuary to alienate the thing.
through estafa from its true owner by the transferor of the bona
Art. 566. The usufructuary shall be entitled to all the natural,
fide possessor does not warrant disturbing the possession of the industrial and civil fruits of the property in usufruct. With
chattel against the will of the possessor. respect to hidden treasure which may be found on the land
Finally, the claim of petitioners that the Commission has the right or tenement, he shall be considered a stranger. (471)
to seize and impound the car under Section 60 of Republic Act
4136 which reads: Usufructuary has the same rights as the owner but only with
Sec. 60. The lien upon motor vehicles. Any balance of fees for respect to its use and receipt of its fruits.
registration, re-registration or delinquent registration of a motor *he has right to administer the property.
vehicle, remaining unpaid and all fines imposed upon any vehicle *usufructuary rights may be transferred, assigned, or otherwise
owner, shall constitute a first lien upon the motor vehicle disposed of by the usufructuary. They are also not exempt from
concerned. execution and can be sold at public auction.
is untenable. it is clear from the provision of said Section 60 of
Republic Act 4136 that the Commissioner's right to seize and Products of a thing which when taken from it diminishes its
impound subject property is only good for the proper enforcement substance, such as minerals from mines and stones from quarries
of lien upon motor vehicles. The Land Transportation Commission form part of the capital and do not pertain to the usufructuary
may issue a warrant of constructive or actual distraint against [unless the owner, before constitution of the usufruct, has
motor vehicle for collection of unpaid fees for registration, re- dedicated the property to the exploitation of such products].
registration or delinquent registration of vehicles. *with respect to hidden treasure, the parties may also freely
stipulate, and even agree that hidden treasure found on the
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx property shall belong wholly to the usufructuary.

Art. 562. Usufruct gives a right to enjoy the property of Rights of Naked Owner
another with the obligation of preserving its form and He can exercise all the rights of ownership consistent with the
substance, unless the title constituting it or the law otherwise enjoyment of the thing by the usufructuary [i.e. sell or
provides. (467) encumber].
He is entitled to products w/c do not constitute fruits [i.e. ½ of
USUFRUCT - Real right of a temporary nature which authorizes its hidden treasure].
holder to enjoy all the benefits which results from the normal
enjoyment of another’s property with the obligation to return at Art. 567. Natural or industrial fruits growing at the time the
usufruct begins, belong to the usufructuary.
14 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

Those growing at the time the usufruct terminates, belong to Usufructuary may dispose of the thing in the following cases:
the owner. 1. Things are consumable
In the preceding cases, the usufructuary, at the beginning of 2. Things are by their nature, intended for sale.
the usufruct, has no obligation to refund to the owner any 3. Things are delivered under appraisal s equivalent to their
expenses incurred; but the owner shall be obliged to sale.
reimburse at the termination of the usufruct, from the
proceeds of the growing fruits, the ordinary expenses of Usufructuary may sell future crops.
cultivation, for seed, and other similar expenses incurred by *if usufruct is terminated before harvest:
the usufructuary. Sale is valid [and price not yet paid] – owner is entitled to
The provisions of this article shall not prejudice the rights of receive from vendee.
third persons, acquired either at the beginning or at the If price already paid – usufructuary is obliged to reimburse.
termination of the usufruct. (472)
If sale is void as to the owner – vendee can recover price from
Fruits which would have already been gathered, because they are usufructuary.
ripe and mature, but which remained ungathered due to acts *validity depends upon the ratification by the naked owner of the
imputable to the naked owner or 3rd person or even force majeure sale
or F.E., remain with the usufructuary.
*Only voluntary usufructs can be alienated.
Usufructuary is not bound to pay production expenses to naked
owner for fruits pending at the birth of the usufruct [but if 3rd Art. 573. Whenever the usufruct includes things which,
person, he is bound]. without being consumed, gradually deteriorate through wear
and tear, the usufructuary shall have the right to make use
Art. 568. If the usufructuary has leased the lands or thereof in accordance with the purpose for which they are
tenements given in usufruct, and the usufruct should expire intended, and shall not be obliged to return them at the
before the termination of the lease, he or his heirs and termination of the usufruct except in their condition at that
successors shall receive only the proportionate share of the time; but he shall be obliged to indemnify the owner for any
rent that must be paid by the lessee. (473) deterioration they may have suffered by reason of his fraud
or negligence. (481)
A lease executed by the owner before the creation of the usufruct
is not extinguished by such usufruct. Usufructuary is to return the thing in the condition in which it may
be found at the time of expiration of the usufruct.
Rents are civil fruits – usufructuary is entitled thereto. The law renders the usufructuary not liable for deterioration due
to normal wear and tear.
Art. 569. Civil fruits are deemed to accrue daily, and belong He is only liable for deterioration only when it is caused by his
to the usufructuary in proportion to the time the usufruct frau or negligence.
may last. (474)
Art. 574. Whenever the usufruct includes things which
Art. 570. Whenever a usufruct is constituted on the right to cannot be used without being consumed, the usufructuary
receive a rent or periodical pension, whether in money or in shall have the right to make use of them under the obligation
fruits, or in the interest on bonds or securities payable to of paying their appraised value at the termination of the
bearer, each payment due shall be considered as the usufruct, if they were appraised when delivered. In case they
proceeds or fruits of such right. were not appraised, he shall have the right to return at the
Whenever it consists in the enjoyment of benefits accruing same quantity and quality, or pay their current price at the
from a participation in any industrial or commercial time the usufruct ceases. (482)
enterprise, the date of the distribution of which is not fixed,
such benefits shall have the same character. The usufruct in this particular case is not upon the consumable
In either case they shall be distributed as civil fruits, and things themselves but upon the sum representing their value or
shall be applied in the manner prescribed in the preceding upon a quantity of tings of the same kind and quality.
article. (475) *usufructuary becomes the owner of the thing while the grantor
becomes the creditor entitled to the value or to a thing of the
Art. 571. The usufructuary shall have the right to enjoy any same kind and quantity.
increase which the thing in usufruct may acquire through
accession, the servitudes established in its favor, and, in Art. 575. The usufructuary of fruit-bearing trees and shrubs
general, all the benefits inherent therein. (479) may make use of the dead trunks, and even of those cut off or
uprooted by accident, under the obligation to replace them
Art. 572. The usufructuary may personally enjoy the thing in with new plants.(483a)
usufruct, lease it to another, or alienate his right of usufruct,
even by a gratuitous title; but all the contracts he may enter Art. 576. If in consequence of a calamity or extraordinary
into as such usufructuary shall terminate upon the event, the trees or shrubs shall have disappeared in such
expiration of the usufruct, saving leases of rural lands, which considerable number that it would not be possible or it
shall be considered as subsisting during the agricultural would be too burdensome to replace them, the usufructuary
year. (480) may leave the dead, fallen or uprooted trunks at the disposal
of the owner, and demand that the latter remove them and
Transfer or lease of the usufruct does not terminate the relation clear the land. (484a)
of the usufructuary with the owner. The usufructuary will be liable
to the owner for damages caused by the fault or negligence of the Art. 577. The usufructuary of woodland may enjoy all the
transferee or the lessee. benefits which it may produce according to its nature.
*usufruct does not terminate upon death of the transferee but it If the woodland is a copse or consists of timber for building,
terminates upon the death of the usufructuary. the usufructuary may do such ordinary cutting or felling as
the owner was in the habit of doing, and in default of this, he
Usufructuary cannot alienate or dispose of objects included in the may do so in accordance with the custom of the place, as to
usufruct. the manner, amount and season.

15 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

In any case the felling or cutting of trees shall be made in notify him, and he may attend or not, personally or through an
such manner as not to prejudice the preservation of the land. authorized representative.
In nurseries, the usufructuary may make the necessary *expenses for the inventory – borne by the usufructuary.
thinnings in order that the remaining trees may properly
grow. The security may be a personal bond, a pledge, or a mortgage.
With the exception of the provisions of the preceding
paragraphs, the usufructuary cannot cut down trees unless it Art. 584. The provisions of No. 2 of the preceding article shall
be to restore or improve some of the things in usufruct, and not apply to the donor who has reserved the usufruct of the
in such case shall first inform the owner of the necessity for property donated, or to the parents who are usufructuaries
the work. (485) of their children's property, except when the parents
contract a second marriage. (492a)
Art. 578. The usufructuary of an action to recover real
property or a real right, or any movable property, has the Art. 585. The usufructuary, whatever may be the title of the
right to bring the action and to oblige the owner thereof to usufruct, may be excused from the obligation of making an
give him the authority for this purpose and to furnish him inventory or of giving security, when no one will be injured
whatever proof he may have. If in consequence of the thereby. (493)
enforcement of the action he acquires the thing claimed, the
usufruct shall be limited to the fruits, the dominion WHERE INVENTORY OR GIVING SECURITY IS NOT REQUIRED
remaining with the owner. (486) 1. Where owner waives the giving of a security or the making
of an inventory
Art. 579. The usufructuary may make on the property held in 2. Where the title constituting the usufruct exempts the
usufruct such useful improvements or expenses for mere usufructuary from any or both these obligations
pleasure as he may deem proper, provided he does not alter 3. Where the usufructuary asks to be relieved from the
its form or substance; but he shall have no right to be obligations, and no one will be injured by such exemption
indemnified therefor. He may, however, remove such [such as usufruct over a periodic income/pension].
improvements, should it be possible to do so without damage *if owner refuses exemption, resort may be had to the courts
to the property. (487) for judicial declaration thereof taking into account the special
circumstances.
Whenever the usufructuary can remove the improvements
without injury to the property in usufruct, he has a right to do so, The code does not provide for the effect of the failure to make an
and the owner cannot prevent him from doing so even upon inventory when the usufructuary is not exempt from making it.
payment of their value.
*he may demolish/destroy the improvements provided he leaves Art. 586. Should the usufructuary fail to give security in the
the land as it was before construction of such improvement. cases in which he is bound to give it, the owner may demand
that the immovables be placed under administration, that
Art. 580. The usufructuary may set off the improvements he the movables be sold, that the public bonds, instruments of
may have made on the property against any damage to the credit payable to order or to bearer be converted into
same. (488) registered certificates or deposited in a bank or public
institution, and that the capital or sums in cash and the
It is necessary that the improvements should have increased the proceeds of the sale of the movable property be invested in
value of the property, and that the damages are imputable to the safe securities.
usufructuary. The interest on the proceeds of the sale of the movables and
Art. 581. The owner of property the usufruct of which is held that on public securities and bonds, and the proceeds of the
by another, may alienate it, but he cannot alter its form or property placed under administration, shall belong to the
substance, or do anything thereon which may be prejudicial usufructuary.
to the usufructuary. (489) Furthermore, the owner may, if he so prefers, until the
usufructuary gives security or is excused from so doing,
Art. 582. The usufructuary of a part of a thing held in retain in his possession the property in usufruct as
common shall exercise all the rights pertaining to the owner administrator, subject to the obligation to deliver to the
thereof with respect to the administration and the collection usufructuary the net proceeds thereof, after deducting the
of fruits or interest. Should the co-ownership cease by sums which may be agreed upon or judicially allowed him for
reason of the division of the thing held in common, the such administration. (494)
usufruct of the part allotted to the co-owner shall belong to
the usufructuary. (490) Potestative right granted to the naked owner, if he does not wish
to exercise it, he may deliver the property to the usufructuary
Right of the usufructuary is not affected by the division of the [delivery cannot be interpreted as renunciation of right to demand
property in usufruct among the co-owners. security].

Art. 583. The usufructuary, before entering upon the Usufructuary who does not possess the property, by virtue of the
enjoyment of the property, is obliged: provisions of this article, may alienate his right in the same form
(1) To make, after notice to the owner or his legitimate that he holds it, w/out prejudice to the right of the transferee to
representative, an inventory of all the property, which shall give the required security [but lease cannot be executed by the
contain an appraisal of the movables and a description of the usufructuary].
condition of the immovables;
(2) To give security, binding himself to fulfill the obligations Art. 587. If the usufructuary who has not given security
imposed upon him in accordance with this Chapter. (491) claims, by virtue of a promise under oath, the delivery of the
furniture necessary for his use, and that he and his family be
These requirements are not conditions precedent to the allowed to live in a house included in the usufruct, the court
commencement of the right of the usufructuary, but merely to the may grant this petition, after due consideration of the facts of
entry upon the possession and enjoyment of the property. the case.
The same rule shall be observed with respect to implements,
The law does not require the concurrence of the owner in the tools and other movable property necessary for an industry
making of the inventory. It is sufficient for the usufructuary to or vocation in which he is engaged.
16 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

If the owner does not wish that certain articles be sold Usufructuary cannot excuse himself from liability by renouncing
because of their artistic worth or because they have a the usufruct [defects due to his fault].
sentimental value, he may demand their delivery to him
upon his giving security for the payment of the legal interest If defects are existing before the renunciation are occasioned by
on their appraised value. (495) the ordinary use of the thing, the usufructuary may exempt
himself from making the repairs by returning to the owner the
It is only by way of exception that caucion juratoria is allowed, fruits received during the time that the defects took place.
and only under the special circumstances mentioned in this
article, upon petition of the usufructuary, and according to judicial Art. 593. Extraordinary repairs shall be at the expense of the
order. owner. The usufructuary is obliged to notify the owner when
*usufructuary who holds property under CJ can neither alienate the need for such repairs is urgent. (501)
his right nor lease the property, for that would mean that he does
not need the dwelling or the implements and furniture. Art. 594. If the owner should make the extraordinary
repairs, he shall have a right to demand of the usufructuary
Art. 588. After the security has been given by the the legal interest on the amount expended for the time that
usufructuary, he shall have a right to all the proceeds and the usufruct lasts.
benefits from the day on which, in accordance with the title Should he not make them when they are indispensable for
constituting the usufruct, he should have commenced to the preservation of the thing, the usufructuary may make
receive them. (496) them; but he shall have a right to demand of the owner, at the
termination of the usufruct, the increase in value which the
Upon giving the security, the usufructuary will be entitled to all immovable may have acquired by reason of the
the benefits accruing since the time when he should have begun repairs. (502a)
to receive them [thus retroactive].
DEFECTS OF DETERIORATIONS REQUIRING EXTRAORDINARY
Art. 589. The usufructuary shall take care of the things given REPAIRS ARE OF TWO KINDS
in usufruct as a good father of a family. (497) 1. Caused by exceptional circumstances, whether or not they
are necessary for the preservation of the thing
It is not necessary for the naked owner to wait for the termination 2. Those caused by the natural use of the thing, but are
of the usufruct before bringing an action to recover the proper necessary for its preservation.
indemnity.
Expenses for extraordinary repairs are borne by the owner but
Art. 590. A usufructuary who alienates or leases his right of the usufructuary cannot compel him to make such repairs.
usufruct shall answer for any damage which the things in If need for repairs is urgent [required for preservation] -
usufruct may suffer through the fault or negligence of the usufructuary is required to give notice thereof.
person who substitutes him. (498) If not urgent – there is no obligation to give notice.
Whether notice was given or not, the owner may make the
Art. 591. If the usufruct be constituted on a flock or herd of repairs, and collect from the usufructuary the legal interest on the
livestock, the usufructuary shall be obliged to replace with amount invested, as long as usufruct lasts.
the young thereof the animals that die each year from
natural causes, or are lost due to the rapacity of beasts of If owner does not make them, the usufructuary may make them,
prey. but only when they are necessary for preservation, and he shall
If the animals on which the usufruct is constituted should all be entitled to indemnity.
perish, without the fault of the usufructuary, on account of
some contagious disease or any other uncommon event, the If owner pays for repairs, the usufructuary should pay legal
usufructuary shall fulfill his obligation by delivering to the interest on the amount invested, until the usufruct expires.
owner the remains which may have been saved from the
misfortune. Usufructuary who has made the extraordinary repairs necessary
Should the herd or flock perish in part, also by accident and for preservation, is entitled to recover from the owner the
without the fault of the usufructuary, the usufruct shall increase in value which the tenement acquired by reason of such
continue on the part saved. works.
Should the usufruct be on sterile animals, it shall be
considered, with respect to its effects, as though constituted Art. 595. The owner may construct any works and make any
on fungible things. (499a) improvements of which the immovable in usufruct is
susceptible, or make new plantings thereon if it be rural,
Art. 592. The usufructuary is obliged to make the ordinary provided that such acts do not cause a diminution in the
repairs needed by the thing given in usufruct. value of the usufruct or prejudice the right of the
By ordinary repairs are understood such as are required by usufructuary. (503)
the wear and tear due to the natural use of the thing and are
indispensable for its preservation. Should the usufructuary Any advantage or increase in the use or enjoyment of the thing
fail to make them after demand by the owner, the latter may due to the improvements or plantings introduced by the owner
make them at the expense of the usufructuary. (500) will inure to the benefit of the usufructuary [no interest due to the
owner because he voluntarily made them].
Requisites for ordinary repair
1. That the deteriorations or defects arise from the natural *Rabuya from here on
use of the thing Art. 596. The payment of annual charges and taxes and of
2. The repairs are necessary for the preservation of the thing. those considered as a lien on the fruits, shall be at the
*deteriorations caused by time or age and the expense of the usufructuary for all the time that the usufruct
destruction/consumption of the thing by use do not fall within the lasts. (504)
concept of ordinary repairs.
*not obliged to pay for repairs prior to usufruct; if defects already Art. 597. The taxes which, during the usufruct, may be
present before usufruct, he is not obliged to make repairs imposed directly on the capital, shall be at the expense of the
owner.

17 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

If the latter has paid them, the usufructuary shall pay him (4) By renunciation of the usufructuary;
the proper interest on the sums which may have been paid in (5) By the total loss of the thing in usufruct;
that character; and, if the said sums have been advanced by (6) By the termination of the right of the person constituting
the usufructuary, he shall recover the amount thereof at the the usufruct;
termination of the usufruct. (505) (7) By prescription. (513a)

Art. 598. If the usufruct be constituted on the whole of a Art. 604. If the thing given in usufruct should be lost only in
patrimony, and if at the time of its constitution the owner part, the right shall continue on the remaining part. (514)
has debts, the provisions of Articles 758 and 759 relating to
donations shall be applied, both with respect to the Art. 605. Usufruct cannot be constituted in favor of a town,
maintenance of the usufruct and to the obligation of the corporation, or association for more than fifty years. If it has
usufructuary to pay such debts. been constituted, and before the expiration of such period
The same rule shall be applied in case the owner is obliged, at the town is abandoned, or the corporation or association is
the time the usufruct is constituted, to make periodical dissolved, the usufruct shall be extinguished by reason
payments, even if there should be no known capital. (506) thereof. (515a)

Art. 599. The usufructuary may claim any matured credits Art. 606. A usufruct granted for the time that may elapse
which form a part of the usufruct if he has given or gives the before a third person attains a certain age, shall subsist for
proper security. If he has been excused from giving security the number of years specified, even if the third person
or has been able to give it, or if that given is not sufficient, he should die before the period expires, unless such usufruct
shall need the authorization of the owner, or of the court in has been expressly granted only in consideration of the
default thereof, to collect such credits. existence of such person. (516)
The usufructuary who has given security may use the capital
he has collected in any manner he may deem proper. The Art. 607. If the usufruct is constituted on immovable
usufructuary who has not given security shall invest the said property of which a building forms part, and the latter
capital at interest upon agreement with the owner; in default should be destroyed in any manner whatsoever, the
of such agreement, with judicial authorization; and, in every usufructuary shall have a right to make use of the land and
case, with security sufficient to preserve the integrity of the the materials.
capital in usufruct. (507) The same rule shall be applied if the usufruct is constituted
on a building only and the same should be destroyed. But in
Art. 600. The usufructuary of a mortgaged immovable shall such a case, if the owner should wish to construct another
not be obliged to pay the debt for the security of which the building, he shall have a right to occupy the land and to make
mortgage was constituted. use of the materials, being obliged to pay to the usufructuary,
Should the immovable be attached or sold judicially for the during the continuance of the usufruct, the interest upon the
payment of the debt, the owner shall be liable to the sum equivalent to the value of the land and of the
usufructuary for whatever the latter may lose by reason materials. (517)
thereof. (509)
Art. 608. If the usufructuary shares with the owner the
Art. 601. The usufructuary shall be obliged to notify the insurance of the tenement given in usufruct, the former
owner of any act of a third person, of which he may have shall, in case of loss, continue in the enjoyment of the new
knowledge, that may be prejudicial to the rights of building, should one be constructed, or shall receive the
ownership, and he shall be liable should he not do so, for interest on the insurance indemnity if the owner does not
damages, as if they had been caused through his own wish to rebuild.
fault. (511) Should the usufructuary have refused to contribute to the
insurance, the owner insuring the tenement alone, the latter
Art. 602. The expenses, costs and liabilities in suits brought shall receive the full amount of the insurance indemnity in
with regard to the usufruct shall be borne by the case of loss, saving always the right granted to the
usufructuary. (512) usufructuary in the preceding article. (518a)

Payment of Annual Charges and Taxes Art. 609. Should the thing in usufruct be expropriated for
- Shall be borne by the usufructuary for all the time the public use, the owner shall be obliged either to replace it with
usufruct lasts. another thing of the same value and of similar conditions, or
- Taxes imposed directly on the capital shall be borne by to pay the usufructuary the legal interest on the amount of
the owner [usufructuary is obliged to pay interest on the the indemnity for the whole period of the usufruct. If the
sums which may have been paid in that character]. owner chooses the latter alternative, he shall give security
Land taxes – directly burdens the capital and should be paid by for the payment of the interest. (519)
the owner.
Art. 610. A usufruct is not extinguished by bad use of the
Usufructuary is obliged to notify the owner of any act of a 3rd thing in usufruct; but if the abuse should cause considerable
person w/c may be prejudicial to the “rights of ownership.” injury to the owner, the latter may demand that the thing be
*otherwise he shall be liable for damages as if he himself caused delivered to him, binding himself to pay annually to the
the same. usufructuary the net proceeds of the same, after deducting
*usufructuary is not obliged to notify the owner when acts of the the expenses and the compensation which may be allowed
3rd person does not affect ownership but only his rights. him for its administration. (520)

Art. 603. Usufruct is extinguished: Art. 611. A usufruct constituted in favor of several persons
(1) By the death of the usufructuary, unless a contrary living at the time of its constitution shall not be extinguished
intention clearly appears; until death of the last survivor. (521)
(2) By the expiration of the period for which it was
constituted, or by the fulfillment of any resolutory condition Art. 612. Upon the termination of the usufruct, the thing in
provided in the title creating the usufruct; usufruct shall be delivered to the owner, without prejudice to
(3) By merger of the usufruct and ownership in the same the right of retention pertaining to the usufructuary or his
person; heirs for taxes and extraordinary expenses which should be

18 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

reimbursed. After the delivery has been made, the security or subsequent rents of the property concerned until the amount paid
mortgage shall be cancelled. (522a) by him and the expenses of collection are fully satisfied, after
which the usufructuary shall again collect the rents. There is
CAUSES FOR EXTINGUISHMENT therefore no dispute as to the title to or the respective interests of
1. Death of usufructuary the parties in the property in question. The naked title to the
a. unless contrary intention clearly appears property is to admittedly in the respondent Juan Grey, but the
b. in case of multiple usufruct [only upon death of right to all the rents thereof, with the obligation to pay the taxes
last surviving usufructuary] and insurance premiums and make the necessary repairs, is, also
2. Expiration of the period for which it was admittedly, vested in the usufructuary, the petitioner Josefa
constituted/fulfillment of any Resolutory condition provided Fabie, during her lifetime. The only question between the plaintiff
in the title creating usufruct and the intervenor is: Who has the right to manage or administer
3. Merger of the usufruct and ownership in the same person the property — to select the tenant and to fix the amount of the
4. Renunciation of the usufruct rent? Whoever has that right has the right to the control and
5. Total loss of the thing in usufruct possession of the property in question, regardless of the title
When it perishes, goes out of commerce, or thereto. Therefore, the action is purely possessory and not one in
disappears in such a manner that its existence is any way involving the title to the property. Indeed, the averments
unknown or it cannot be recovered. and the prayer of the complaint filed in the municipal court so
6. Termination of the right of person constituting the usufruct indicate, and as a matter of fact the defendant Ngo Soo does not
7. By prescription pretend to be the owner of the property, but on the contrary
admits to be a mere tenant thereof. We have repeatedly held that
Usufruct is limited to 50 years if IFO a corporation, town, or in determining whether an action of this kind is within the original
association. jurisdiction of the municipal court or of the Court of First Instance,
Death of the naked owner does not extinguish the usufruct unless the averments of the complaint and the character of the relief
the contrary is stipulated. sought are primarily to be consulted; that the defendant in such
an action cannot defeat the jurisdiction of the justice of the peace
Upon termination or municipal court by setting up title in himself; and that the
Usufructuary is obliged to return the property to the naked owner factor which defeats the jurisdiction of said court is the necessity
unless he is entitled to exercise right of retention: to adjudicate the question of title. (Mediranvs. Villanueva, 37
1. Payment of sums advanced by the usufructuary for taxes Phil., 752, 759; Medel vs. Militante, 41 Phil., 526, 529;
directly imposed on principal. Sevilla vs. Tolentino, 51 Phil., 333; Supia and
2. Increase in value w/c the immovable property acquired by Batioco vs. Quintero and Ayala, 59 Phil., 312; Lizo vs. Carandang,
reason of the extraordinary repairs paid by for by the G.R. No. 47833, 2 Off. Gaz., 302; Aguilarvs. Cabrera and
usufructuary. Flameño, G.R. No. 49129.)

RAMIREZ V VDA. DE RAMIREZ MORALIDAD V SPS. PERNES

The appellants claim that the usufruct over real properties of the Usufruct, in essence, is nothing else but simply allowing one to
estate in favor of Wanda is void because it violates the enjoy another’s property.[9] It is also defined as the right to enjoy
constitutional prohibition against the acquisition of lands by the property of another temporarily, including both the jus
aliens. utendi and the jus fruendi,[10] with the owner retaining the jus
The 1935 Constitution which is controlling provides as follows: disponendi or the power to alienate the same.[11]
SEC. 5. Save in cases of hereditary succession, no private It is undisputed that petitioner, in a document dated July 21,
agricultural land shall be transferred or assigned except to 1986, supra, made known her intention to give respondents and
individuals, corporations, or associations qualified to acquire or her other kins the right to use and to enjoy the fruits of her
hold lands of the public domain in the Philippines. (Art. XIII.) property. There can also be no quibbling about the respondents
The court a quo upheld the validity of the usufruct given to being given the right “to build their own house” on the property
Wanda on the ground that the Constitution covers not only and to stay thereat “as long as they like.” Paragraph #5 of the
succession by operation of law but also testamentary succession. same document earmarks “proceeds or income derived from the
We are of the opinion that the Constitutional provision which aforementioned properties” for the petitioner’s “nearest kins who
enables aliens to acquire private lands does not extend to have less in life in greater percentage and lesser percentage to
testamentary succession for otherwise the prohibition will be for those who are better of (sic) in standing.” The established facts
naught and meaningless. Any alien would be able to circumvent undoubtedly gave respondents not only the right to use the
the prohibition by paying money to a Philippine landowner in property but also granted them, among the petitioner’s other
exchange for a devise of a piece of land. kins, the right to enjoy the fruits thereof. We have no
This opinion notwithstanding, We uphold the usufruct in favor of quarrel, therefore, with the CA’s
Wanda because a usufruct, albeit a real right, does not vest title ruling that usufruct was constituted between petitioner and
to the land in the usufructuary and it is the vesting of title to land respondents. It is thus pointless to discuss why there was no
in favor of aliens which is proscribed by the Constitution. lease contract between the parties.
However, determinative of the outcome of the ejectment case is
FABIE V CA the resolution of the next issue, i.e., whether the existing usufruct
may be deemed to have been extinguished or terminated. If the
It is admitted by the parties that the petitioner Josefa Fabie is the question is resolved in the affirmative, then the respondents’ right
usufructuary of the income of the property in question and that to possession, proceeding as it did from their right of
the respondent Juan Grey is the owner thereof. It is likewise usufruct, likewise ceased. In that case, petitioner’s action for
admitted that by virtue of a final judgment entered in civil case ejectment in the unlawful detainer case could proceed and should
No. 1659 of the Court of First Instance of Manila between the prosper.
usufructuary and the owner, the former has the right to collect all
the rents of said property for herself with the obligation on her XXX XXX XXX
part to pay all the real estate taxes, special assessments, and
insurance premiums, and make all necessary repairs thereon, and We disagree with the CA’s conclusion of law on the matter. The
in case default on her part the owner shall have the right to do all term or period of the usufruct originally specified provides only
those things, in which event he shall be entitled to collect all 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
19 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II
PROPERTY
Pre-final Reviewer

or instances whereby the usufruct shall be considered terminated reimbursement. If the rule on reimbursement or indemnity were
or extinguished. For sure, the Civil Code enumerates such other otherwise, then the usufructuary might, as an author pointed out,
modes of extinguishment: improve the owner out of his property.[15] The respondents may,
however, remove or destroy the improvements they may have
XXX XXX XXX introduced thereon without damaging the petitioner’s property.
Out of the generosity of her heart, the petitioner has allowed the
The document executed by the petitioner dated July 21, respondent spouses to use and enjoy the fruits of her property for
1986 constitutes the title creating, and sets forth the conditions quite a long period of time. They opted, however, to repay a
of, the usufruct. Paragraph #3 thereof states “[T]hat anyone of noble gesture with unkindness. At the end of the day, therefore,
my kins may enjoy the privilege to stay therein and may avail they really cannot begrudge their aunt for putting an end to their
the use thereof. Provided, however, that the same is not right of usufruct. The disposition herein arrived is not only legal
inimical to the purpose thereof” (Emphasis supplied). What and called for by the law and facts of the case. It is also right.
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 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.
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:

XXX XXX XXX

Given the foregoing perspective, respondents will have to be


ordered to vacate the premises without any right of
20 | P a g e
Property of RJ Martinez
II – LLB, University of San Carlos – College of Law Cases based on PROPERTY Syllabus for AY2010-2011 & Comments on Tolentino, NCC Book II